A good home loan is available for anyone with a credit score of at least 750. Many people, however, do not meet this credit score requirement. To avoid a noose around your neck, there are some questions you should ask yourself first. What is your financial status? What kind of home loan do you want? Here are five tips for getting the best home loan:
Make sure you shop around to find the best interest rate. Remember that bad credit doesn’t always mean low interest rates, so don’t settle for the worst rate. You should also research the lender through the Better Business Bureau and customer review sites. Some lenders specialize in bad credit loans, so do your research before deciding on one. Never borrow money from a company you don’t feel comfortable with. It can lead to more complications than necessary.
Another way to get the best home loan rate is to add an earning woman as a co-applicant. Women can enjoy a 0.5% interest rate concession from SBI when applying for a home loan. If the applicant has a good repayment record, the lender may waive up to 12 EMIs. LIC HFL also has a low processing fee of only 0.25% and a minimum amount of 10,000. LIC HFL has an extensive nationwide network of 5,430 branches and offers up to 90% of the value of your property as a home loan.
Your loan amount can also influence the interest rate. For instance, a home loan of less than Rs. 30 lakh usually has a lower rate than one of the same amount if you borrow Rs. 30 lakh. The higher your loan amount, the higher the interest rate will be. Also, make sure to choose the lowest interest rate that you can find. When you are looking for a home loan, remember to consider your down payment. A higher down payment can reduce the overall loan burden, and may help you get the best home loan rate.
Income and employment are two of the most important factors lenders consider when considering your application. Government employees with stable incomes often have lower interest rates than the general public. If you are a veteran or an active military member, VA loans are your best bet. Additionally, USDA loans are great for low-income, rural buyers, or people who can’t qualify for conventional loans. You’ll also want to consider mortgage terms, which include the length of repayment and the interest rate. For example, a fixed-rate loan has a low interest rate for a certain period of time, while an adjustable-rate loan has a high interest rate for an indefinite period.
Banks usually charge different fees and don’t always disclose them upfront. They also may have different names for the same charges. As an added bonus, you should also be aware of the charges that can add up to more than half of the total loan amount. Some lenders will waive these fees, so it’s important to understand what each fee means. If you want the best home loan, be aware of all the costs, fees, and hidden fees.