The implantation of RERA Act and introduction of GST in the real estate industry has been a turning point for the housing sector. Although initially experiencing a huge slump in business, the real estate sector rose through the ashes and completely transformed the market. Simultaneously the home loan industry too made progress as availing home loans has never been easier. Planning to finally buy your dream house? Researching various lending institutions to find the perfect fit? If so, check out these tips to understand your choices and make an informed decision.
- Figure Out Your Loan Options
Several lenders offer different types of loans based on the interest of the homebuyer and their financial conditions. They offer three type of loans – floating rate, fixed rate and combination loans. In adjustable loans, the home loan interest rates are linked to the lender’s benchmark rates and a change in the initial rate will result in a change in overall home loan interest rate. As the name suggests, fixed rate loans have a predetermined interest rate during the time of loan sanction. A combination loan, however, offers homebuyers the best of both worlds.
- Understand Your Entire Home Loan Expense
When availing a home loan, you need factor in all your expenses to determine the official loan amount. Apart from the original loan amount, additional costs such as EMI instalments, processing fees, administrative charges, penalties, etc., can change the actual loan value. Certain financial institutions, especially NBFCs offer free home loan calculator and home loan EMI calculator to help you figure your entire expenses and avoid any unwanted surprises.
- Be Ready to Use Your Savings
One of the top reasons for availing home loans apart from insufficient funds is lack of liquidity. However, it is important to note that lenders do not offer applicants the entire amount of the property. They sanction about 50-80% of the property value and tell the buyer to pay the remaining amount as assurance of their financial stability and guaranteed returns.
Still on the hunt for the right place to avail a loan? Check out NBFCs like Tata Capital as they offer unsecured home loans with high home loan eligibility and flexible EMI options to help you buy the house that you deserve!