How To Choose The Right Home Loan: Tips For First-Time Buyers

Learn about the various aspects to consider while applying for a home loan.
<div class="paragraphs"><p>Source: Freepik</p></div>
Source: Freepik

Taking a home loan is a crucial decision, as it is a long-term financial commitment that may be spread over a time span of 15-20 years. Even a minor misstep in a home loan can cost you money and your peace of mind. 

So, if you are a first-time home buyer and plan to avail a home loan to buy the house, choosing the right home loan from the clutter is a strategic decision. Here are a few aspects you must consider while applying for a home loan. Read on to know how to choose the right home loan for yourself.

#1 Credibility Of The Home Loan Provider

With so many players in the market offering different home loan offers, it can get difficult to choose the right home loan offer. Many of the home loan providers may approach you with promises of a higher loan amount. However, they may end up decreasing the loan amount during approval. Hence, it is better to calculate your home loan eligibility before you commit to a lender to ensure that there is no likelihood of a sudden decrease in the loan amount from the lender during approval. It is always advised to choose credible lenders like reputed banks, that are transparent at every stage.

#2 Type Of Home Loan Interest Rate

Home loan interest rates are of two types- floating and fixed. A ‘floating’ interest rate in home loans is one which can vary from time to time during the loan tenure, while a ‘fixed’ home loan interest rate remains constant throughout the loan duration. When you choose the right home loan offer, you must choose the type of interest rate for your home loan based on the market conditions i.e. if the interest rates are expected to increase or decrease.

It is also prudent to use home loan emi calculator which helps you figure out your monthly loan payment, or EMI, for your mortgage

#3 Hidden Charges

Do not rush to settle for a home loan with lowest interest rate. You must study all the terms and conditions of the loan before applying for a home loan. While offering a small discount on the home loan interest rate, the lender may impose certain hidden charges or may not provide the right service later.

#4 Loan Amount

Availing a home loan means you will have to pay monthly instalments or EMIs over a long duration to settle the loan. Hence, you must choose your home loan amount after considering your current repayment capacity and also factoring in any possible future expenditures.

With increasing competition in the home loan market, banks and other loan providers leave no stone unturned to attract you with lucrative loan offers. So, make sure that you choose a credible and reputed lender to ensure your peace of mind not only while availing the loan but also during the home loan tenure. Here are 6 points to remember before applying for a home loan.

Also Read: What’s The Maximum Home Loan EMI That You Can Afford?


Aishwarya Rajgopal is a management graduate and a profe...more
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