Choosing the right lender and making the right decisions decide whether you will go through a terrible loan experience or a good one. A little research would save anyone from a sea of confusion and trouble, so here are 10 useful tricks to get the best home loan experience:
Don’t fall for the lowest rate trick
This is one trick you should never fall for when taking a housing loan. Every lending bank will state that its interest rate is the lowest offered. Should you believe it?
Go online and check. Find out about the home loan rates of other banks. Maybe other banks are offering the same rate. If that is the case, take the one with the best flexible terms and conditions.
Pick floating over the fixed rate of interest
Opting for a 3-5 year fixed rate of interest home loan is smart. However, this does not apply to a 20-year home loan.
A long-term home loan should be on a floating rate of interest. Interest and EMI will remain unchanged for the entire loan tenure. EMI and rate of interest for floating-rate loans will reduce with each passing month.
RBI actions leave fixed-rate loans unaffected. Floating rate loans benefit when RBI cuts the rate. Fixed-rate loans also charge extra for foreclosures, over and above the outstanding.
Choose reducing balance
Opt for a daily reducing balance loan. This will have an impact on partial payments. With a monthly reducing option, pre-payment between two EMIs will be based on the next month’s housing loan interest rate, not on the previous month’s EMI.
You will end up paying more money when you close.
Remain unaffected by other experiences
Stay aloof from the experiences of others who have applied for and have taken home loans. The housing loan experiences of friends and family members shouldn’t affect your decision. Their “good” or “bad” home loan experience doesn’t matter.
Base your dealings with banks on cold calculations. Don’t let emotions intervene. Base every decision on hard Mathematics.
Go through reviews & comments
Do not make the final decision before going through other online reviews and comments left by customers.
If the negative comments abound, think before you take the plunge.
If the positive comments and reviews sound and read sincere, it’s something to think about when making a decision.
Talk to experts
There are always industry experts to fall back on for advice; for example, professionals who know a lot about home loans and people who have worked in banks.
People who have taken home loans are the best to approach for advice on housing loan interest rates, as are people who disbursed loans.
Visiting banks and talking to bank employees is another way to ensure a good home loan experience.
Compare different home loans
When asking for a home loan, enquire about the different housing loans on offer. Some banks will have more than one home loan product to offer. Get information on all of them for comparison.
Choose the one which suits your finances the best.
Look for the best post-services
Borrowers mostly ignore this aspect, but post-services must be good. Home loans are not short affairs. It is similar to a long-term relationship.
The post-housing loan disbursement experience should not be a disappointment. The post-sale services of the lender should be good and flexible. Ensure that the bank is customer-friendly so that the overall experience goes smoothly.
Get data from 5 banks
Don’t just rely on one or two banks. Talk to five to six different banks. Then make a comparison of the housing loan interest rates and other essentials.
The comparison will help in choosing the bank most suitable for your unique needs.
Read all documents
Finally, sign on the dotted line only after reading all documents related to the home loan. The majority of borrowers give little or no importance to reading documents related to the loan.
But it is important to make sure that nothing is hidden between the lines so always read everything before signing documents.
The bank with the lowest housing loan interest rate may lack other aspects relating to the home loan. Maybe there are hidden costs, or it could be that foreclosure isn’t as easy as you thought with that bank. Be vigilant and aware so that your loan experience goes well and smoothly!