Are you planning to buy a property? A simple search for a mortgage lender will provide hundreds of results. Choosing the best one among them is challenging. Not only do you need to figure out the best for you, but you also need to analyze and compare the different offers. The right guidance runs a long way to contributing to a clear understanding and, hence, making the right decision. So, let’s begin!
Understanding Mortgage
A mortgage, also known as a mortgage loan, is defined as the agreement between the lender and borrower. The terms of the agreement include the principal amount, rate of interest, and time. The borrower will take the money from the lender to be repaid in installments. The terms of the agreement define the method of repayment. When the complete money is returned to the lender, including interest in a given period, the mortgage is said to be paid off.
Factors to Consider When Choosing a Mortgage Lender
The important factors to be examined when choosing a mortgage lender include the following:
Interest Rates
It is the most important and prime factor that should be considered. It determines the total expenditure from your side and the term of the mortgage. Several factors can help decrease home loan rates, such as credit score, income, choosing the adjustable rate mortgage, negotiation, and so on. Ensure usage of the home loan calculator to remain aware of the monthly installments and overall spending you will do in a decided amount of time.
Eligibility Criteria
The eligibility criteria and required documents vary among the lenders. Ensure you meet the requirements and possess all the documents for a seamless process.
Reputation
Choosing a reputed mortgage lender promises reliability to some extent. The positively reputed lenders generally have good customer reviews and strong records. They will also believe in keeping transparency and customer satisfaction at the top.
Clarity
The mortgage lender offers clarity over all the issues and queries, along with information about the mortgage to be rightly preferred. They must indicate the terms and conditions associated with the mortgage, including the availability of products, associated and hidden costs and penalties.
Customer Service
You will be paying the lender for the borrowed amount and all the services you avail. Excellent customer service and instant resolution of the problems is your right. Not only should they be your guide throughout the process but also after availing the services and during your repayment journey with the bank too.
Additional Services
Many look forward to gaining additional benefits or services apart from the basic and compulsive ones. Choosing a lender that offers such benefits is a recommended one. However, ensure they maintain clarity in every aspect. Also, never go for too good-to-be-true deals.
Fees and Closing Costs
Though the costs are generally known, they are for broad aspects and obvious costs. Some multiple hidden costs or penalties arise on need. A prior knowledge of them from each of your chosen lenders can act as a deal breaker. Have thorough information on all types of costs and penalties that will be charged to you. Common examples of such fees are prepayment costs, stamp charges, documentation charges, and others. Use a home loan calculator to estimate the spending expected from you during the journey of a loan.
Local Knowledge and Expertise
Generally, it is the ignored part of the choosing criteria, but it is of utmost importance to the borrower. Ensure the lender has knowledge and expertise of the local market, zoning regulations, and other factors. Understanding the borrower’s situation and providing customized suggestions is another preferable deal expected from a lender.
Pre Approval
Availability of this facility requires prior planning and good assessment of one’s needs. If you need a pre-approval, searching for a lender with this option is essential. Multiple organizations offer pre-approved loans to borrowers.
Wrapping Up!
Mortgage or home loan rates are the key factors deciding the overall burden of taking a loan. Besides, choosing the right lender is equally crucial to avail the maximum benefits of the home loan. Be wise to compare and research the lenders thoroughly, along with their offerings, to make the right decision. Make sure to consider all the above-listed points for full help in your decision. Finally, use the home loan calculator for proper and complete estimation, which is essential for financial planning.
FAQs
Q1. Enlist some mortgage lenders in India.
The top housing finance companies in India are HDFC, PNB, LIC, IIFL, Tata Capital and others.
Q2. What are the eligibility criteria to get a mortgage?
You are eligible for a mortgage in India if you are a documented national of India, are aged between 25 and 85 years, and have a stable source of income. The accurate eligibility requirements depend on the lenders.
Q3. How can I apply for a mortgage?
You can apply for a mortgage both online and offline. For further procedure, contact the chosen lender.
