Here’s How To Pick The Right Home Loan Deal For Property Purchase

By Akshay Sharma June 14, 2019 Finance

Purchasing a home is one of the most crucial financial decisions that an individual makes in his/her lifetime. Over the past few decades, home purchase has become more feasible for lakhs of Indians due to the rise in affordable housing solutions and government schemes like Pradhan Mantri Awas Yojana (PMAY).

Admittedly, the ready availability of home loans has also played a crucial part in making the dreams of countless individuals a reality. Attractive interest rates, tax benefits and easy home loan eligibility criteria made it the primary source of financing home purchases in this country. You can use home loan eligibility calculator tool to find whether you are eligible or not.

Essential Things To Consider While Availing A Home Loan

As attractive as home loans are, there are numerous variables at play which you should consider carefully before opting for one. Here’s a comprehensive list of all the essentials factors to evaluate.

Compare Interest Rates

Different financial institutions offer different interest rates on their home loans. Make a detailed comparison between all of them before you finalise your lender. You can easily Compare Home Loans online these days. If you are a first-time home buyer, you may also take advantage of the PMAY scheme which ensures a lower interest rate and exemption of up to Rs. 2.67 Lakh on interest payment.

Consider The Right Loan Amount

The quantum of the loan amount that financial organisations provide is typically up to 80-85% of the value of the property you wish to buy. In 2015, the RBI allowed the LTV ratio to be up to 90% for properties below Rs. 30 Lakh.

However, simply because you can avail a loan for up to 90% of the property value doesn’t necessarily mean you should. The loan amount must correspond with your ability to repay and not the other way around.

Check Eligibility And Other Requirements

Every lender sets some home loan eligibility criteria that borrowers need to fulfil to be eligible for the loan. Choose a lender based on your ability to meet those criteria. For example, if you are a salaried individual between 23 and 62 years, you may opt for Bajaj Finserv Home Loan.

You must also take into consideration the home loan documents requirements and arrange them to get the best loan terms.

Although a secured loan, your CIBIL score is often taken into consideration. Most, if not all, financial organisations consider 750 to be a desirable CIBIL score for home loans. If your score is below that, you must take some steps to increase it before applying for a loan. Remember that your credit score determines your home loan EMIs and repayment terms.

You may use an online home loan eligibility calculator to determine whether you are qualified for the mortgage loan or not.

Choose a Lender With a Robust Post-Disbursal Service Record

There are a number of services that you may need to avail after you have taken a loan, such as account statements, interest certificates, etc.

Keeping these pointers in mind shall help you get favourable terms on your home loan. The most important aspect is choosing the right lender, and the rest will follow suit.