It is normally said that shopping for a dream property needs massive expenditure for most of the investors. Some people today invest a long period of time, garnering their savings to fulfil this dream, although other individuals opt to take a loan (credit) to fulfill this dream.
Obtaining accomplished your self assessment about the repayment capacity, location of your dream home, amenities and other fancies that you would like your dream home to have. It is time for some critical exercising of selecting your HFC.
Picking a HFC calls for intense care and suitable consideration, and consequently following the beneath-pointed out pointer will make this exercising much easier. Past record of such institutions really should be effectively checked as it will be a extended term connection in between you and institution. Ensure that the complete job does not finish up becoming a entire day headache or nightmare for you, as a result prudent actions even though deciding upon the financer.
1. Rate of interest
This is exactly where it all starts. Although the rate of interest offered by most HFCs is far more or significantly less the same on paper, some degree of bargaining in most instances, leads to a lowering of rates by as significantly as .25 to .50 percentage points. A lot more so if your profile happens to match the requirement of the HFC. The lowering of interest rate has a important effect over the lengthy term while the difference is not so noticeable more than the near term. For instance, a .50% interest rate ‘concession’ on an Rs 1,000, 000 loans over 20-year tenure will minimize your liability by upto Rs 72,000. But care requirements to be taken to assure that the difference is not getting offset elsewhere by the HFC under the guise of other ‘charges’.
One particular must also be cautious about teaser rate present, as they are in some cases seriously teasing. They benefit you for a quick-term – say couple of years (till the fixed interest rate tenure), but later as floating rate starts applying they dig a bigger hole on your wallet.
two. Calculation of the exact residence loan amount
Here, HFCs differ in their calculation of the loan quantity to be disbursed. Some HFCs calculate the amount to be disbursed on the basis of, say, the gross salary whilst some HFCs calculate it on the net salary. This may possibly make a distinction to men and women as the loan amount and the EMI will differ across HFCs. 1 wants to appear into this and get a comparative evaluation done across HFCs, to realize which HFC gives the best deal. Also 1 really should verify no matter if the HFC is providing pre-EMI and tranche based EMI repayment choice. This will enable 1 whilst taking loan for an under building property, as this gives them an option to spend interest only on the portion of the loan disbursed or to choose the instalments they wish to spend, till the time the property is ready for possession.
3. Immediately after-sales service
And you thought just after-sales service was synonymous only with customer durables! No – it applies to practically every thing, and so also applies to HFCs. In reality, it is pretty crucial though deciding on an HFC. An HFC can differentiate itself with fantastic soon after sales. Take the example of post-dated cheques (PDCs). It is common practice to give 36 PDCs through the time the loan is disbursed. It is immediately after 36 months are more than that following-sales will play a part. How diligent are the HFC’s stick to-ups? Are they prompt? Are reminders timely? Additionally, during the economic year-end, the HFC need to be punctual in providing the borrower interest paid certificate (components of interest and principal amount paid in the economic year) so that he can file the required documents for availing tax rewards (beneath section 24b and 80C of the Earnings Tax Act) on dwelling loans.
4. National presence
The HFC ought to be present across the country or at least have branches in all key metros and towns. This delivers an individual an a lot easier accessibility. This assumes value if the present job of an person is of a transferable nature (e.g. bank job, defence personnel) or if he requirements to make long and frequent outstation visits (e.g. consultants, businessmen). The person shouldn’t be put via the hassle of couriering his cheques to the residence branch each and every time or contacting the house branch, each and every time he has a difficulty or a query. So it aids if the HFC is properly networked across the nation.
five. Prepayment / Foreclosure advantages
For lots of individuals, this plays a important part in their selection to go in for a unique HFC. For example, numerous salaried individuals know for a fact that their salaries would be revised just about every year. This indicates that they can pay a larger EMI going forward. Some of these men and women also know that they would be receiving a bonus, which they can utilise to spend off their home loan (either fully or partly). Some banks do not charge people for creating a prepayment / foreclosing their account. Obviously such HFCs should get preference more than other HFCs that do levy a prepayment charge.
six. Do your homework
Lots of persons have a tendency to invest in into ‘brands’ rather than going for what suits them ideal. It really is not about how major the brand is it is additional about irrespective of whether that brand suits your requirements and satisfies your criteria. Make a list of your requirements initial and then house in on an HFC. Talk to individuals who have currently taken a loan from a certain HFC and get their feedback.
Other variables like documentation, processing charges, document storage facilities and time taken for processing the loan need to also be deemed. For bridging loan broker , folks do not like it if the documentation is an irksome method or if the processing costs are exorbitant.
Apart from this, read all the terms and conditions meticulously and do not overlook to take an specialist advice. For that reason, alternatively of reading on the lucrative presents of the corporation, it is crucial to study and realize the technical elements of the delivers. So if you want to be in a win-win proposition whilst dealing with the Housing Finance Company, the onus is on reading the fine print in the loan document and seeing via the maze of thrilling gives.