4 Things To Remember While Going For A Home Loan

  Author: Sanjay Sharma

Buying a home is one of the biggest financial goals of any individual. Being a big ticket item, it is mostly not possible for people to buy a home out of their current savings. This makes it important for a person to get a home loan. Given its importance, especially the repayment that takes places over 15-20 years or more, through payment of equated monthly instalments (EMIs), it is important to take a home loan with care. In particular, there are four things to remember when going for a home loan.

Contact banks and financial institutions Ideally, approach those financial institutions with which you have existing relationships. But ensure that you broaden your search. Apart from banks, consider non-banking finance companies (NBFCs) that may offer a better home loan rate.

Seek best home loan rates from banks and financial institutions A little difference in your home loan interest rate may mean a substantial difference in the total interest you will be paying in the course of long home loan tenure of 15-25 years. This makes getting hold of the best home loan interest rates very important.

You can find these home loan rates from the websites, tele-services or branches of banks and financial institutions providing home finance. If you have a good credit score and established relationships with banks, you have a better chance of obtaining a home loan at a lower interest rate. Of course, you need to be sure whether you want a fixed or a floating interest rate loan. Once you have done that you need to compare various home loan offers. Doing due diligence will help you zero down on the bank or financial institution offering the best rates.

Consider options online Visit sites that provide home loan deals online. You can take the help of online calculators and use information from popular aggregator websites providing home loan deals. Online deals could come with lower interest rates, faster approvals and quicker disbursals. This can help you zero down much faster on the best loan among various home loan providers.

Read up and understand all terms and conditions You need to be very sure of the terms and conditions of the home loan. Read the fine print and find out all details regarding the loan. Sometimes a zero processing fee might mean a higher rate of interest. Lenders would mostly charge a prepayment penalty on fixed rate loans. On the other hand, a lower EMI may mean longer home loan tenure and effectively paying more interest.

A home loan is a long term commitment. Remembering some of the important things that we have just pointed out will help you take an informed decision.