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Home Loan - Tips you need to consider
With the economy 'shining' and salaries
heading northwards, individuals can actually find their dream
of a big house in a posh locality come true.
Today's youth are hard working and career driven and are
not ready to compromise on the quality of their dream house
for a few bucks. There are a multitude of home loan banks
in India to choose from. The home loan industry has never
looked more lucrative with real estate experiencing a boom,
prices are heading upwards. Housing
finance companies (HFCs) are providing platter full of
advantages to woo the borrower with value added services and
flexible products.
To find cheap home loans in
India, there is an array of possibilities. Individuals
can borrow from bank as home loans. Various housing finance
companies (HFC) provide personal loans. Another option is
loan against property (LAP) - a loan given against the mortgage
of property.
Before taking a loan, there are some home
loan tips which you must consider:
Five steps in choosing the right loan:
The current housing loan market requires proper research before
opting for a loan. One should not get carried away by tricky
advertisements. Rather than banging head with terms like special
interest rates for fixed tenure, hidden terms and conditions
etc its better to opt for the bank that offers the lowest
EMI (equated monthly installments).
1. Gather data on interest rates
It is a wise proposition to get interest rate information
from more than one source and compare the offers. A long term
loan will mean lower EMI but probably a higher interest rate
and result in paying more for the house.
2. Enquire fees
The processing fees, administration charges and the quantum
of loan should be discussed properly. It is better to have
a written statement of all fees connected to the loan from
the lending bank itself.
3. Pre-approval letter
Sometimes banks issues a pre-approval letter agreeing to finance
a certain amount. This gives a significant weight and sellers
deal seriously. One can expect a modest price range and negotiate
a better deal. This is more important if one is taking bank
loans for commercial properties.
4. Negotiate loan
Most loaners will bring down their charges for customers with
a dependable reference, so do not be shy about bargaining.
A bargain deal will easily fetch a home loan at around 0.25-0.5%
lower than official rates.
5. Avoid greedy lending
Do not deal with person who asks you to include fictitious
data on your home loan application to get quick approval.
Also do not get pressured into borrowing additional finance
than needed.
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