Look for these 5 qualities in the housing finance company you approach for your home purchase or home mortgage loan.
Buying a house is a process fraught with challenges, and some housing finance companies don’t make the going easier with tedious, long-drawn processes. As important as it is to find a good home loan, it is equally important to partner with the best housing finance company for a variety of reasons, like –
1 Lower rate of interest. The home loan rate is often the most important component of the home loan. The higher the rate of interest, the more expensive the loan becomes. Apart from a high EMI, you will also end up paying more money to the lending institution (through the repayment of principal + interest). Shop for housing finance companies offering lower home loan rates, or those that are at least willing to negotiate on the interest rate.
2 Quick loan approval. Many banks and financial institutions take a really long time to approve the loan request, and even longer to evaluate the property and paperwork. This can result in the deal being broken in case the seller wants cash quickly, or finds a buyer that can pay up at once. It also delays the overall time taken between negotiating the price and finally taking possession of the house. Housing finance companies that give pre-approval to your home mortgage loan request, are often the best bet especially for those who do not have much time to expend on the formalities.
3 Relatively low time to evaluate paperwork. The housing finance company receives your registered sale agreement, copies of age, income, employment and permanent residence proofs, PAN card, Aadhaar card, IT returns filed for at least two years, etc. After this, the company begins the process of legal and physical verification of the submitted documents. This can become a lengthy process that can delay the purchase and loan disbursal. At the end of it all, the company might even decide to reject the application if the property has some lacunae! Leading housing finance companies take less time to evaluate the property and the submitted paperwork, and if there is an issue in granting the loan approval, then you are told about it upfront so you can approach another company.
4 Low processing fees. Another factor that most new buyers fail to consider, is the processing fee charged by the housing finance company. It is normally charged up between 0.5% and 2% of the home mortgage loan value. The lower the processing fee, the more affordable the proposition becomes for you. These fees comprise application fee, loan processing fee, legal and physical evaluation, and loan agreement copy fees. You must also pay stamp duty over and above these fees. Do negotiate these fees if you have a previous relationship with the lender.
5 Flexible repayment options. Most banks and financial institutions let customers repay their home purchase and home mortgage loans before the full tenure is up. Only a few charge pre-payment fees. Look for companies that allow flexible pre-payment options so that you can be free of the loan burden much sooner, and at no additional cost to you.
These 5 pointers will help you find the best loan company for your needs. Happy house hunting!