The best home loan – it’s something every potential borrower is looking for when considering housing finance loans. Contrary to common belief, the best loan isn’t the one that comes with the least charges. Rather, the best loan is one that suits your needs the best and covers every possible aspect to ensure your journey through debt is a smooth and hassle-free one.
In case you are in the market for a home loan but aren’t exactly sure how to choose the best for your needs, this article will cover 5 things that you should look for when on the hunt for the housing finance loan for your homeownership plans.
1. LTV ratio.
The best home loan will come with high LTV or loan to value ratio – a financial term lenders use to express the ratio of a loan to the value of an asset purchased. Most lenders will provide up to 0% of the property’s value as the loan amount, depending on the loan slab you fall into. A higher LTV means you have to arrange a lower down payment ensuring you become a homeowner at the least possible cost out of your pocket.
2. Longer tenures.
The longer the tenure, the easier it is to repay a loan. This is because when you opt for a longer loan tenure, you spread out the repayment over more months resulting in lower EMI amounts. Sure, longer tenures also mean more interest payable but you can always cut short the tenure to reduce the total interest paid by making the prepayment as and when you are in a financial position to do so.
3. Lower charges.
Besides for the interest rate, there are a number of expenses that accompany a home loan. For instance, when you apply for the loan, you’ll have to pay a processing fee which could be as much as 2% of the total loan amount. So if your loan is of 20 lakhs, the processing fee is around 40K. Other charges include prepayment charges, document handling charges, stamp duty, late payment charges, etc. Remember to compare all the charges carefully before selecting a lender.
4. Value-added services.
Some lenders will offer you expert legal and technical counseling to help you make the right home buying decision. This will be very useful considering that taking a home loan is big-ticket debt and you’ll any and all the help you can get to ensure you make an informed decision.
5. The best home loan comes with multiple repayment options. In case you are in the market for a home loan but aren’t exactly sure how to choose the best for your needs, this article will cover 5 things that you should look for when on the hunt for the housing finance loan for your homeownership plans.
1. LTV ratio.
The best home loan will come with high LTV or loan to value ratio – a financial term lenders use to express the ratio of a loan to the value of an asset purchased. Most lenders will provide up to 0% of the property’s value as the loan amount, depending on the loan slab you fall into. A higher LTV means you have to arrange a lower down payment ensuring you become a homeowner at the least possible cost out of your pocket.
2. Longer tenures.
The longer the tenure, the easier it is to repay a loan. This is because when you opt for a longer loan tenure, you spread out the repayment over more months resulting in lower EMI amounts. Sure, longer tenures also mean more interest payable but you can always cut short the tenure to reduce the total interest paid by making the prepayment as and when you are in a financial position to do so.
3. Lower charges.
Besides for the interest rate, there are a number of expenses that accompany a home loan. For instance, when you apply for the loan, you’ll have to pay a processing fee which could be as much as 2% of the total loan amount. So if your loan is of 20 lakhs, the processing fee is around 40K. Other charges include prepayment charges, document handling charges, stamp duty, late payment charges, etc. Remember to compare all the charges carefully before selecting a lender.
4. Value-added services.
Some lenders will offer you expert legal and technical counseling to help you make the right home buying decision. This will be very useful considering that taking a home loan is big-ticket debt and you’ll any and all the help you can get to ensure you make an informed decision.
Another vital factor you need to look for is the number of repayment options being made available to you. The more options you have, the easier it will be to choose a plan that suits your financial needs and requirements. Most lenders offer at least 5 different repayment plans.
Look for a loan that provides you all above factors at the least interest rate; the one that does is the best home loan for your needs. We hope this article has been helpful, good luck and all the best.
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