Consider following these tips to avoid loan burden in the long run!
Taking a home loan and fulfilling your dream to buy a house is really one of the financially brave moves. Hence most of the aspirant spends their extensive time in home loans comparison to get the right loan options. The reason is obvious, the loan borrower has to pay back total loan amount until the tenure ends, which could be 25-30 years at maximum. This means whichever interest rates or EMI value you choose you to have to pay for years to come while managing other monthly expenses.
The task of home loans comparison could be stress-inducing and bound to make you confused with all the availed options. But if you clear your mind, the task would be easy to follow. You can follow below tips and start hunting for the ideal housing loan product.
Choose the right rate of interest!
There are some cases where borrowers find themselves having a loan burden as they didn’t pay close attention to how crucial home loans comparison is. The interest rates on the most home loan products availed in the market are reasonable but choosing a longer tenure to reduce those rates isn’t wise either. If you keep paying those interest rates for an extended tenure period, you would pay extra on interest amount. Hence the ideal rate of interest along with lesser loan tenure should be estimated and chosen as per your economical eligibility. You can use home loan calculators to compare and find the sweet point of interest rate that suits your economical withstanding.
Finding ideal EMI value:
Eventually, you have to repay the total loan amount in installments aka EMI in the given tenure time. Hence it would be wise to choose an EMI value that timely repay the loan amount and wouldn’t be a burden on monthly on your budget planning. Thankfully, most loan lenders offer plenty of EMI value options on their loan product, so you have plenty of options to choose from. As per the thumb rule, the ideal installment value would be the one that suits your economic stature. Many loan lenders offer home loan EMI calculators that take your overall economic profile into consideration to suggest you the best installment value.
Processing fees and other charges!
It would be unfair to keep all your focus on the rate of interest while you do home loans comparison, as there are other factors to look for. Each housing loan provider charges processing fees for processing the application further once it is approved. These processing fees are to be paid by the loan borrower! Although how much it will depend on one loan lender to another! In most cases, companies keep their processing charges around 1-2% of the loan amount borrowed but you can dig well you could find a loan lender that charges less processing fees. While reviewing the availed housing loan products also keep eye on the other processing charges loan lender charge fees like administration fee, legal fee, notary fee or even franking fee on sale agreement.
The foreclosure norms!
It might seem unfeasible to repay total loan amount before the tenure period gets over but if you consider the increments and the occasional bonuses, might seem possible. Hence while on home loans comparison, you must check out the foreclosure norms set by the loan lender. Most loan lenders charge the foreclosure penalty for paying home loan early but if you choose the floating interest rates on the loan, the loan lender wouldn’t charge any penalty on you.