Property :
Tips to choose the right tenure
               A home loan is a huge financial commitment for most borrowers that and it is bound to affect them for decades.
     It is very important for new borrowers to understand what they are getting into. Before choosing an option, you must make clear decisions on elements like repayment capacity, type of loan and rates. Choosing the right tenure is one another factor that a prospective borrower must decide before approaching a lender.
               Banks normally offer loans only to an extent where the borrower’s monthly repayments are less than 35-50 percent of their gross monthly salary. The maximum loan tenure offers by the lenders will be for a repayment time period of 20 years. Here is some tips to choose the right tenure.
        1. Very huge loans can make repayment an unmanageable burden.
        2. In an ideal situation, it is better to opt for a short tenure and pay off the commitment towards the home loan as soon as possible.
        3. Remember, when the tenure is shorter, the burden of EMI becomes greater.
        4. In case your loan eligibility is less, it makes sense to opt for a very long tenure loan. Otherwise, you should remember that longer the tenure, there is more outflow from your pocket towards interest.
        5. Short tenure home loans are for people who can afford high monthly repayments towards the loan.
        6. If you want to be free of the burden of the home loan, go for a short tenure one.
        7. For others who cannot afford to set aside big amounts every month towards a home loan, take a long tenure with a no prepayment penalty option. This will ensure that you are not penalized if you want to prepay the loan.
        8. The repayment capacity of a borrower is based on income, age, qualification, experience, employer, Nature of business – if self employed, tenure, tax history, assets owned, alternative or additional sources of income, other loan obligations and investments.
        9. The final loan amount sanctioned by the bank is as per the Fixed Obligation to Income Ratio (FOIR), Loan To Value or Cost Ratio (LTV/LCR) and Installment to Income Ratio (IIR) norms as laid down by the bank.
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