Looking to secure a home loan to finance your dream place? Don’t go ahead without reading these smart tips that help you get the best rates on your home loan. Check out the top five tips in this handy guide.
Buying a home is all about taking the right decisions. It includes finding the ideal location, the best property seller, choosing the right type of residence and so on. However, the decisions you take don’t end here.
You need to find the right home loan provider too. With more that 100+ loan vendors in the market, how do you determine who is the best one for your requirements? With so many different options available to the borrowers, you can easily negotiate interest rates with banks.
Ever wonder why two people are offered two different home loan interest rates at the same bank? Well, several factors determine the final rate of interest and negotiation plays a major part in it.
Here are some tips and tricks to help you gain the upper hand when negotiating your home loan interest.
- Information is Valuable
The first and foremost step you have to take before applying for a home loan is to check out the interest rates provided by the various lenders in your area. Check both fixed as well as variable home loan rates. Also, check out the eligibility criteria and other relative information from know loan agents.
This gives you a clear picture of the prevailing rates. Also, it will prevent you from being misled by lenders who use complicated technical jargons just to lure and bewilder customers.
Having all the information in your hand gives you the upper hand when you begin negotiation.
- A Decent Credit Score
This one goes without saying. A good CIBIL score gives you the upper hand when you negotiate. You can negotiate not only the interest rate but also other charges like the transaction fee, pre-payment penalty, and processing fee.
This is because most banks consider borrowers with a fair credit rating aren’t likely to default. If you have a salaried account or credit card at the bank you’re applying; you can claim further discounts by stating these products.
- Proper Documentation
Documentation plays a vital part in securing home loans. So, make sure to check out beforehand all the required documents and have them in order. This gives the bank more confidence on you and helps you in securing the loan quicker and at a lower rate.
Be honest about existing loans, credit card debts and your repayment history. This enhances your credibility as most banks check all these details with the credit bureau before approving your loan.
- Approach the Bank only after you have finalized the Property
Another important tip is to contact the bank for a home loan only after you have decided on the property. Most banks are interested only in immediate disbursements and are likely to provide you with a better rate.
- Timing is Key
You must time your loan in such a way that banks give you better rates. The month ends, fiscal quarter closings are ideal. This is because banks have a fixed sales target and staffs are likely to offer competitive prices to meet their goals.
The festive season is another ideal time to avail a loan as banks are likely to provide lowered interest rates and reduced charges to promote sales during this period.
Availing a home loan is easier now than ever before. With more and more banks, trying to shorten and simplify the process, don’t make the mistake of signing up with the first provider you come across. Do your research and negotiate using the tips mentioned above to get better rates.