How to Compare and Choose Home Loans in India
The stepping stone of availing a home loan is to start comparing home loans provided by different banks on the basis of interest rate. We do so as we think that interest rate is the only criteria to compare the home loan. However, we need to stop just for a while and think again! Blog: https://financebuddha.com/blog/how-to-compare-and-choose-home-loans-in-india
The stepping stone of availing a home loan is to start comparing home loans provided by different banks on the basis of interest rate. We do so as we think that interest rate is the only criteria to compare the home loan. However, we need to stop just for a while and think again!
Blog: https://financebuddha.com/blog/how-to-compare-and-choose-home-loans-in-india
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the loan amount. So, if you are compar<strong>in</strong>g home loan don’t forget <strong>to</strong> consider<br />
this fac<strong>to</strong>r.<br />
3. Pre-closure Charges<br />
<strong>Home</strong> loan is generally a long tenure loan <strong>and</strong> pay<strong>in</strong>g it for long-term can cost<br />
much. One has a big amount <strong>in</strong> the terms of <strong>in</strong>terest payment. So many<br />
borrowers want <strong>to</strong> pre-close their home loan <strong>to</strong> save on it. But, some banks<br />
charge some amount <strong>to</strong> pre-close the loan. Hence, if you are go<strong>in</strong>g for a home<br />
loan it is important <strong>to</strong> check with your provider whether they charge for the preclosure<br />
or not. A pre closure charge is generally not applicable for a float<strong>in</strong>g<br />
<strong>in</strong>terest rate home loans.<br />
4. Insurance Cover for your <strong>Home</strong> Loan<br />
Insurance cover for your home loan is an essential th<strong>in</strong>g. This covers your home<br />
<strong>and</strong> makes you tension free for the repayments when you are not there. You<br />
need <strong>to</strong> choose it as per your requirements. Some banks may provide this<br />
<strong>in</strong>surance along with your home loan <strong>and</strong> add the cost <strong>to</strong> the EMI. If you go for<br />
it separately you may get a choice about but it may cost you more. Hence, it<br />
becomes important <strong>to</strong> check <strong>to</strong> check with your home loan provider, whether<br />
they are prov<strong>in</strong>g the <strong>in</strong>surance for your loan or not.<br />
5. Loan <strong>to</strong> value (LTV) ratio<br />
Loan <strong>to</strong> value ratio is the proportion of your property value that bank will<br />
f<strong>in</strong>ance through the home loan. The rema<strong>in</strong><strong>in</strong>g amount is known as down<br />
payment. One need <strong>to</strong> f<strong>in</strong>ance the down payment from their own pocket. As per<br />
guidel<strong>in</strong>es of RBI, banks can f<strong>in</strong>ance up <strong>to</strong> 90% of the property value as a home<br />
loan. But generally, LTV ratio varies from bank <strong>to</strong> bank <strong>and</strong> can go up <strong>to</strong> 80%<br />
<strong>and</strong> 75% respectively.<br />
Above aspects will help you <strong>to</strong> compare home loans <strong>in</strong> a better way! Check!<br />
<strong>Compare</strong>! Analyse! And then decide.
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