Getting The Most Out Of Your Home Loan
As the festive season approaches its peak, you know that banks are about to give their best home loan deals of the season. And if you are looking to buy a new home this season, then maybe you are in for a treat. But the problem is that there are too many options to choose from, which makes it hard to know which one is the best option for you.
But luckily there are specific factors that you can consider while applying for a home loan. All you have to do is to check these factors and make sure that the bank that you have chosen is providing you with all of these factors in the best way possible.
- The interest rates
The interest rate of the loan is one of the most critical factors that you should take into consideration while choosing the right bank for yourself. And due to India’s new policies, every fixed or floating loan (including home loans) requires you to link their interest rates with the bank’s marginal cost of funds based on lending rates. So, because of this, every new home loan customer will have to pay the interest rates as per every bank’s MCLR. So, make sure that the MCLR of your preferred bank is low as well as favorable for you.
Do not ignore any MCLR loan’s markup
Banks are not allowed to charge anything below MCLR rates, but they can add the markup, margin or spread over it to increase the interest rates. So, you should not just consider the MCLR while applying for a home loan. But instead, you should also concentrate on the effective home loan rate, which can include the markup as well. So, if the MCLR is at 8.25%, the deciding factor for choosing the right bank should be by their markup. So, if one bank charges 0.25% and the other charges 0.40%, you should go with the former option.
Keep an eye on the markup rates
The markup of one type of loan, say the house loan, will always remain the same for all existing customers. So, if you buy a home loan from a bank, then everyone else, who attained the loan alongside you, were also charged the same markup rate. But banks hold the right to change the markup rate at any time. In fact, they use certain factors, like the competition rate and intent to garner more customers or share, to justify this change in rates. These rates can both go up or down. So while you are applying to a bank, make sure you are aware of the latest markup rate changes. But once you have taken a loan and the markup changes afterward, it will not affect your loan markup costs at all.
Added costs and miscellaneous charges
Different banks find different ways to cover their costs if their guidelines seem to be too good to be true. Some banks may give you incredibly low-interest rates tied up with a large repayment type. But it is possible that they might have incredibly high penalty fees or maybe extra charges for paying your loan back early. A few banks might have schemes that seem to be easy to follow, but once you’re inside them, they might make you drain all of your money for years. The smartest thing that you can do is to get an expert opinion that can help you find the best option for you.
All of these above-mentioned points will help you go through your options in detail. And finally, they will help you decide which bank is the right bank for you to get a home loan.
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