A house is not merely a necessity anymore, it has become one of the best sources of investment. With hike in property prices, it is a great option to invest in a house. Buying a house also comes with stability and security. When you are living on rent, it is a constant hunt- with dates of tenure expiring every second year, your life turns into that of a gradually moving nomad. With more and more schemes in the market, that are consumer friendly; buying a house is now literally available at the ease of a click. You can now opt for a home loan finance and simply just convert the rent that you are paying towards EMI; so that you can have another feather added to your financial cap.
Here are a few factors to keep in mind while procuring a home loan. With this checklist in mind, you will have no difficulty choosing the best lender for yourself:
- The nature of Rate
It is vital to decide whether your home loan interest rate is fixed or floating. It is advised to opt for a bank that comes with floating rate. In this way, when the market is down- then you have the flexibility of choosing the best interest rate and do not have to pay extra money on the principal amount.
- Margin in the case of A floating Rate
The second criterion to consider for a floating rate is whether the margin is fixed or variable. This will largely impact the interest rate that you need to pay and the best financial advisors would definitely offer you the best variable margins. This is one of the most underestimated factors that a potential buyer ignores while applying for home loan finance.
- Estimate of Fees
A home loan does not only come with the condition of interest rates. It also has a lot of camouflaged prices that need to be considered. For instance, you need to keep an eye out for late payment fines, loan origination fees, documentation charges, processing fee and other hidden charges. Opt for a lender that gives you the right break up of fees and a proper estimate of the money you would need to shell out in order to procure home loan finance.
- Down Payments
With various players in the market, there is a lot of flexibility available for down payments. Each lender has a different rate to offer with an average pre requisite of 20/30 percent. But, some lenders can also go as low as 5 percent. It is always better to weigh your options in order to get the right home loan.
One of the other factors is also your banker’s acceptance of the idea of flexibility. You can switch to different lenders in between the loan tenure, if you get a better rate. Most banks do not like the idea of losing business and hence levy very heavy charges. So, it is better to talk to your source person right since the beginning whether an option like this is available and at what cost does it come if need be.