We all aspire to own a house of our own although we may not always have enough saving in our bank to make such a big purchase. In most cases we are, therefore, left with only alternative of approaching a home finance company for providing home loan. Choosing an appropriate home loan provider is, therefore, very important for entering into a hassle free home loan deal. The following tips may help you in selecting a good home loan provider who would guide you in smooth finalization of a home loan deal that would suit your needs and expectations.
1. Decide on the category of property before fixing the lender.
Finalise the category of the property for which you would like to be financed by the lender. This is important because there are lenders who finances ready-properties only while there are others who would lend for properties which are under construction also. It is, therefore, imperative that you finalize the category of property you want to buy before selecting your loan provider.
2. Know you loan eligibility status.
Examine your loan eligibility criterion from individual banks, which varies from bank to bank and select the one which would offer maximum amount of loan depending upon your income data and credit history. If you can arrange a co-applicant your combined income will be considered and your eligible loan amount will be increased.
3. Clarifications on Interest Rates.
The interest rates for borrowed capital may be fixed or floating/adjustable. Although the fixed interest rate normally remains unchanged throughout the tenure of the loan, sometimes such rate is adjustable after a certain period of time. This point, therefore, needs clarification beforehand from the prospective lender. On the other hand, if you opt for floating rate loan it needs to be ensured that the prospective lender’s floating rate has a downward trend for the past 2/3 years.
4. Agreement on payment of non-refundable Processing fee.
A non-refundable fee is charged by the bank for processing of loan application although payment of such fee does not guarantee sanction of loan by the bank. A fee for change in interest plan is also charged by the bank. There is, therefore, enough scope to have a negotiated agreement with the prospective lender on the payment of such processing fees.
5. Decide on all the unseen costs.
Although the bank charges several costs which are unseen over an above the interest charges, mostly the interest portion of the costs is taken into consideration by the borrowers while taking the home loan. It is, therefore, prudent to negotiate with the lender all the unseen charges like legal fees, pre-payment charges, valuation fees, processing fees etc before choosing him as your loan provider.
6. Be informed about the lenders for making a choice.
Before deciding on a loan provider you should collect detail information about what each prospective lender can offer to its customers and compare what each of them can provide you of what you are looking for to suit your needs.