Paying Home Loan? This Is What You Should Not Do
Incomparable are the joys of being a house owner. So much so, that most of us, in our eagerness to complete the process as soon as possible, sign the home loan application without giving a patient reading to the various terms and conditions mentioned in the fine print. However, the joys of home ownership come along with the responsibilities of being a borrower. As a responsible borrower, as long as you are in the process of paying your home loan, there are certain things you must avoid doing.
Any default on loan repayment and you might be in long-term trouble. Do keep in mind that if a situation arises due to which your account does not have sufficient amount for a month for the EMI (equated monthly instalments) to get deducted, things will not be all right by paying a penalty. Your credit score will get affected if this happens multiple times.
As a borrower, you get several benefits. There is no worrying about monthly rents; along come tax rebates. In fact, you can avail of another loan if need be; you are eligible for that. However, you must not overlook the fact that burdening yourself with multiple loans might not be a financially prudent idea. While you have a home loan running, try not to borrow for, say, buying an automobile. In case of any unfortunate events, you will be defaulting on two loans than one if you are borrowing from multiple sources.
As you progress in your career, your monthly salary has increased. The EMI amount, which used to look like a burden sometime back, is tiresome no more. It may be so that you have got too comfortable around the home loan burden. You increased monthly salary means you can save more and pre-pay your loan.
What happens across the world has a huge impact on all of us, home buyers included. For instance, banks keep changing their interest rates. If you transfer your loan from one bank to another because the latter has reduced rates, it might substantially bring down your EMI amount.