Home buying has been much simplified with the advent called home loans. Because of the easy access to home loans, a huge number of people can now afford homes without much financial pressure. While buying a home through bank finance has become very easy, meanwhile choosing the right lender is getting more and more complicated day by day. There is a quite big number of home loan providers and sorting out the best among all can be challenging for any first time home buyer.
A home loan probably is the credit for which the repayment goes on for the longest duration. A typical home loan runs for a time span of 10 to 15 years and sometimes even more than that. Understanding the fact, choosing the right lender becomes a high priority when you plan to buy a home with a home loan.
Today, home loan providers are many in number and most of them are appealing to the potential home loan borrowers. The lenders keep on providing many attractive offers make their presence stronger in the market. Some lenders offer you a zero processing fee while some others may offer EMI holiday for the first few months. Such kind of additional offers indeed makes the right selection of lender further confusing for the potential home buyers. To eliminate such confusion forever, here we have listed a few points that should be checked to find the best lender for your home loan.
Things to Keep in Mind While Choosing Your Lender
Interest Rate
The interest rate is the factor which has the maximum influence on the EMI amount as well as in the cost of borrowing. Nowadays almost all home loans come at a floating interest rate which is linked with MCLR. The housing loan interest rate varies from lender to lender and you need to find the lowest interest rate to make the loan cost down. The interest rate sometime may differ applicant to applicant also with the same lender. One has to check and compare the interest rate of a number of lenders to find the best one.
Loan to Value Ratio
The maximum loan amount one can avail in a home loan depends on the income of the applicant as well as on the value of the property. Most of the times, banks provide a home loan which is equivalent to the 80% of the property value. But all banks are not similar even on this prospect. Some banks may offer you a higher amount of loan and some may give a lower amount on the same property purchase. So this loan to value ratio is the next point to check while choosing a home loan provider.
Online Access
Nowadays most of the loan providers provide you with an online access to the loan account. This online access is an essential feature. With the help of this online account, one can get any information on the loan such as rate of interest, outstanding loan amount, tenure left, next home loan EMI etc at any time. This is a must-have feature and one should opt a lender if they provide this facility.
No Hidden Charges
In several occasions, people are found to be cheated by the lender by the hidden charges. At the time of availing the loan, all the fees and charges are not revealed to the borrower. In the later period, the lender puts up different charges one after another. This is a kind of daylight robbery and one has to be cautious enough in this regard prior to choose any lender.
Easy Pre-Payment Facility & Nil Foreclosure Charges
A home loan tenure can run up to as long as 30 years. One may have opted for the tenure of 30 years while taking the loan to make the financial pressure lower. But along with passing time when you have boosted your cash flow, you may like to pre-pay or part pay your home loan to become free from the debt. In such scenarios, if your bank denies for a pre-payment or part payment it would be a great hit on your financial life. So one has to be assured of the pre-payment and part payment policies of the lender before signing the loan agreement.
The Turnaround Time
The turnaround time or the disbursal time of the loan is another important point to check before you apply for a house loan. Some of the lenders take a quite long span of time in processing the loan which can create much confusion between the home buyer and the builder. Some banks disburse the loan within a week while some others may take a month-long time for the same functioning. It is always advised to be certain about the disbursal time of the loan prior to applying for the same.
Processing Fee
The processing fee also differs from lender to lender. The processing fee for any kind of loan depends on the loan amount. The higher loan amount will attract a higher processing fee. At present, the processing fee of SBI home loan is 0.25% of the loan amount whereas ICICI bank charges a processing fee of 0.50% to 1.00% of the loan quantum. Considering those facts, one must check the processing fee in advance while choosing any lender for their home loan. The additional fees and charges altogether determine the total cost of borrowing so one has to be careful about those fees and charges.
The decision to buy a home is one of the most influential financial steps that a person takes in his life. So home buyers are expected to watch every step they take regarding the home buying. The internet is a not less than a boon in this field. One can extract each and every home loan information online which can prove to be a great help for the home buyers. So take informed information so that you don’t need to repent on any of your decision regarding home buying.
