As we all know that right now is the best time to purchase a house, as the whole world has been hit by an outbreak of Coronavirus and in the unavailability of vaccine yet, every person has realized the value of having your own home. Besides that, the economic conditions are also very favorable as developers are offering different schemes and interest rates on the best home loan Is also affordable.
There may not have been a more perfect period to take out the best home loan deal, with rates now approaching a low of 15 years. Currently, most major banks in India offer housing loans at an interest rate below 7 percent per annum. If borrowers show due diligence, they will be able to make the most of a product with a loan.
We at SBP Group aims to provide every person their dream home. For this we have led down some points which will help you in getting the best home loan deal:
Choose for a home loan with a fixed interest rate
As you may know that there are two types of interest rates:
• Fixed-rate of interest: The rate of interest remains constant for the whole loan period. As the rate stays constant, there will not be an adjustment in interest payments. Depending on the bid, after serving a certain period of the loan term, you will be able to turn to the floating rate scheme.
• Fluctuating rate of interest: Interest payments on your loan are subject to the bank’s latest peak lending rates. The rate is related to the bank’s current published rate, which largely influences on multiple factors such as the monetary policy of RBI and revisions of the lending rate, the reaction of the bank to the revision, etc.
Although the fixed interest rate has its drawbacks, opting for it in the current conditions would be a financially prudent decision. This may be an optimal option despite the fact that these loans are priced higher than floating interest rate home loans, provided that prices are expected to rise as normalcy returns, making floating loans more costly.
Notice here that, as stated in the loan agreement, fixed-rate loans are guaranteed for a certain duration only. It will be the choice of the bank to charge interest as prevailing in the market at last.
Creating an excellent credit score:
Since banks put tremendous focus on the risk profile of borrowers, by giving them lower interest rates, they may also facilitate those with a good credit score. Homebuyers have a chance to boost their credit score at a time when loan default rates are expected to increase, in the middle of the Coronavirus pandemic. By preventing late payments of debts, this may be achieved.
Buyers who are capable to pay off their debts without opting for the moratorium schemes introduced by the banks (to boost the economy & banking) should also not apply for such schemes. It will help in improving your credit score. Another method to have a good credit score is by picking a longer tenor for repayment when you borrow a mortgage. This will guarantee that your EMI is small, so you can make payments on time.
Your credit score will increase when you don’t default, pause, or miss paying EMIs.
Approaching a bank or a reputable Housing finance company:
Before the recession broke out, non-banking housing finance firms may have become a borrower’s go-to alternative for loans, revealing the lenders’ problems in this section. Though it is recommended that you should contact banks or housing finance companies to satisfy their existing funding needs.
Many developers have some schemes with particular banks offering the best home loan, so you should also check that. It is also advised not to take multiple loans as it affects your credit score and it can be difficult to pay more EMIs on regular basis with multiple loans.
Resist the inclusion of a co-borrower:
In order to make use of a higher home loan sum, banks will almost always tell you to take a joint home loan. This may be a monetary blunder, in the middle of the COVID-19 recession at a moment when job stability is unclear.
There are two theories for stopping a co-borrower. Firstly, there should be no need to raise the amount of the loan more than required. Any debt is a responsibility and, regardless of the conditions, you will be expected to repay every rupee in the future. Just because the bank claims you are worthy for a loan of, say, Rs 1 crore, it doesn’t mean that even though you could do with just Rs 70 lakhs, you can take that amount of loan.
Secondly, the co-borrower may become similarly liable for the repayment of the loan by adding a mutual claimant. It would be in the best interest, of these unpredictable days, not to include other family members in financing deals.
Consider different rates of interest:
Always consider the rate of interest of different banks before taking any loan. It may seem like every bank is offering the same loan but the working of every bank is different and it affects the time period of repayment of the loan. There are various factors that determine the calculation of interest rate such as the income of the person, location of the property, type of loan, loan tenure, employment type, the credit score of borrowers, etc.
If you take into account all these points you can get the best home loan deal for sure. Besides that, you also need the best home, as well that SBP Group can provide you with that. We are the No.1 housing company in Punjab offering 2/3 BHK premium flats near Chandigarh – Mohali, Zirakpur, and Derabassi. With the trust of more than 8500+ families, we have been able to provide the best quality homes with top-notch facilities at pocket-friendly prices.
For any more information on our various projects, you can search at our website and social media platforms.