When it comes to purchasing a home of your own, you need to consider a lot of things, financially, to make the right decision. Home Loans are the most important part about buying a home. Apartments can turn out to be very heavy in your pocket in the current real estate market. And to afford these expensive apartments, taking financial help from the banks will turn out to be a wise decision in the long run. It is important you choose the right Housing Loan that offers you the best interest rates on Home Loan. You can go through a huge financial burden if you chose the wrong House Loan. Hence it is important that you do a thorough research before finalizing on a loan.
- Interest rates:
The Interest rates differ from bank to bank. Some banks charge high-interest rates whereas some charge low. The credit scores, loan amount and loan tenure are the things which interest rate is depended upon. The Interest rates can range from 9.40% to 12% per year. Even a small difference in the interest rate can have a major effect on your Home Loan. Therefore, opting for a lender who offers less Home Loan interest rate is the best option. Keeping in mind about the banks which also follow MCLR rule for interest rates, this rate setting instrument is preferable to pass on the reduction in the interest rates to you than the RPLR system followed by NBFCs.
- Credit history:
Having a low credit score shows a poor credit history. If you have a low credit score, you may have to face problems for the approval of your Home Loan application or you may also be required to pay a high rate of interest. If you are having a good credit score history the situation will be totally reversed i.e. you have to pay less EMI and the process of loan approval will be quick. Maintaining a good credit score is extremely important.
- Loan to value (LTV) percentage:
Loan to Value (LTV) is a part of the property value that is financed by the bank through Home Loans in future. The down payment for the property comes from your pocket. A bank can only finance 90% of your property in a Home Loan. For the apartments priced at the range INR 30 lakh -70 lakh and above INR 75 lakh, LTV ratio can go up to 75% to 80%.
- Loan tenure:
Up to 30 years of the loan tenure is presented by NBFCs. Self-employed people are offered lower tenure by some banks; some banks still have 20 years for all customers. You need to choose the bank offering the lowest tenure to reduce the EMIs on your Home Loan.
- Loan processing time and fees:
The Home Loan processing time differs for every bank. Some approve your Home Loan application fast whereas some have a slow process. Look out for banks that have quicker loan processing system if in case there is an immediate requirement for a loan. Also, opt for the banks who charges less or no processing fees. Lenders charge processing fees to incur the various processing charges cost on your loan. It is necessary to do a thorough research before choosing one lender or financial institute.