HOME LOAN MYTHS BUSTED!

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    Securing a roof over one’s head, especially in the leading metros today is a tough nut to crack. Hence, people are increasingly opting for home loans in order to realise their dream. However, there are a series of myths associated with home loans, which can make potential buyers take a step back. Hence, here we unfold before you some common myths and corresponding facts related to home loans to make the borrowing process easy and hassle-free.

MYTH: IF BANKS APPROVE THE LOAN, IT ALSO IMPLIES THAT THE PROPERTY IS DEVOID OF ANY LEGAL AND FINANCIAL DISCREPANCIES

FACT: Santosh Nair, president and CBO, DHFL says, “This is clearly a myth, as it is the responsibility of the borrower to ensure the technical, financial and legal aspects of the property. Although the financial institutions have stringent legal and technical departments, which conduct a thorough background check pertaining to any legal and technical clearances of the property while approving the home loan, it is vital for every borrower to verify the property from their end and check for any discrepancies.”

MYTH:A GOOD CREDIT SCORE DIRECTLY IMPACTS YOUR HOME LOAN STATUS

FACT: Sabyasachi Rath, ED and CEO, Essel Home Loans, says, “A better score is not directly linked to the approval of your home loan. The credit score is derived based on the historical data of a repayment trackrecord of the borrower. It does not reflect the income level of the borrower. There is no co-relation between credit score and income level. The lender looks at multiple factors other than credit score before approving the home loan.” Some key aspects are income levels, stability of income, type of employer, type of business, age of applicant, type of project, reputation of builder, type of property bought, Loan To Value (LTV) and clear, marketable title of property – these play a critical role in the approval of one’s loan.”

MYTH: LOAN FOR A SHORT DURATION IS BETTER THAN A LONGER ONE

FACT: Rath adds, “There is no right or wrong tenure for a home loan borrower and the same is dependent on personal goals. A few could opt for a short tenure keeping in mind one’s annual bonus or incentive so that he becomes liabilityfree as early as possible while the rest could opt for a longer tenure after taking into consideration factors such as their children’s graduation or a key milestone.”

MYTH: SHIFTING A HOME LOAN WOULD IMPACT THE CIBIL SCORE

FACT: Nair suggests that shifting a home loan has no impact on the credit score since the outstanding amount remains the same. “It is in fact the non-payment of the dues or EMIs that impacts the credit score. In case of any concerns with your current lender, it is advisable to get clarity, so that you can avail the best deal without shifting.”

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