New Delhi | Jagran Business Desk: Owning a house is one of the biggest dreams we all cherish, especially in metropolitan cities where there is a crunch of space and living is costly. Everyone wishes to have a place which they can call their own.
However, given that the property prices are skyrocketing at present, it is very normal for people to opt for a home loan. Finance is a major factor that stops our dream from coming true. If you are also somebody who wishes to buy a house soon, you must know choosing the right lender is the first step to go.
Here is a look at everything you need to know about home loans.
1. Can the lender company be trusted?
The reputation of the lender company is the most important thing that will help you decide whether you can trust it or not. Ask yourself questions like how many days has it been in business? Has it been ethical and professional?
2. What are the eligibility criteria for a home loan?
While some banks might only look at your salary documents, others may collect details related to your living standards, income from other sources, etc. Furthermore, traditional banks have very tough eligibility criteria. On the other hand, Housing Finance Companies (HFCs) and Non-Banking Finance Companies (NBFCs) are slightly more flexible. You can check your loan eligibility criteria for free on many websites on the internet.
3. What is the rate of interest?
Often, the rate of interest that is presented to you is not the real picture. Although you can opt for a loan with a lower rate of interest, be aware of the total interest payable after the tenure of the loan. Also, check whether the bank is offering the loan on a floating interest rate or fixed rate.
4. Is the fee structure transparent and can you pre-pay the loan easily?
You should be aware of the fees to be charged for the entire loan tenure. This includes processing fees, legal and technical fees, mortgage fees, foreclosure charges, etc. You must ask these things to get maximum clarity before taking a loan.
In addition, at the time of taking the loan, one should ensure that the facility of pre-payment is available. Most of the banks do not encourage pre-payments as it causes them losses.
5. Should you take home loan insurance?
It is very important to keep your family safe from any unforeseen circumstances. In such situations, it is advisable to get insurance for your outstanding liabilities. This secures the future of your family.
Posted By: Sugandha Jha