How do you find the right home loan amidst the availability of multiple options and hundreds of questions crossing your mind? Before you make a choice, you need to understand various aspects of the loan.
While the process of finding the best home loan would differ from individual to individual, some tips can help you find the right one that suits your needs. Read on.
Adequate research is a must
Once you decide to avail a home loan, do thorough market research. Consider various lenders offering home loans and the services they offer. Also, check on the interest rates, maximum tenure and application process. Even if you have a lender with whom you have dealt for years, exploring various options can help you arrive at a choice that better fits your requirements.
Choose an optimal tenure
Your home loan tenure determines your EMI and total cost of borrowings. While a longer tenure can reduce the EMI outgo, it can increase the interest burden and thus, your total repayment amount. On the other hand, a short tenure will help you pay off the loan faster but can hamper your daily expenditure as the EMI amount would be higher.
Know about the interest rates
The home loan interest rate is one of the foremost factors that you should consider while exploring different home loans. Even a slight change in interest rates can significantly alter your cost of borrowing. Therefore, it is necessary to choose a lender that offers the best rates. Know that there are two types of interest rates – fixed and floating. While the floating rate of interest keeps changing throughout the tenure, the fixed rate typically remains constant. Based on the current economic factors, you can do the cost-benefit analysis and choose the one that would be beneficial for you.
Read the fine print
It is imperative to know everything about your loan agreement by reading the documents carefully. Therefore, look for a lender who has the most transparent loan process. You should be well aware of all the charges and hidden provisions the lender plans to levy on you as a borrower. You can consider the lenders based on their processing fee and opt for one that charges the lowest processing fee. Look for eligibility requirements
You can use home loan eligibility calculator to determine your eligibility and accordingly can proceed with the application.
While looking for the right home loan, it would be best to read customer reviews and talk to a few people to know the lender’s reputation. Along with the interest rates, you should also consider the post disbursal service. Acquire adequate knowledge about the lender you are availing the home loan from, and then proceed with your loan application.