Choosing A Right Home Loan Lender

Home Loan plays vital role in fulfilling your dream for buying a property or investing in real estate sector. Various banks offer home loan with their own terms and conditions. The first factor most people consider is the interest rate and EMI, but that’s only the beginning. Many banks may be having some fine print or “conditions apply” that need to be carefully looked into. It is better to verify the facts properly before deciding to go for a loan offered by the lender.

Tips for Choosing right Home Loan Lender

It is advisable to do proper research before going for any loan. Choosing a right home loan lender is vital because there are numerous customers who lose out on their property deals due to delays and complications at their lender. When you are comparing offers, ask each lender about their policy regarding locking in their quoted rates and see whether there is a fee. Following are some important points to consider when choosing a home loan lender.

• Lender’s reputation: If you don’t have any past experience with the bank earlier, it is good to check their reputation by talking to family and friends. It is essential that the lender provides quality customer service and maintains high customer satisfaction levels as the relation between the borrower and bank spans for 10 to15 years.

• Switching option: Most lenders offer both fixed and floating interest rate. However it is possible that you might want to switch from fixed to floating or vice versa depending on market scenario. Confirm with the home loan lender whether switching option is available and charges for the same.

• Speed of Loan sanction: Typically, it takes about 10 to 14 working days for the processing of a home loan if you have all the documents in order. However, there are numerous customers who lose out on their property deals due to delays and complications at their lender. Ask your lender and friends who have dealt with the same lender about the speed with which their loan was processed.

• Eligibility criteria: Every bank has its own set of eligibility criteria that may differ slightly. The eligibility criteria are related to your age, income, past repayment history and the cost of the property. It also considers your work experience, number of dependents, spouse’s income, stability of income and employment, assets, liabilities, etc.

• Hidden costs: Hidden Costs are cost that involved with most loans that prick the borrower’s pocket. It is advisable to decide on all legal charges, down payment, pre-payment charges, valuation fees, processing fee and other hidden costs before a loan is availed.

• Prepayment penalties: Often, customers are asked to sign loan documents with no mention of prepayment penalty. Thus, they are not even aware of what the actual prepayment charges are. Prepayment penalties can be negotiated and competition among banks can also force them to be kinder on their customers. Banks may waive off prepayment charges if you negotiate.

Different banks have different yardsticks to calculate loan eligibility. There are now many loan products being offered by various financial institutions and banks. So, it can be pretty confusing and hard to choose one organization to apply for a loan. It is advisable to do proper research before going for any loan. It is better to verify the facts properly before deciding to go for a loan offered by the lender. Make sure that home lender you choose is quick in processing and disbursal of loan. Confirm with the home loan lender whether switching option is available and charges applicable. If you don’t have any past experience with the bank earlier, it is good to check out their reputation by talking to family and friends.

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