Are you partnering with the best loan company?

Buying a house is made much easier when you borrow a home loan. But choosing the right home loan, and the right lending institution, is the tricky part! We list the parameters you must look for when choosing the best housing finance company –

* A competitive rate of interest.

The most important parameter to check when applying for a home loan is the rate of interest that the housing finance company is offering. The lower the rate of interest, the lower is the monthly EMI you repay. Also, you pay an overall lower amount of money to the lender when you get a lower interest rate. Shop around for good interest rates from amongst leading housing finance agencies before making your final choice.

* Easy documentation and application process.

Most lending institutions offer competitive rates of interest and other attractive features, but their application and documentation processes are extremely cumbersome. Add to that the legal and property evaluation conducted by the housing finance company, and the overall time taken from application to disbursal stretches on for quite a while. This is not ideal when you are trying to close a deal on the house in a hurry. Look for a leading housing finance company that offers online application and quick approval, despite conducting all the necessary background checks.

* Flexibility to incorporate fixed and floating rates of interest to save money.

A fixed rate of interest is often higher than a floating rate of interest, though it offers predictability and does not fluctuate as per rate changes in the markets. Overall, you may end up repaying a lot more money to the lender than the sum you borrowed, with a fixed rate of interest. However, some leading housing finance companies offer fixed rates for certain tenures of 2, 3 and 5 years, after which the interest switches to a floating type. This saves a lot of money over the long run.

* Several types of loan products.

Most lending institutions in the country offer generic home loans, but leading housing finance companies have several kinds of home loans to offer. These range from home purchase loans to construction loans, and from loan against property to commercial property loans. Always go with a lender that has diverse loan products, easy documentation and quick approval processes.

* Flexible repayment options.

Repaying the loan is the most important task for you. Instead of repaying only via monthly EMIs, you can pre-pay extra sums of money so that the principal borrowing is reduced over time. The housing finance company must have flexible repayment options, and must offer a loan transfer facility as well.

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