Most people need a home loan to buy a house. You can hunt for a loan after you shortlist a property or you can go to a lender first, who can sanction you a pre-approved loan.
The second approach gives you, the homebuyer, an edge on the negotiating table.
Here are some tools that you can use to land a home loan. You can use these smart ways to get the best home loan from the lender.
Loan eligibility
Many people go for home loans because they may not have ready cash to buy a house. But no lender will give unlimited loans. It will evaluate your eligibility before sanctioning you a loan.
To know this eligibility, you can go to any online loan eligibility calculator. Your eligibility depends on factors such as: your income, expenses, other ongoing loans and age.
Typically, lenders will only give you a loan whose equated monthly instalment (EMI) is up to 50% of your monthly income, taking into consideration all your other EMIs. Your loan eligibility can differ from lender to lender.
For instance, a lender may not offer a loan tenure beyond retirement, while others may. In such a case, the lender offering a longer tenure can give a higher loan amount.
To check your eligibility, you can go to the site of each lender or go to loan aggregator, or comparison sites like www.bankbazaar.com, or www.paisabazaar.com.
Compare lenders
Once you know which lenders can lend you the desired amount, you should compare their offerings. Use loan aggregator websites for this. There are various things to consider apart from the interest rate, such as: processing fee, administrative charges, and any of several transaction charges.
Processing fee usually ranges between 0.25% and 1% of the loan amount, but some have a flat fee structure and some others may place a cap on this fee.
You can also find lenders who will waive the fee, and any other charges. Always evaluate the complete loan deal, to see who is giving you a better deal or a lower EMI or loan tenure.
Lender approved developers
Many lenders have the list of approved housing projects. You can check the list of approved projects on your bank or lender’s website. In case you choose a property in an approved project, your loan application is more likely to get approved, and faster too.
Instant home loans
Lenders are focusing on digital products to provide faster services. Many lending institutions have tie-ups with loan aggregators to get more customers on board.
Many lenders also offer instant home loans to potential borrowers through their own websites.
For instance, you can apply online for home loans through websites of ICICI Bank, or Axis Bank. Some lenders like Indiabulls Housing Finance Ltd take it further and offer loan applications through a Facebook application called IB Easy.
You can even e-sign your documents, which quickens the process. Indiabulls reports that as much as 18% of its incremental home loan business is being sourced digitally.
