More than just the rates: Getting the best out of home loan offers
Getting the best home loan scheme depends greatly on the rate you are able to avail. The lower the interest rate the better the home loan scheme is thought to be as you would end up paying lesser in the longer run. But, there are many other factors which determine a good home loan.We have listed some of them below:
- Rather than chasing the lowest rate of interest, look for competitive rates. The lowest interest rate is not always the best.
- The kind of rate you choose also affects your home loan. It is better to choose a floating rate instead of a fixed rate as the interest rate may go down during the tenure of your loan.
- Make sure you choose a lender who offers a daily reducing balance, not monthly. In a monthly reducing balance plan, even if you partially close an amount between two EMI dates, the repayment is considered only from the next EMI date. This means you would end up paying interest on the amount already paid.
- Do not get swayed or influenced based on a previous product or by the suggestions of friends and family. Do your research and pick the plan best suited for your financial condition.
- Read the online reviews of the products before going ahead with them. Also, make sure that the reviews are from genuine reviewers and not just dummy accounts.
- Your wealth manager, bank relationship manager, chartered accountant, tax planner and your finance controller or CFO in office are the best sources of information. Take their advice before taking any decision as they have experience in guiding people towards home loans.
- Try a new-age product which could save you money. The standard home loans often don’t suit all clients who are availing of the loans for tax benefits and/or waiting for another property to be sold and to pay off their debt.
- Make sure that the lender you are planning to take the loan from offers good services. A home loan is a long term relationship between you and the lender and it is important that this relationship stays cordial. Make sure they offer services such as tax certificates, list of documents, part closure services, etc.
- Always compare at least 6 major lenders by asking your mortgage advisor. Look at the best rate, not the lowest, the margin offered, maximum tenure offered, etc.
- Lastly, the time taken for processing the loan is also an important factor to take into account. If the loan is not disbursed on time, the builder may start sending you delay-penalty notices or the seller withdraws from the deal.Theprocessing time becomes a very important aspect to consider.
Thus, while interest rates do have a big sway on the scheme which you choose, they should not be the sole reason for choosing a specific scheme. When all the factors work in your favour, you will have found a home loan which suits you best.