With a variety of offerings from various home loan companies, you have to look into various features, before choosing the ideal one that matches your home loan requirement. Here are some tips to choose the ideal home loan.
Choose the institution which gives a percentage of loan that suits you the best.
You should check with the percentage of loan in relation to the purchase price the bank or housing finance companies are offering to you. After doing a survey, you can choose from which bank or housing finance company to go for your loan. If you have enough savings to afford a lump sum down payment then you can choose the financial institution which offers 80% of purchase price as loan. If you don't have the money you can choose the one which given you 85% as loan. But you have to cough up more EMI.
Know the interest rate, processing fee and prepayment charges.
Different banks and housing finance companies offer different interest rates on home loan. You should decide on the interest rate at which you will be comfortable to pay the EMIs. The processing fee and prepayment charges also differ. You should know the prepayment charges before hand in case you want to repay the loan with surplus funds you have afterward.
Choose the institution with simple loan process within shorter time.
Home loan process is somewhat tedious and time consuming. You need to provide all relevant documents including your property and income statements. Sanctioning of the loan also takes much time. So you can choose the right institution which will provide you the loan with less hassles and shorter time frame.
Home loan interest rates currently available.
HDFC Bank has reduced the floating interest rate for a limited period to 10.15-10.65 percent to for loans up to Rs.75 lakhs and 10.50-11 percent for above Rs.75 lakhs. ICICI Bank has also reduced the home loan rate to 10.15 percent for a limited period till 30th June 2014. However, only salaried employees can avail the floating rate loans below Rs.75 lakhs. LIC Housing Finance offers floating interest rates of 10.25-10.50 percent and fixed interest rate of 10.25-10.35 percent. SBI offers loan at 10.15 percent up to Rs.75 lakhs and 10.30 percent above that limit.
Check on the special concession schemes.
Some banks offer special concession schemes. For example, State Bank of India offers loan at a concession rate of 10.10 percent up to Rs.75 lakhs and 10.25 percent for above Rs.75 lakhs to women. South Indian Bank offers home loan at 10.50 percent for loan of Rs.30 lakhs and up to 5 years for senior citizens.