While opting for a home loan, a few queries might appear straightforward, but it is good, to begin with, the basics and then go deep into the details. Here are some of the crucial things you must consider when selecting a Home loan in Kerala, a Home Loan in Pune or any other city.
Can you rely on or thoroughly trust your lender?
As you would carefully select your pal or friends, by understanding their habits, behaviour or family background, the lenders’ reputation is also important. As it has a long-term association, do ensure to look for the details like how long they have been in the business, whether are they popularly known for their professional or ethical behaviour and what is the typical service they endow. Answers to such questions can assist you to zero in on the best loan provider easily.
What is home loan eligibility?
A rule of thumb to note is that customary financial institutions would come with stringent eligibility parameters while HFCs (housing finance companies) or NBFCs (non-banking finance companies) are slightly more flexible. Financial institutions will just look out at your proof of income and other parameters while others may accumulate detailed info regarding your living conditions, upcoming expenditures, side income, etc. to understand your capacity to repay. A thorough evaluation is most likely to favour you with a higher loan eligibility criterion and a higher LTV (loan to value) ratio. You can simply browse through the internet and check out your loan eligibility at zero cost. Also, they endow you with a good idea before you formally place an application.
What is the home loan rate of interest?
While a lesser rate of interest is preferred, you must know your real interest outflow towards the end of your repayment tenure. Also, ensure to check whether the provided interest rate is fixed or floating. Generally, a diminishing floating interest rate would work for you.
Can you simply make the prepayment?
The actual truth is – the higher the repayment tenure, the higher the interest you require paying. No matter what the rate of interest you are offered, if you end up making payments for a long time period, chances are that the interest outflow would be high. The smartest way for you to save is to close all your loans early, either via small but periodic repayments or with lumpsum amounts in the form of prepayment. Make sure that you get the option to make home loan prepayment when availing a home loan.
Is the home loan deal transparent about the fee structure?
You must have this somewhere in writing – all the distinct kinds of charges and fees that may be charged across repayment tenures like technical and legal charges, processing charges, mortgage fees, foreclosure fees, and others. You must ask about them before you go for a loan to get the highest level of clarity.
Are you eyeing digital access?
Most financial institutions are moving towards the digital podium for the customer’s convenience. You must be able to apply for a home loan smoothly and then review the loan using the phone app. The functions like paying your loan EMIs, fetching an account statement or raising an important query using the app are a must-have.
Is the procedure hassle-free in nature?
Documentation and formalities involved in loan procedure are standard across all lenders in this industry. However, the sanction time can usually differ by month. Generally, the so-called “easy documentation process” may not be very simple for a few. Opt for a lender who agrees to disburse your loan quickly. Ask for all the terms and conditions and requirements in one shot and then begin building your paperwork or go for the organisation whom you trust the most.
Can you get a single contact point?
Your financial institution must be able to meet all your requirements through a single contact point so that you do not require wasting time running around.
Are your documents that are mortgaged safe?
The documents that you mortgage act as a security for the lender. Ask your lender about the precautions it follows to keep your original home loan documents safe so that the documentation does not become a massive headache for you after you are done repaying your loan repayment tenure.
Are you availing the home loan insurance?
Safeguard your family members from unprecedented scenarios. Insurance to cover your home loan is one of the secure options you must opt for so that even during your absence the home loan does not become a burden for your family members.
Check does the lender adopts a digitally savvy route.
Technology is here to stay and grow. So, this is an important key point that you must ensure to check. Always check how savvy the bank is with respect to the online payment of the EMIs (equated monthly instalments), online processing of the loan and others. Such factors keep the loan procedure transparent, save a lot of time across repayment tenure and endow you with a digital record of all your home loan payments and transactions.
All in all, selecting your financial institution is a balance between long- and short-term realities. Always concentrate on getting your long-term needs addressed while making sure to lower the rate of interest. This way, you can avail a no-regret home loan to complement the most beautiful feeling of becoming the owner of a dream home.
Does the lender offer long-term services?
A lot can change in over 10 to 30 years. You might want to prepay your loan faster than expected or even may want to switch to another home loan lender. While all of these are possible, you must ensure to go for a good lender who caters smooth processing of all such services.
Have you checked the hidden costs levied by the home loan lenders?
Always ask your shortlisted financial institutions upfront about the possible hidden fees and charges. A few lenders tend to impose unexpected fees post-sanction. Also, a few banks propel you to purchase term insurance via them. This might save you the massive hassle of incurring last-minute expenditures.
