When purchasing a home, the most important step is identifying the perfect apartment, house or villa. Second, to that, is picking the right home loan. This is because while a home ensures that you have a roof above your head, good home loan offers to ensure that you have a firm foundation, financially speaking.
Today, a home loan is part-and-parcel of the home buying process and is a long-term commitment, something that you’d have to attend to for a decade or two. Hence, while you scout real estate options in your preferred locality, it’s advised that you also shortlist lenders that will enable you to make your dream purchase.
Here are 5 steps you can follow to zero-in on the right home loan lender-
Inquire about the maximum loan amount offered
While scouting for home loan offers, watch out for the maximum loan amount, as this determines which properties you can consider purchasing. With several lenders, you can purchase even high-end properties with ease, as you can get a Home Loan to the tune of Rs.5 crore on simple terms.
Be particular about the home loan interest rate attached
The EMIs that you may depend largely upon the home loan interest rates charged by your preferred lender. It’s important to note that even a 0.25%–0.5% variation in home loan offers can make a huge difference to your total outgo. This is especially because home loans carry a long tenor. Further, you should weigh the pros and cons of fixed and floating rate loans, to benefit either from a fixed EMI schedule or the prospect of a reduced rate in the future.
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Look for a flexible repayment tenor
When taking a home loan, repayment is something you should plan for well in advance. To tailor the same to your financial profile it’s best that you shortlist home loan offers that provide a flexible repayment tenor. With a lengthy tenure at your disposal, you can strike a balance between low EMIs and minimal interest outgo. In fact, you can use an EMI calculator to determine the tenor that’s best for you.
Examine the part-prepayment and foreclosure terms
When you’re in possession of excess funds, making part-prepayments towards the principal helps you reduce the total interest payable, making the home loan more affordable. Typically, you can enjoy zero charges on prepayments made towards floating-rate home loans, but part-prepayments and foreclosures made towards fixed-rate loans attract a fee. It’s important to consider this before zeroing in on a lender so that it can determine the net benefit in the store.
Research the eligibility criteria and documentation required
Having to wait to buy your dream house because of tedious home loan processes can be unpleasant and so, it’s best that you pick lenders that have home loan offers basis which you can qualify easily. Minimal criteria for home loan eligibility and documentation requirements ensure that you get a home loan quickly, at favorable home loan rates.