Planning For a Home Loan

• Evaluate expenses towards your other commitments and emergency funds. Borrow only in tune with your repayment capacity and avoid having a tough time making repayments for a huge home loan.
• Lenders offer newer and innovative repayment schemes that can suit your earning capacity and potential. Explore all such offers before choosing a scheme.
• Overages are the difference between the lowest available price that a Bank is willing to offer and any higher price that the home buyer agrees to pay for the loan. The brokers are often allowed to keep some or all of this difference as extra compensation. Negotiate hard to bite into this margin and clinch a better deal for yourself.
• Inexpensive loan products may have some hidden charges. Check twice.
• When selecting a lender, talk to a couple of borrowers from the same lender to know about their experience with the lender.
• There is a plethora of fees - Processing fee, administration fee, valuation fee, legal fee, etc. Many of these fees are negotiable. Get the best deal.
• Loan insurance, house holders policy and cover against accidents are offered by lenders themselves for a nominal premium. This can make home loans still more lucrative. Either the borrower pays a lump sum amount upfront towards the additional insurance cover or the premium is clubbed with the EMI dues. Borrowers are assured of great convenience in this mode. However, you can always select a different insurance company for your needs. Look around and verify if the lender is offering you the best deal.
• Banks have come out with numerous repayment options that are tailor-made to suit borrower's needs. Repayment options are plenty, so select the right option that suits your financial needs well. For instance, Step-up repayment facility allows borrowers to avail higher amount of loan and pay lower EMIs in the initial years. Subsequently, the repayment is accelerated proportionately with the assumed increase in income.
• Home Loan enhancement products available in the home loan market are home improvement loan, home equity loans, land loan, home extension loan, etc. You can obtain a loan for making modifications, additions and alterations to your house. This is called the home improvement loan. Home Equity Loan is the loan offered against the mortgage of property. Home equity loan is available only for self-occupied residential property.