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Step-By-Step Guide to the Right Home Loan
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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.
Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.
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To buy a home is a dream we all want to realize as soon as possible.
However, with the growing real estate prices, it is not an easy task. For most of us, owning a house becomes possible only with the help of a home loan. Luckily, home loans are offered by many banks and financial institutions, but it is often a puzzle to pick the right one.
Here are top tips to help you arrive at a sound decision:
Interest Rate
The rate of interest usually remains standard across most banks.
However, it is likely that you may get competitive rates from the bank where, for example, you have your savings or current account. In addition to this, you should also check for floating and fixed interest rates. Explained simply, home loan floating rates can change depending on the bank or financial institution and market conditions during your loan tenure; fixed rates will remain unchanged throughout the tenure.
Processing and Prepayment charges
Banks levy a few charges on the borrower during the term of a home loan. Processing charges are deducted by banks for processing of the application. These can vary depending on the loan amount and the financial institution.
There are also certain terms and conditions laid down around foreclosures and prepayments made towards the loan. In addition, some institutions may also charge you if you transfer your remaining home loan amount to another bank during the tenure. Confirm all these details from your loan advisor before you sign on the dotted line. This will help you avoid any unpleasant surprises later.
Property location
If you have already zeroed-in on the house that you wish to purchase, its location will play a vital role in choosing the bank you apply to.
Most institutes decide on the maximum loan amount on the basis of the location of the property, whether it is located in a Tier 1, 2 or 3 city. However, even if your property is in a Tier 1 city, there may be areas that are blacklisted by the banks due to the number of defaults that might have occurred. So, do your research.
Keep these pointers in mind while you browse the net or speak to an advisor before zeroing-on on your home loan provider.
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