As important it is to buy a dream home after much research done carefully; It is equally important to take a home loan carefully too. If you have finalised your dream home and are looking to finalise the bank for taking the housing loan, this article is for you.
Things to Know to Select Best Home Loan
Home Loan Eligibility
Knowing your maximum home loan amount alongside your home loan tenure is crucial to decide on a lender; check your lender’s page for the documents required for the home loan, eligibility criteria and the maximum loan you can avail of. Loan amount eligibility varies from lender to lender. It is decided on several factors like monthly income, credit score, property value etc. Enter your income in the home loan eligibility calculator to determine the approximate loan amount you are eligible for to decide if you need to proceed or not.
Rate of Interest
Home loan interest rates can make a massive difference in your monthly EMI. Research the market for lower home loan interest rates. Zero in on the lenders who offer the lowest interest rates to compare other charges too. You will also have to decide if the loan will be fixed or floating rate of interest. Current home loan interest rates are as low as 6.65%, and women borrowers are offered a 0.5% discount. Hence it is the best time to take a housing loan.
Processing Charges
Most lenders avail processing charges. These charges vary from 0.25 to 1%, depending on your lending institutions. Apart from this, you will need to consider late penalty charges too. Go for the lender who offers the best rates on these charges too.
Prepayment Charges
The RBI has denied prepayment penalties on floating-rate loans. However, it is permitted in fixed-rate home loans. Choosing a lender with low Prepayment charges is the best for you to eradicate future expenses on prepaying loans when your finances improve. You can utilise cash surplus to prepay your loan to bring down both your tenure and interest rates.
Pre-approved Loan Quote
Get yourself a pre-approved home loan while you are already searching for a property. Pre-approved home loans are quicker and give you better clarity. You can understand your budget and confidently buy the home without having to worry about eligibility or approval.
Foreclosure Norms
You can foreclose your home loan anytime when your finances improve. The sooner you repay the loan, the more you save on interest rates. The banks charge foreclosure penalties for prepaying loans. Hence it is necessary to check the best rates on these too.
Carefully considering the above options will help you zero down on the best home loan interest rates in hand. Go for an affordable loan that you can pay comfortably without defaulting, calculate your monthly EMI outgo to understand your affordability and choose the optimal interest rate and tenure.
Keeping the above points in mind will help you in making an informed decision. Apply for a home loan online today to avail yourself of the best housing loan deals.
