Generally, most of us would find out about the home loan provider through property agents. These home loan providers are basically the banks and non-banking financial institutions (NBFC), who will facilitate you to buy a home through home loans.
The banks and NBFC will offer you various types of home loans, and each type of loan will suit a particular customer, and it comes with different terms and conditions.
Hence it is better to go thoroughly with the home loan solutions and choose the best for yourself. But how can you choose the best home loan solution before you apply for it? For that, you must ask certain questions to your home loan loan provider.
Here is a list of questions which you must ask:
How much time will it take to process the loan?
Loan processing time will differ from bank to bank. Hence it better that you ask the loan provider regarding the processing time. If all your documents are proper, then the bank usually takes about a week to process the loan, also many banks also provide 4 hour home loan approval and sanction. It may take more time to process the loan if the bank has to make a personal visit to your site.
What are the securities that must be given to the bank?
A home loan entails certain collateral securities, however, do ensure to get clarity on this from the bank. Usually, while applying for it, the banks will ask for property papers. Ensure that the property is free from all legal disputes and ought to be technically approved.
What is the tenure of the home loan?
The tenure of the home loan varies from one bank to another bank. Although, a home loan is offered for a maximum period of 20-30 years, provided the term does not extend beyond 65 years of age or the retirement age, whichever is earlier.
Am I eligible for the requested loan amount?
A loan provider always decides the loan amount based on the repayment capacity of the borrower. Hence, you must discuss with your home loan agent about your income details so that you can decide on the home loan amount before you can apply for it.
Banks may reject home loan applications owing to the wide discrepancy between the financial ability of the borrower to repay the loan and the loan amount applied.
How much will the down payment be?
Usually, banks finance up to 90 percent of the loan amount. The remaining amount has to be arranged by you. For instance, if you have applied for a home loan of Rs 40 lakh, 10 percent of Rs 40 lakh, i.e. Rs 4 lakh has to be paid as a down payment.
How much will the interest rate be?
The bank levies the interest rate on the loan amount. These rates will differ from one bank to another. For example, home loan interest rates levied by Bank A will be 8.35 percent, but Bank interest rates on home loans will be 8.40 percent.
It is imperative to know the interest rates as it will determine your monthly EMIs. Choose the bank that offers lower interest rates as it will help you save your monthly budgets.
What type of home loans do you offer?
Banks provide home loans not only for buying a home but also for other purposes like renovations and construction. For example: if you need funds for constructing a new house then you must go to the bank that offers Home construction loans. Apart from that, banks also offer Home improvement loans, Balance transfer loans, etc. So choose as per your requirement.
Can I include my family member’s income while applying for a home loan?
You must give your correct income proof to the home loan provider and depending on your income, the loan amount will be decided. But if your income is not sufficient to get the required loan amount, then you can add the income for your parents or spouse.