Here’s how to Find the Right Mortgage Loan for Yourself
Most property owners prefer a mortgage or a loan against property (LAP) as the loan amount can be used for personal or business intents. A mortgage loan is a long-term commitment. These loans can segment the principal amount into small EMIs that can be repaid during a long tenure of 15 years. The amount of loan offered can go up to Rs. 5 crores with reputed lending institutions.
The lender does not put conditions on the end-use of the credit. Individuals can use the loan amount at their convenience, whether it is for higher education abroad, home renovation, business expansion, a wedding, medical emergencies, or consolidation of high-interest debts. The borrower keeps enjoying the title of the property. Mortgage loans in India are long-term loans that can segment the principal into small EMIs to be paid during a long tenure of 15 years. Lending institutions consider various aspects before offering mortgage loan interest rates, like the type of property. Let us help you find the right mortgage loan for yourself.
Improve your credit history
Before you apply for a mortgage loan, give your credit standing a checkup and improve your score if needed. The lending institutions require a specific credit score to approve an individual for a mortgage. A credit score of 750+ can make lenders offer a lower interest rate mortgage.
Access your credit report and ensure that your credit score is accurate with the correct information in your credit report. There should be no errors that can impact your score adversely. If you spot any error, request to rectify it as soon as possible and improve your credit score.
If you have a low credit score, you need to work on improving it. Clear credit card bills on time. Lower your debt to improve your debt-to-income ratio (DTI), which should ideally be under 36%.
Know the mortgage loan fees
The mortgage loan application may have processing fees. It includes an application fee, processing fee, origination fee, and underwriting fee. There can be a documentation fee, title search, insurance fee, and others for mortgage loan processing. It is a good idea to look at such fees when you decide to choose a particular lender. You should ask if there are other mortgage loan fees levied by the lender.
Determine your budget
To know what you can afford to repay each month, factor in expenses like monthly EMIs, utilities, gas, daycare, insurance, groceries, and other financial commitments. Look at your net income to calculate how much you can bear on a mortgage loan repayment.
Compare interest rates with multiple lenders
Deciding for a mortgage loan with the first lender you find is not the best idea. Consider interest rates with different lenders. Although mortgage interest rates offered to individuals depend on various factors, like the location of your property, type – residential or commercial, age of the property, loan amount required, loan tenure, and others, renowned lending institutions can offer the best deal on interest rates (9%-24%) and loan terms. If you do not shop around, you may have to leave a significant amount of interest on the lender’s table.
Flexibility in choosing the length of repayment
Look for a lender with flexible mortgage loans in India. Lenders have options of varying tenure and charge interest. Generally, mortgage loans are long-term loans with a tenure of 10 to 30 years. If you can afford a higher EMI and want to close your loan account sooner, you can apply for a shorter-term mortgage. Opting for a shorter mortgage means higher monthly payments.
Look at the lender’s Reputation.
Research before you choose the lending institution. It involves a background check of the lender. If possible, you can procure the contact details of their past clients and approach some of them. This initial research will help you avoid hassles later. Most information on lending institutions and their financial products is available on their official websites. You can read the review of consumers who have previously availed of mortgage loans from the lending institution.
Thus, customized mortgage loans are available for individuals looking for a significant amount to meet their financial requirements and achieve goals that demand a high loan amount. Utilize your property to get a secured mortgage loan from renowned lending institutions.
