How to go about choosing Best Home Loans in India?

For most people, buying a home can be perceived as a complicated process in and of itself. But time and again it has been proved that, if things are taken one step at a time and you know how to select a best home loan, it won't be long that you will be holding the keys to your new house.

To get the best home loan you need to be aware of a few facts such as the amount of loan that you can afford. To start with, whatever you can afford is directly dependent upon your monthly expense, income, credit rating, interest rates and down payment. Small calculators can be of utmost help, but the most prudent thing to do is visiting a lender to find out the real figures.

Shopping around for a loan is the right thing to do as it not only saves a considerable amount of money but also educate you about the malicious and dubious ways that are at play. Hence, one must always consult more than one vendor, compare interest rates and costs, and thus negotiate a better deal. Having a list of the features that you are looking for in a home makes your job a lot easier. As it becomes easier to communicate while comparing homes and saves you a lot of time.

Always insist on a home inspection, as it will tell you the condition of the house and thereby help you in avoid purchasing a home that is in need of major repairs.

Also you must be aware of a few terms that are commonly used while transacting in home loans such as:

Rate of Interest

EMI (Equitable Monthly Installments)

Monthly reducing balance

Annual reducing balance

Fixed rate of interest

Prepayment penalties

Processing charges

Commitment fee

Miscellaneous cost

Apart from getting a fresh loan for a house, one can also take a loan against property. There are various advantages of opting for a loan against property. For starters, a loan against property is cheaper than a personal loan. The reason being, the former has collateral attach to it in case of a default. The tenure of such loans is longer than that of a personal loan. The tenure for such loans is for a maximum period of 10 years. As the rate of interest on these kinds of loans is lower, the EMI also is considerably cheaper than that of a personal loan. As LAP is a secured loan hence it entails lesser documentation and relatively faster approvals. Usually such loans are taken for expanding an existing business, funding medical treatments, funding your dream vacation, funding your child's higher studies or getting them married. Hence, an LAP can be categorized as a secured multi-purpose loan that has a large tenure with a competitive rate of interest.