All set to take on the most important and probably the biggest financial responsibility in your life?

Buying a home isn’t an easy task by any means, and involves taking on a new set of responsibilities, such as paying EMIs for several years; adjusting your monthly expenses to accommodate these EMIs, and ensuring that the payments are made on time each month.

Please note, home loans are something that must be taken only after careful and thorough financial planning. A home is considered a valuable asset and in most cases an appreciating one. To cater to all kinds of demands in the market, banking establishments and NBFCs have created different types of home loan products to meet everyone’s needs.

The home loan interest rate charged by these lenders is also very reasonable, thus enabling them to accommodate a wider market set. With the lending market flooded with all types of home loan options, it can get pretty confusing for borrowers to pick out the best offer for their needs. Here in this article, we will share some important tips to help you locate the best home loan offers with the lowest interest rates in India.

Tips for Finding Best Home Loan offers

Employment stability

It’s normal for lenders to prefer home loan applicants who have a regular source of income and stable employment. This directly translates into financial stability and hence gives lenders the confidence of extending credit to the borrower at a lower interest rate. Please note, as is the case with other eligibility factors, you will need to back up your income claim with proper documentation.

Down payment

The general rule in the house loan market place is that the borrower must make a minimum 20% deposit to get offered the best home loan interest rate by the lender. Therefore, if you can afford to make only 10% of the purchase price as the down payment, the home loan interest rate offered to you might not be as appealing. This is simply because a lower down payment equates to a higher risk for the lender.

Credit score

The home loan deal you’re offered by the lenders will also depend greatly on the health of your credit score. In fact, this can prove to be a deal-breaker if it’s not good enough. The higher is your credit score, the lower will be the interest rate charged by the lender on the home loan. In most cases, a credit score of 750 or higher can significantly improve your chances of getting a good interest rate on the home loan offer, as well as attractive terms.

Debt to income ratio

Debt to income ratio is another critical factor in the approval of housing loan applications and also in the calculation of the interest rate charged on the loan. This ratio simply translates into your total current debt (credit card outstanding, loans, etc.), against your total current income. Hence, if you’re serious about availing the best home loan interest rate, you should try lowering your debt to income ratio. And the best way to go about it is making larger payments against your existing loans and clearing your credit card bills, before submitting the home loan application.

Negotiate

There is no shame in negotiating the offered home loan interest rate if it can bring down your monthly EMIs considerably. In fact, you’d be surprised to know how much scope there is for such haggling. In case the lender doesn’t budge on the interest rate, you can always negotiate for better terms, for instance, no prepayment penalty, minimum late fees, etc. Please note, the higher your credit score is, the better will be your chances of negotiating a good deal.

Lastly, you should never undermine the importance of comparing different loan offers when it comes to availing the best home loan interest rate. And the ideal way to go about it is through GoSahi.com.