Buying own home is the dream for many people which was difficult to fulfill in the past. However, now the times have changed with the incorporation of a number of Home Loan options. Financial institutes are playing a big role in converting this dream into reality making people happy for a lifetime. However, you can’t depend on a single Home Loan option while seeing just the positive aspects. There are a number of factors to be considered while deciding on the best Home Loan offer in order to meet your financial goals.
Factors Affecting Your Home Loan Options
There are different types of Home Loans that will impact your decision before boiling down to the most appropriate offer for you. However, just considering the following factors, you can easily make an accurate decision.
- EMI – Equated Monthly Instalments
This might seem like an easy way out for purchasing your dream home, but as a matter of fact, it can be hectic to arrange funds every month for loan installment. If you are purchasing a home that is under construction, there are many banks that offer you a moratorium period in which you don’t have to pay any installment. Once, the home is done and ready, your EMI repayment will start, making it easy on your pockets.
However, not every bank offers this facility. Many banks have policies to charge interest with the loan itself. In this situation, you need to keep a track on home loans that can fit your pocket on a monthly basis. You need to make sure that your EMI should not exceed 40% of your total monthly income. HDFC Home Loan is one of the best choices when it comes to affordable housing loan EMIs.
- Credit Appraisal Time Taken
Next are the credit-risk and guidelines that are taken into consideration during the time of sanctioning a Home Loan. This follows the same for each and every bank, but the bank that can provide quick Home Loan approval and disbursal must be your preferred choice. It is possible, that home buyer has limited time to claim and purchase a property. In such condition, it will be extremely helpful if the lender can swiftly process the Home Loan. Hence, consider the turnaround or credit appraisal period of each lender when choosing a Home Loan provider.
- Access to Online Account
The world is moving at a very fast pace towards digitalization, so is the process to apply for different Types of home loan. Now, you don’t just have to depend on traditional brick-and-mortar banks to get a Home Loan. You have a variety of choices to choose from such as online lenders, online lending marketplaces, such as banks/non-banking financial companies/housing finance companies. Also, you will have accurate information regarding the products, services, interest rates, and other charges, EMI calculators and a lot of other facilities. Hence, while deciding on the Home Loan, make sure that your lender is well accommodated with online banking or you can visit MyMoneyMantra to compare and choose from a variety of Home Loan options as per your requirement and features offered.
- Nil Foreclosure Charges, Easy Pre-payments, and Facility to Transfer Home Loan
Being a big-ticket loan, Home Loan is a commitment that will go on for 20-30 years. You will witness a lot of ups and downs in interest rates during such a long tenure. You might want to foreclose your loan before its maturity date or make part payments when you have a surplus, or you might want to transfer your Home Loan to another bank to reduce the interest cost. There are some lenders that do not charge any foreclosure fee. There are some lenders that do not charge any foreclosure fee. Make sure your lender provides all these facilities on easy terms.
- Personalized Home Loan Insurance
The loan insurance covers the risk of loan repayment at the event of the owner’s accidental death or other mishappenings.
A home loan insurance protects helps your dependants in repaying the Home Loan availed by you if you are not there. Hence, if you can afford a slightly higher EMIs (including the insurance premium cost), you must look out for a lender who offers this facility.
- Flexible Home Loan Interest Rate
The floating and fixed interest rates concepts might be a confusing deal for you. Nowadays many lenders offer flexible interest rate option wherein the interest rate remains fixed for the initial few years, and then convert into a floating interest rate. You can TruFixed Home Loan, a type of HDFC Home Loans, to avail such facility. Under TruFixed Home Loan, the interest rate remains fixed for 2-3 years and then converts into adjustable rate automatically.
- No Hidden Costs or Charges
It is essential to have a detailed study about the product being offered to avoid paying any additional cost in the future. You need to ensure that the contract doesn’t contain any clause that can lead to additional payments. Avoid signing on any of the contract papers until you are sure that you will not be paying a penny more than you know. So, be sure that you have searched thoroughly before tying yourself in any contract and cherish the Home Loan of your choice.