Smart Tips To Avail The Best Home Loans

When you are in a market for home loans, you need to make smart choices. You cannot rush into decisions. There are several aspects of your professional, personal and financial life that will come into play as you opt for a housing loan. The best home loans in India cannot be selected randomly or by mere luck. It needs a more studied approach for the home loan eligibility process as well.

Finalize a property meticulously

This is the most challenging part of the entire process. Most borrowers want to buy a property based on their personal requirements. However, your financial life plays a vital role as you need to select a property that you can afford to pay EMIs for comfortably. Most housing finance companies select the candidate who can spare about 30% to 40% of their in-hand income as housing loan EMIs without trouble. So, selecting the property that you cannot pay for will be unwise. You will need to consider that the principal amount of the home loan will include 80% to 85% of the property cost, legal charges, processing charges, home loan insurance plan, service taxes and allied fees. Hence, property selection will depend upon the likely principal amount, EMIs you can afford on a monthly basis and your credit score report.

Ensure eligibility criteria

When you apply for a home loan at any housing finance company in India, you must make sure that you meet their basic eligibility criteria in order to receive a decent loan offer. This is much easier nowadays as these details are straightforwardly available online. This is important, because a home loan application rejection becomes a permanent part of your credit history. You can compare the home loan offers online, check their websites for details and visit the branch office to understand all that you need to know. However, you should apply for home loan in a particular housing finance company when you believe that you can meet their criteria and get an acceptable house loan offer.

Watch out for all the possible charges

A lot of people are relieved once they get a decent house loan offer. Hence, most of them do not go through the terms and conditions of the home loan to vet it out. Although, you can’t be certain about the graph of your financialsituation for the next 20 to 30 years, you need to know about the prepayment charges as well as the home loan default fees. You also need to understand the consequences of the financial agreement that you are getting into. So, do not enter into this vital contract blind-sided. The best home loans in India are selected with close attention to detail. Thus, you should read thoroughly before you sign on the dotted line.

The Myths About The Cheapest Housing Loans In India

A lot of people seek cheap home loans in India. Most borrowers want the most affordable and perfect home loans. However, it is not always possible. In some cases, borrowers get trapped into unsuitable housing loans as they fall for the so-called the cheapest home loans in India. So, here are some myths about these cheapest house loans that we will advise you to stay away from to avoid probable financial mistakes.

This is the lowest home loan rate

A borrower may get a housing finance offer with the lowest interest rates possible, which may lead to overlooking important details. Whether you have opted for the floating interest rates or fixed interest rates, it can always witness an upsurge through the tenure of the home loan. So, while it may seem like getting the lowest interest rate is crucial, it certainly isn’t enough. These rates can and will fluctuate invariably. So, a little foresight is a key criterion currently rather than just the lowest interest rates for your home loan.

There are no hidden charges and fees

This is a popular way to suggest transparency. However, the reality behind these kinds of claims lies in the home loan agreement. Very few people take the time to go through the home loan terms and conditions. Most borrowers are so exhausted with the home loan process that they do not want to understand the implications of these rules and regulations. Based on a blunt statement like “no hidden charges”, several borrowers take up the loan offer. This doesn’t effectively make it the best home loan in India, though.

Cheapest home loan is the best home loan in India

If you take a look at the entire tenure for home loan repayment, you would realize that the best home loans in India aren’t merely about the lowest interest rates. They allow the breathing space to borrowers. There are several financial variables that come into play over a period of 20 to 30 years such as repayment options, loan tenure, loan restructuring, type of interest rates, prepayment charges, foreclosure charges, etc. Selecting the right housing finance company will allow the borrower to access these options effectively. So, select the right lender rather than just the lowest interest rates to help you to abide by the repayments more efficiently.

When you compare the housing loans in India, focus on the best one for you rather than the cheapest one available. You need to have a long term approach for home loans. Select a smart and helpful housing finance company that will assist you in every way possible so that you will repay your home loan comfortably and effortlessly.

