When you enter a shopping mall to buy clothes, do you buy them from the first store you enter into? We’re pretty sure you don’t. You visit a few stores, make comparisons and then spend your hard-earned money on what you like best. Similarly do this with to take best home loan.
Regrob helps you in acquiring your dream home at the best possible price. And a best home loan deal is a major part of the process. A good deal helps you save your money and ensures that you get maximum benefits.
So here are some points that you should follow and we believe you will find the best home loan deal-
Compare Rates with different Providers
Several choices available in today’s world, you need to make sure do your research and end up with the best deal.
The number one thing you look is when making your home loan choice. Needless to say, you will have to research interest rates. Speak with your bank about the prevailing rate and take advice on what would be a good time to buy.
Some advice from us would be not to just go after the lowest rate of interest, compare other aspects too, and only then make your choice. Click here to read about home loan by Axis bank.
Improve your credit score
Your credit score and credit history will decide whether or not your loan application will even get approved. Hence, pay careful attention. First and foremost, find out what your credit score is. If it does not lie in the satisfactory range, then work on improving it.
Higher your score, higher will be the chances of your application getting approved and vice versa.
Speak with different lenders
For making the best home loan deal, you should make a comparison between at least 4-5 major lenders. Don’t just select on the basis of the lowest rate. Speak to the lenders.
Go through all the aspects, such as the base rate, the margin offered, whether any other product is being pushed, how many times the lender has reduced rate in past two years, what is the maximum tenure offered, and how is the eligibility calculated and most importantly whether a property similar to yours has been funded by this lender earlier.
All these will help you make the best choice.
Consider the life of the loan
The maximum home loan tenure offered by all major lenders is 30 years. The longer the tenure, the lower is the EMI, which makes it a very tempting prospect to go for a 25-30 year loan. However, it is best to take a loan for the shortest tenure you can manage to pay for. In a long-term loan, the interest outflow is too high and will affect you adversely in the long run.
Sometimes, it may be unavoidable to go for a longer tenure. For example, a young person with a low income won’t be able to borrow adequately if the tenure is 10 years. He will have to increase the tenure so that he can afford the EMI. For such borrowers, the best option is to increase the EMI amount every year in line with an increase in the income.
Increasing the EMI amount can have a great bearing on the loan tenure. Assuming that the borrower’s income will raise 8-10% every year, increasing the EMI in the same proportion should not be very difficult. This will disburse the loan efficiently and cost you way less. You choose the best home loan deal.
Fixed rate or floating interest rate
You can choose a home loan with a floating rate, a fixed rate and a hybrid loan. The floating rate will be related to the base rate of the bank and will change as per the market rate. While the floating rate may appear cheaper, there will be a component of uncertainty attached to it always.
If you want certainty in your EMI you may choose a loan with a fixed rate of interest. However, it will always be 1-2.5 percentages higher than a floating rate. You may also decide to take a hybrid loan that is a combination of fixed and floating rate loans. In this loan, the bank offers you a fixed rate of interest for the first 3-5 years of the loan tenure and thereby shifts it onto a floating rate of interest. Here, we suggest you choose fixed rate for short term of loan and for a long term choose floating rate of interest to get the best home loan. Click here to read about Should i fix my home loan.
We hope that you found these tips useful and we will be glad to assist you on finding the best home loan deal. Best wishes for finding your dream home and dream home loan deal!
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