If you are planning for home loans offered by bank or financial institutions then you should know some useful tips to choose a right home loan. Some guidelines may be useful in this regards,
First of all you should work out that how much you can pay for. This can be done by looking at your earnings, everyday expenditure, your credit status, your down payment and the interest rate on the home loan. You should also talk to many loan counselors to get a clear idea on interest rates and monthly payment schedule.
You should also talk to several banks that propose loans and offer low interest rate. You can compare the interest rates and after negotiation you can get deal which is best suitable for you. Many banks charge a processing fee which can be varies form bank to bank and generally offers a floating or fixed interest in which fixed interest rate is always higher the floating interest rate. You can also go for a mix loan where some part is fixed and other floating. Usually, you should choose floating rates if your loan is for a short period of time.
1.Property Types: You should know more about type of property in lieu of which you seek loan. There are loans offered by banks to Resident Indians and NRIs for ready property, under construction property, self-construction and home improvement.
2.Loan Tenure: The loans provided by financial institution are offered in tenures or period of years. You should check out the tenure for loans available in the market. There are loan tenures available for upto 25 years.
3.Repayment Options - You need to choose between fixed and floating rate home loans. Many banks and financial institutions will provide you with the option of switching from a floating rate home loan to a fixed rate home loan once a year at no extra cost. But you need to check out the facts first with the loan providing firm.
Consider the whole package. If a loan has a really low interest rates, chances are the fee structure is high. If there are lots of features, it’s more than likely you’ll pay for them via a higher interest rate or more fees.
Just be sure that everything that you are getting is suited to you. If you’d like things to be more flexible, choose a loan that features flexibility. Take the time to do research to avoid problems in the future.