Home loans are considered the best way to purchase your dream home. With interest rates starting at less than 7.99%, this is a very attractive time for you! But before getting carried away by these low rates, make sure that it’s right for both parties involved (the lender and borrower).
You don’t want an expensive house with high monthly payments just because of its lower mortgage costs- take our 10 factor checklist below into consideration when choosing before home loans in India that which type will work well based on what suits you best:
Rate Of Interest
In India, the home loan interest rate starts around 7.99%. However if you include your wife as a joint owner with yourself there’s also an 0.5% reduction which makes it ideal for couples who are looking to own our first homes together!
Equated Monthly Installment (EMI)
EMIs are one of the most common and important components for financing your home. Use a home loan calculator to estimate your monthly EMI for a given loan amount, interest rate and tenure. Adjust the tenure so that you get an EMI amount that is well within your budget.
With a home loan, you can get up to 80% of the value as a loan. In fact there are lenders like Grihashakti, which disburse upto 90%. Before choosing your repayment capacity and EMIs consider future expenses including children’s education or how much more money will be required for them in 15 years time. Also factor in your retirement and other costs such as insurance.
There is a processing fee charge you have to pay to process your home loan application by the lender. It can be upto 3% of the total loan amount, depending on the lender’s policies, your eligibility and any offers you may qualify for. .
Check with lenders if you are eligible for pre-approved loans. This usually works best for salaried individuals with an excellent repayment capacity, good credit score and a long standing relationship with their banks.
Fixed And Floating Rates
The home loan interest rates in India have been witnessing a reduction with time. If you’re taking the fixed rate, your payment will not change whether or not market fluctuations happen.
Some people go for a floating rate of interest as it helps reduce the payout when and if rates fall. Financial advisors often suggest customers opt to have fixed-interest home loans, which provides them with lower payments over time while their EMIs remain consistent no matter what happens in terms of fluctuation between now and then; but this may be less appealing since you’re not saving anything!
If you want to save money on your home loan, opt for a shorter tenure. That way the total interest payout and it will take much less time to repay it. Make sure that this choice works well with other financial goals though because a higher EMI will strain your budget, particularly in case of future (or current) obligations.
You should protect yourself from potential losses to your home and assets with a life cover as well so that you and your family are protected in case something happens.
Advantages of Grihashakti Home Loans
- Doorstep service with a dedicated Executive
- Up to 30 years loan tenure
- No prepayment charges on foreclosure
- Funding up to 90%* of the property cost
- Flexible repayment options
- Customized home loan eligibility programs
When choosing a home loan, make sure to look for the best customer service. Choose an institution that will provide you with excellent post-disbursal services and be flexible enough in changing your tenure or prepayment willingness if need be. Also ensure they have all of your documents ready before extending any funds as this can save time down the line!