We present the parameters to look for when selecting the housing loan that fits your requirements.
After a long search for your dream home, you have finally zeroed in on an ideal property. Now all that remains is to apply for a home loan to finance the purchase. The home loan application process can quickly become confusing, especially if you are first-time buyer. We break down the process for you, identifying the parameters you must look for in the best home loan –
* Research what you need. There are several kinds of housing loans. If you are purchasing a new house, then you need a home purchase loan/home loan. Leading housing finance companies like Punjab National Bank Housing Finance Ltd. (PNBHFL) offer several other types of housing loans, such as Home Construction Loan, Home Extension Loan, Home Improvement Loan, Residential Plot Loan, NRI Loan, Unnati Loan, Pradhan Mantri Awas Yojana Loan, and Loan against Property. You can calculate your finances and EMIs (using an EMI calculator) based on the category of housing loan you need.
* Pick the lowest EMI. The EMI is often the most daunting part of the loan equation. Leading loan providers advise customers to pick a loan with a low EMI pay-out per month. The lower the EMI, the more money is left over from your income to look after other expenses. You can use the lender’s online EMI calculator to find the lowest figures based on the principal borrowing, interest charged and the loan tenure. It is recommended that you opt for an EMI lower than 50% of your monthly income.
* Check the interest rates and transfer possibility. The interest rate charged on the home loan can make the loan expensive or affordable. The higher the rate of interest, the higher is the EMI. You can scout around for the lowest interest rates in the market, and use an EMI calculator to find out how much difference a lower rate of interest will make to your monthly outgo. Do note that you can transfer the home loan later to another lender that offers a lower rate of interest than your current lender.
* Find out the lender’s processing fees and other charges. Another key consideration when choosing the home loan product is the schedule of the lending company’s fees and charges. You are charged application and processing fees, stamp duty on the loan agreement, pre-EMI cheque, and any other incidentals during the loan application process. You may reduce the application charges by applying for the loan online.
* Inquire about documentation and disbursal TATs. You could have the best interest rates and the lowest EMIs on your hands – but it all comes to nought if the lender takes a long time to process your application and even longer to disburse the loan. A faster TAT (Turn Around Time) is essential in most home loan cases, especially in NRI loans. Leading lenders like PNBHFL have some of the fastest TATs in the industry, with a smooth and easy documentation process, insta-approval facility and quick disbursal times.