Commitments can seem daunting, especially if they are long-term. Whether in business or relationships, decisions that can and will eventually alter your life’s trajectory can be nerve-wracking. It applies to choices you need to make regarding finances as well. Ideally, it would be great if we could all afford the “house of our dreams” and live that picturesque fairytale we grew up watching in the movies. But the reality is that every one of us needs a little assistance. So, when it comes to home loans, our advice to you will be that you keep your mind and your options open.
If you are at the stage of wanting to take a home loan, then we are pretty sure you have done your fair share of research on the topic. However, although information is abundant online and even in person, it is easy to be overwhelmed as you read further. Are you currently in such a dilemma? Then this article is for you.
Key aspects to focus on when deciding on a home loan in India
We have curated the key aspects you should focus on while deciding which home loan to choose from and simplified it so that you are not burdened with financial jargon.
· Documentation – The thing that most people find taxing is the emphasis laid on documentation by lenders. Yes, it can be annoying for you but for lenders, possessing proper documents is quite literally what makes or breaks the potential relationship. Times have changed, and some lenders today have found more subtle ways to conduct assessments. However, if they find any shortcomings, there is a huge probability you will be denied a home loan. So first and foremost, it is best to keep track of and maintain proper documentation.
· Rate of Interest – This is a no-brainer. The rate of interest is perhaps the best determinant of whether a specific home loan is for you. The rate of interest on home loans in India has gradually increased as the years go by, so it’s best to make a rational decision of the ROI you will be most comfortable with from the options available to you and decide from there. Most importantly, we advise you to communicate with the lender about what type of interest (floating or fixed) is and that frequent rate changes do not occur.
· Duration – The number one problem that home loan applicants face is the lack of further communication after the initial discussion with lenders. Be wary of lenders who have a reputation for ghosting people, and make an informed decision to borrow from reputable sources. Speed and simplicity are key when discussing with potential lenders, so it’s wise to note this.
· Availability of Pre-Payments – This may not sound like a huge deal, but lenders who will do every mental cartwheel and give you every excuse in the book to stop you from pre-payments are a red flag. Regardless of the interest rate being offered, pre-payments will reduce the total amount of the home loan you have taken out. So, you must be careful before you commit with your lender and ensure that the option to make pre-payments can be availed once a contract is in place.
· Reputation – Although we’ve briefly mentioned this before in the passage above, we cannot stress the vitality of reputation enough. If your lender is doing a detailed background check on you, there’s no reason you can’t do the same. Ask around and even online! And no, it’s not technically stalking, so there’s no need to feel guilty about conducting full-blown research cause it’s always better to be safe than sorry. Googling their name, going through their website and reading reviews are great precautionary measures that you can take. Ensure you thoroughly read a sample of their ‘Most Important Terms and Conditions Document’ that is usually available on their websites.
Now all that is left is to pick the lowest home loan interest rate in India that you feel will be best for you. We can’t dictate what that will be, but the best advice we can give you is to make an informed and rational decision and not make a hasty choice you will regret later.