Almost every one of us, at some point in life, need some financial assistance. And looking at the sky-rocketing cost of property rates, we cannot do so without the help of home loans. But before you approach any prospective lender, make sure you know some basics about Home Loan Finance which have been covered in this post.
Buying a home loan is by no means an easy task. Apart from the long-term financial liability which it creates, there are a lot of other things which also need to be taken into consideration. Let’s check out some of the important things which we must know about home loans.
- You must indulge in some ‘shopping.’
Yes, you have read that correctly! Once you contemplate on taking a home loan, make sure you spend a good amount of time shopping for the perfect loan for yourself. By doing this, you will come to know the best rate which the lenders are ready to offer you and then you can pick the best deal for yourself.
- Get some clarity on ‘charges.’
These days it is a common practice for lenders and financial institutions offering loans to add some hidden costs and charges like processing fees etc. Make sure when you go loan shopping you ask and get clarity on what extra charges the lenders usually levy on their home loan buyers and then decide accordingly.
- Penalty on Foreclosure
If you are planning on closing your home loan at the earliest, then this is something which you must ask your lender. These days there is a growing practice among lenders providing Home Loan Finance for charging a penalty fee on the borrower if they close the loan account before the date on which it is expected to expire. It’s because in such cases banks lose out on the interest factor which they otherwise would have been eligible for. So beware and watch out! There are many institutions which do not charge for part or full prepayment, especially from individuals.
- Know that you always have an option to switch!
Gone are the days when taking a home loan was a lifelong commitment, and once you sign the dotted line, you are stuck forever. Although this existed earlier, nevertheless, today customer is the king, and if any lender disappoints him on any count, he can always go for a balance transfer scheme and switch to another competitive lender or financial institution which offers him better rate as well as better service.
- Go for short!
No, we don’t mean it in any other way, but all we want to tell you is always ask your lender loan for a smaller tenure. Although this means that the EMI which you will have to take care of will be higher, nevertheless, in the long term once the interest factor starts compounding, you will benefit from that immensely.
The next time you approach a lender for home finance, make sure you ask these questions before you sign the dotted line! Stay aware, stay smart!
While searching you will come across various banks and financial institutions offering Home Loan. But be wise to choose the best among all for your purpose. IIFL Home Loans is one such NBFC that make it easier for the prospects to avail the loan.