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It is normally mentioned that getting a dream household demands enormous expenditure for most of the investors. Some people invest a extended period of time, garnering their savings to fulfil this dream, whilst other people opt to take a loan (credit) to fulfill this dream.
Possessing accomplished your self assessment about the repayment capacity, location of your dream household, amenities and other fancies that you would like your dream home to have. It is time for some really serious physical exercise of choosing your HFC.
Choosing a HFC demands extreme care and correct consideration, and for that reason following the below-mentioned pointer will make this physical exercise simpler. Past record of such institutions must be properly checked as it will be a extended term connection between you and institution. Ensure that the whole task does not finish up becoming a complete day headache or nightmare for you, thus prudent methods when deciding upon the financer.
1. Rate of interest
This is where it all begins. Although the price of interest provided by most HFCs is additional or much less the identical on paper, some degree of bargaining in most circumstances, leads to a lowering of rates by as substantially as .25 to .50 percentage points. More so if your profile takes place to match the requirement of the HFC. The lowering of interest price has a considerable influence more than the long term though the distinction is not so noticeable over the near term. For instance, a .50% interest price ‘concession’ on an Rs 1,000, 000 loans more than 20-year tenure will lessen your liability by upto Rs 72,000. But care requires to be taken to make sure that the distinction is not becoming offset elsewhere by the HFC below the guise of other ‘charges’.
One must also be careful about teaser price offer you, as they are in some cases seriously teasing. They advantage you for a short-term – say couple of years (till the fixed interest rate tenure), but later as floating rate starts applying they dig a larger hole on your wallet.
2. Calculation of the precise residence loan amount
Here, HFCs differ in their calculation of the loan amount to be disbursed. Some HFCs calculate the quantity to be disbursed on the basis of, say, the gross salary while some HFCs calculate it on the net salary. This may possibly make a distinction to individuals as the loan quantity and the EMI will vary across HFCs. One needs to look into this and get a comparative analysis accomplished across HFCs, to realize which HFC provides the finest deal. Also one particular should check whether the HFC is supplying pre-EMI and tranche based EMI repayment option. This will assistance 1 whilst taking loan for an below construction home, as this gives them an option to spend interest only on the portion of the loan disbursed or to pick out the instalments they wish to pay, till the time the house is prepared for possession.
3. Just after-sales service
And you thought immediately after-sales service was synonymous only with consumer durables! No – it applies to practically everything, and so also applies to HFCs. In fact, it is really critical while choosing an HFC. An HFC can differentiate itself with great immediately after sales. Take the example of post-dated cheques (PDCs). Macropay Scam is common practice to give 36 PDCs through the time the loan is disbursed. It is just after 36 months are over that just after-sales will play a role. How diligent are the HFC’s comply with-ups? Are they prompt? Are reminders timely? In addition, throughout the financial year-finish, the HFC need to be punctual in giving the borrower interest paid certificate (elements of interest and principal amount paid in the financial year) so that he can file the vital documents for availing tax advantages (beneath section 24b and 80C of the Earnings Tax Act) on house loans.
4. National presence
The HFC should be present across the country or at least have branches in all big metros and towns. This gives an individual an easier accessibility. This assumes significance if the existing job of an person is of a transferable nature (e.g. bank job, defence personnel) or if he wants to make long and frequent outstation visits (e.g. consultants, businessmen). The individual shouldn’t be put by way of the hassle of couriering his cheques to the residence branch just about every time or contacting the property branch, each and every time he has a difficulty or a query. So it helps if the HFC is effectively networked across the nation.
5. Prepayment / Foreclosure added benefits
For a lot of people, this plays a important part in their decision to go in for a unique HFC. For instance, quite a few salaried individuals know for a reality that their salaries would be revised each and every year. This indicates that they can pay a larger EMI going forward. Some of these individuals also know that they would be getting a bonus, which they can utilise to pay off their property loan (either fully or partly). Some banks do not charge folks for creating a prepayment / foreclosing their account. Definitely such HFCs should really get preference more than other HFCs that do levy a prepayment charge.
6. Do your homework
Lots of people today have a tendency to purchase into ‘brands’ rather than going for what suits them ideal. It’s not about how significant the brand is it is additional about no matter if that brand suits your specifications and satisfies your criteria. Make a list of your needs very first and then household in on an HFC. Talk to persons who have currently taken a loan from a particular HFC and get their feedback.
Other components like documentation, processing costs, document storage facilities and time taken for processing the loan really should also be thought of. For instance, folks do not like it if the documentation is an irksome procedure or if the processing charges are exorbitant.
Apart from this, read all the terms and situations meticulously and do not neglect to take an specialist assistance. Consequently, alternatively of reading on the profitable gives of the corporation, it is essential to read and have an understanding of the technical aspects of the gives. So if you want to be in a win-win proposition while dealing with the Housing Finance Business, the onus is on reading the fine print in the loan document and seeing through the maze of thrilling delivers.
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