New Delhi | Jagran brand office: As the holiday season approaches, financial institutions in India are gearing up to offer the best deals on credit products including home loans. Online searches for residential properties hit an all-time high in September 2021, according to a recent study.
This is the best time for individuals to take advantage of offers like waiver of processing fees, affordable home loan interest rate, etc. However, whether it is the holiday season or not, individuals can still win the most competitive. mortgage interest rate by following a few simple steps.
How to get the best interest rate for a home loan
Almost all financial institutions offer home loans to eligible applicants. Since these offers vary among lenders, it is essential that borrowers compare different lenders to ensure they are getting the best interest rates. They can also use a home loan EMI calculator to help with this process.
Here are some simple tips to follow and get a mortgage at the best interest rate.
Choose the type of interest carefully
While availing a loan, individuals can choose between floating and fixed interest rates. While a floating interest rate continues to change according to market situations, the fixed interest rates remain the same throughout the term.
It is necessary that borrowers choose an interest rate after careful research as it affects them throughout the life of the loan. Plus, each has their own pros and cons, forcing borrowers to understand what they are opting for. For example, fixed interest rates help with accurate financial planning. On the other hand, a floating interest rate is suitable if there is a possibility that this rate will fall in the future.
Maintain a high credit rating
Before sanctioning a mortgage loan, lenders check the credit score of applicants to assess their credit behavior. A credit score of around 750 is considered sufficient to qualify for most financial products, including a home loan. It also helps borrowers get the best mortgage rates available in the market.
If you have a low credit rating, you should keep in mind the tips below to improve your credit rating.
– Don’t miss EMI payments
– Limit multiple inquiries
– Avoid opting for too many loans or credit cards at once
– Try to have at least one loan history
– Keep a good mix of different types of loans
– A high credit score also helps in getting the best service on an availed home loan.
Meet the eligibility criteria specific to lenders
Since lenders set an interest rate for home loans based on the eligibility of the applicant, it is essential that individuals meet the specific lender eligibility. Typically, it includes the following:
– Applicants must be resident citizens of India
– The age must be between 23 and 62 years old
– The salaried candidates must have a professional experience of at least 3 years
– Self-employed workers must have at least 5 years of seniority
At the same time, they should also know the list of documents that they need for a home loan. However, a point to remember here is that the eligibility parameters and documentation are specific to the lender, so refer to a financier before applying.
Improve monthly income
The monthly income of applicants largely indicates their repayment capacity. So, if they want to get the best interest rate for a home loan, they must meet the income criteria set by a lender.
However, it also forces them to maintain a lower debt-to-income ratio, preferably less than 50-80% for reasonable interest rates on home loans. Moreover, they can also add other sources of income to increase eligibility resulting in lower interest rate.
Choose the tenor carefully
A home loan accompanies a long period which allows individuals to repay this credit with ease. Choosing the right grade is crucial to ensure affordability on a monthly basis. If the length of time is too short, it may be difficult to pay for your IME each month. On the other hand, if the term is too long, you end up paying very high interest.
Apart from this, borrowers can aim to get the best interest rate for a home loan in the following ways:
Opt for a mortgage balance transfer
Lenders often offer better rates to eligible existing borrowers. So, if you have a smooth repayment history and are in the initial phase of repaying that loan, then a home loan balance transfer can prove to be beneficial. However, you should also know the balance transfer fee up front.
Existing borrowers are also eligible for pre-approved offers. Selected HFCs extend pre-approved offerings that simplify and speed up loan processing. Besides home loans, these are also available on a host of financial products, including home loans. Enter your name and phone number to verify your pre-approved offer online.
So, while the holiday season facilitates the use of affordable home loan interest rates, individuals can follow these tips to get the same, regardless of the market conditions.
(Note: this article was written by Brand Desk)
Posted by:
Talibuddin Khan