Home loans are one of the most convenient funding options available for individuals looking to purchase a home of their own, owing to competitive interest rates and substantial loan amount. However, borrowers should opt for home loan lender that offers the advance at affordable interest rates and terms to avoid paying a considerable amount as interest in the long run.
Borrowers can follow the tips below to choose an ideal home loan lender –
Compare LTV
While looking for a lender, borrowers need to consider the loan to value ratio extended by different financial institutions. Generally, in case of home loan, the amount extended by the lender is 80-85% of the property’s value. However, the exact amount depends on the concerned financial institution or NBFC.
Go through home loan offers
Borrowers also need to take note of the features and benefits offered on home loans by a lending institution. Some of the features that one should look for include EMI calculator, part-prepayment and foreclosure facility, flexibility in repayment, top-up facility, etc.
One should also look for financial institutions that allow borrowers to apply for a home loan online.
Check interest rate and associated fees
Home loan interest rates offered by lending institutions is a crucial factor that borrowers must take into consideration while selecting a lender. It is because the interest rate has a significant impact on the EMI amount, which, in turn, affects a borrower’s repayment plan.
Apart from home loan rates, the type of interest rate – fixed or floating also impacts the loan EMI. Thus, interest rate type applied by the lender is also another essential factor that borrowers need to consider.
Further, borrowers should check a lending institution’s responsiveness to a rate change by RBI. It is also an essential factor, especially for borrowers who are planning to avail home loan at a floating interest rate.
Read Also: Tips to choose an ideal home loan lender
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