How to Choose your Home Loan Lender?
Buying a home is dream for everyone but most of us are not able to achieve the dream due to many reasons. The escalating real estate prices have made buying a property a dream for most of us. It may happen that you have been thinking for quite some time to buy a property but your bank balance is not allowing you to do so. If that is the case, you can go ahead and take home loans that you can pay over a period of time and also own your dream home.
The foremost thing to be kept in mind is that one should never finalize a lender on the basis of interest rates. Most of us choose home loan lender on the basis of interest rates, cheapest the best. But actually, there are various other things that should be kept in mind while finalizing home loans.
Check your home loan eligibility with various banks: Various banks have their own methods ad standards for calculating eligibility. You should do some shopping to check which bank is offering you higher loan eligibility. Adding up your spouse income may also be a good option to increase your home loan eligibility.
Fixed or Floating interest rate: A fixed interest rate means that you will have to pay same EMI over a period of time (it may be fixed for entire tenure or it may be reset at fixed interval). Floating interest rates may change at any given point of time, which may result increase or decrease in either your home loan EMI or your tenure.
Processing fees: This fee is charged by the bank for processing the home loan and is not refundable. In case you decide not to take the loan from the bank, then the entire amount you have paid towards processing fees is lost. This generally varies in the range of 0.5 to 1% of the total home loan amount. Also payment of processing fees doesn’t means that your loan is passed. It may happen that you pay the processing fees but still your loan is not sanctioned due to various other reasons. Thus before paying the processing fees, you should bargain on the same and get it confirmed from the bank in writing.
Prepayment fees Prepayment fees come in to picture in case one wants to prepay his home loan from various sources. It may be from his personal savings or if he is planning to switch the loan to a different lender. Few of the banks offer no prepayment charges in case the prepayment is done from own sources. But in case the person is shifting the loan to a different lender then most of the banks ask to pay a fee in the range of 1% to 2% of the outstanding loan amount.
All the charges should be always be taken down in written from the bank and the written document should be preserved in case the bank asks the person to pay up some different amount after sometime.
Once you are satisfied with the above clauses and the interest rate offered by the particular lender, you should go ahead and buy your dream home.
Along with that it is always said that you can get the best home loan deal only after your property is finalized. So before you start with your loan hunting, we would suggest you to finalize the property.