Generally, most of us will find out about a home loan provider through estate agents. These home loan providers are basically banks and non-banking financial institutions (NBFCs), which will provide you the facility to buy a home through a home loan.
Banks and NBFC will offer you different types of home loans, and each type of loan will suit a particular customer, and it comes with different terms and conditions.
So it is better to go well with the home loan solution and choose the best one for yourself. But how can you choose the best home loan solution before applying for it? For that, you should ask some questions from your home loan provider.
Loan processing time will vary from bank to bank. Therefore it is better that you ask the loan provider about the processing time. If all your documents are reasonable, the bank usually takes about a week to process the loan, along with many banks offer 4-hour home loan approval and approval. If the bank has to make a personal visit to your site, it may take longer to process the loan.
What securities should the bank provide?
A home loan insists on some collateral securities, however, be sure to get clarity on this from the bank. Banks will usually ask for property papers when applying for it. Ensure that the property is free from all legal disputes and should be technically approved.
What is the term of the home loan?
The term of home loan varies from one bank to another. However, a home loan is granted for a maximum period of 20–30 years, provided that the term does not extend beyond 65 years or retirement age, whichever is earlier.
Am I eligible for the loan amount requested?
A loan provider always fixes the loan amount based on the repaying capacity of the borrower. Therefore, you should discuss your income details with your home loan agent so that you can decide the amount of the home loan.
Banks may reject a home loan application due to a wide discrepancy between the financial ability to repay the loan and the loan applied.
What will be the down payment?
Typically, banks finance up to 90 percent of the loan amount. The remaining amount has to be arranged by you. For example, if you have applied for a home loan of Rs 40 lakh, then 10 percent of the 40 lakh rupees, ie 4 lakh rupees will have to be paid as a down payment.
What will be the rate of interest?
The bank charges interest rate on the loan amount. These rates will vary from bank to bank. For example, the home loan interest rate charged by Bank A would be 8.35 percent, but the bank’s interest rates on home loans would be 8.40 percent.
It is mandatory to know the interest rates as this will determine your monthly EMI. Choose a bank that offers a lower interest rate as it will help you save your monthly budget.
What type of home loan do you offer?
Banks provide home loans not only for buying houses but also for other purposes like renovation and construction. For example: If you need money for the construction of a new house then you should go to the bank that offers home construction loan. Apart from this, banks also provide home improvement loans, balance transfer loans etc., so choose according to your requirement.
Can I include my family member’s income when applying for a home loan?
You have to provide your correct income proof to the home loan provider and the loan amount will be decided based on your income. But if your income is not enough to get the required loan amount, then you can add income for your parents or spouse.