Home loans can be a great way to own your dream house, even if you are short on funds. With simple documentation, easy eligibility and attractive interest rates, the popularity of these loans is increasing in India with each passing year. In fact, in April 2019, the housing loan market grew 18.7%, according to information provided by the Reserve Bank of India.
But with the growth in popularity of home loans, the number of lenders has also mushroomed. So, choosing the best one can often prove to be confusing for a first-time home buyer. If you too are a first-time home buyer, then worry not. Here are some tips to help you choose the best home loan provider.
1. Amount or LTV Ratio
The amount of loan you are sanctioned depends upon the value of the property as well as your salary. Generally, banks approve amounts that are around 80% to 85% of the property value. But recently, the RBI has allowed the loan to value ratio to be up to 90% for properties that are worth up to ₹30 lakhs. But whether you get this amount would depend on your occupation, disposable income, and even number of dependents. Try to choose a loan provider who offers you the highest LTV ratio.
2. Documentation
As for documentation, the documents needed for a home loan can vary. But most banks look for address proof, proof of age, and income proof as well. But there are certain banks that can have relaxed document requirements for home loans. These banks provide you a loan even if you do not have income proof. But you must have a good repayment history for this to be possible.
3. Turnaround Time
Turnaround time means the duration between your submission of documents and disbursal of the amount. Generally, banks take around 5 to 7 days to sanction the loan, provided the submitted documents are in order. But the best banks give home loans in as little as 72 hours. These banks generally have a team of technical and legal experts, who guide and review your application on the spot. This speeds up the process and saves you from multiple visits.
4. Processing Charges
Banks generally levy a charge for the processing of the application. These charges can vary from 0.25% to 2% of the total loan amount. There can also be certain terms and conditions Regarding prepayment of the loan too. Be sure to go through the terms and conditions thoroughly before you choose a home loan in India.
5. Responsiveness
There are instances when the policies are modified or changed by the Reserve Bank of India. It is important to know by how much and how quickly a lender changes the interest rate in such cases. For instance, if there is a lender that is reducing the interest rate, following a repo rate cut, then it is a good idea to go for such a lender.
Apart from these, the obvious thing to keep in mind would be the interest rate. This would have a great impact on the tenure as well as the EMIs.
Click At Info 