3 Precautions To Take While Applying For Home Loans in India

You are about to enter into a legally binding financial contract for 20 to 30 years. Hence, it is vital to take the necessary precautions rather than regretting your decision later. Though a home loan is the only way to ever own a home for most borrowers, you need to take a smart risk rather than gaining a liabilitythat you cannot afford to repay. Here are the precautions that you need to consider:

Research well:

First time borrowers will always benefit more from online research. However, it is not the only way to find the required information about several aspects of the home loan. So, talk to the loan officer, branch manager and resolve all the queries you have. Take advice from a personal finance expert; however, don’t take out of context generic advice. For example: It is a standard stipulation in the home loan industry to opt for a home loan with the lowest duration possible, since that way you save sufficient funds that you would have otherwise paid as interest. But, if you have other liabilities or expenses, which does not allow you to pay more EMIs, then you will have to choose the tenure based on your repayment capacity and prepay the loan as and when you can. It will be a better strategy than setting up higher EMIs than what you can afford.

Prioritize right:

A home loan package is a multi-faceted financial product. You cannot be driven to find the lowest interest rates possible. You need to understand and select the criteria that will affect you personally. For example: Most organizations recommend step up repayment option to professionals. Will you financially be in a position to afford that? You cannot select this option without doing further research in your personal finances and taking the right advice. Simply put, selecting a wrong repayment option can be a costly mistake. You may like the no-prepayment charges policy of floating interest rates or the lower home loan rates for the floating interest. But, if you are not in a position to afford the potential fluctuations, then you will have to stick with fixed rates. Don’t choose the home loan structure by getting swayed emotionally. You need to play it smart and play it right.

Negotiate efficiently:

Once you meet the home loan eligibility criteria and submit the documents required for home loan, you will get a chance to personalize your home loan agreement. This is the right time and if you don’t take advantage of it, you never will. Whether you want lower interest rates or anything else, this is the time to ask for it. So, be effective and finance-savvy while you negotiate for the details. Most borrowers are not aware about it and miss out this opportune moment.

Eventually, when you obtain a satisfactory loan agreement, you will be glad about every minute that you spent in making it work for you.

A Borrowers Guide For The House Loan Terms And Conditions

Every finance expert and finance blog suggests that reading the fine print for your home loan agreement is very important. You must understand it, clarify your doubts and enter into a contract with complete awareness about the implications of the terms and conditions in the contract. However, most borrowers don’t. But, this long and boring document can help you to understand the ramifications of your contract like no other housing loan blog post or article can. So, it is a must-read. Though it is not entertaining, it is an important piece of information. If you would not want to read it all, here are a few crucial pointers that you should pay attention to:

Charges:

There will be an extended section about all the possible charges and fees. It will be vital to understandhow and where you will need to pay. This category will include details about:

• Prepayment charges and foreclosure charges on fixed rate housing loans
• Applicable variations in floating and fixed interest rates on housing loans
• Late payment fees for house loans
• Loan default
• Top up loan processing charges

Documentation &Notifications:

Most borrowers are likely to take certain actions under specific circumstances. They are expected to present certain documents and inform precise changes to the lender. The housing finance companies in India are at liberty to change the house loan agreement accordingly. Though the best home loans in India are accommodating in this section, it is essential for people to understand their duties as borrowersand submit all the required documents on time. The primary advantage of this kind of effort will come in handy when you want to opt for a top-up loan for renovating your home.This is more important if you are a self-employed person because there will be over-draft facilities available on the property in question. So, understanding the rules and regulations for home loans are vital.

Last but not the least, these documents are complicated and include quite a few terminologies, which will be well-explained in the document itself. So, take a look at the definitions of certain words if you do not follow them easily. It will help you to process your home loan terms and conditions clearly. When you submit the documents required for home loans and sign the agreement, these are the rules and regulations that you are agreeing to. Hence, understanding the terms and conditions appropriately will be as crucial as the signature on the document.