Festive times are always considered auspicious for buying a piece of property. There can’t be a better time to buy that dream home than this, when apart from being the most auspicious time of the year, houses are available at rock-bottom prices, RERA is in place, CLSS subsidy is still there and there are also numerous offers by builders. To make the deals more attractive, some banks and housing finance companies in tie-up with builders have come out with their own set of offers.
Before you take that loan, bear in mind these points!
Many lenders as well as builders try to lure customers during festive times by providing freebies such as zero down payment, discounted prices and instant possession of house, apart from free gold coins on availing home loans through them, etc. Usually such offers are good and should be availed. However, “before blindly giving in, read the terms and conditions and analyse if the offers are suitable as per your financial requirement. Just availing these offers because they are available does not make sense, as you won’t be able to take full advantage of the specific benefits aimed at particular segment of borrowers,” says Naveen Kukreja, CEO & Co-founder, .
2. CHOOSE THE RIGHT LENDER
In a bid to lower their monthly home loan EMIs, many homebuyers prefer lenders offering higher repayment tenures. Citing this preference, most lenders primarily include a higher minimum loan tenure of usually around 15 years, while offering special home loan schemes, along with other secondary offers such as EMI waiver or flexible repayments. Some lenders, on the other hand, give loans for up to 30 years. These schemes are aimed at making customers stay with the lender for a longer period.
However, since longer repayment tenures imply higher interest payout, borrowers must make sure they compare lenders not just on the basis of interest rate and processing fee, but also keep in mind the prepayment, foreclosure charges levied, among others, as a higher prepayment fee would defeat the purpose behind prepaying of the home loan, that is saving on the total interest cost.
Also, some lenders – like private ones – usually disburse the loans fast, while some lenders take a longer time in disbursing the loan amount. So, you should choose your lender carefully, depending upon your requirement. Otherwise you won’t be able to buy your home on time.
You can also consider visiting online financial marketplaces to conveniently compare various potential lenders, and choose the most suitable one for your home loan.
3. FESTIVE OFFERS ARE FINE, BUT …
Many potential homebuyers, who aren’t ready or eligible to take a home loan, get carried away by festive offers and end up applying for a loan. Such individuals must remember that even though these festive offers’ primary aim is to attract borrowers by giving them various benefits, they should ensure that they are financial ready to make the down payment and avail the home loan as a home loan is a longterm financial commitment and should not be taken in haste. Financial experts say that for most households, the festive season is deemed auspicious to make investments and buy their dream home by availing a home loan. “To compliment this, many lenders, especially banks, come up with attractive offers such as special interest rates and processing fee waiver. Since home loans usually involve huge loan amounts and longer repayment tenures, potential homebuyers must take advantage of such festive offers to reduce the overall cost of their home loan, before the festive season ends. However, borrowers must carefully scrutinise each offer and opt for the lender whose offers provide maximum benefits as per their financial position and loan requirements,” says Kukreja.
4. CHECK OFFERS ON ONLINE LENDING PLATFORMS
Along with banks and NBFCs, various online lending platforms also offer lots of discounts, fee waivers and concessional interest rates on loans availed through their portals. Hence, borrowers must consider availing home loans through these online platforms in order to take advantage of such offers.
5. AVAIL CLSS SUBSIDY UNDER PMAY
You should also check if you are eligible for the Credit Linked Subsidy Scheme under the Pradhan Mantri Awas Yojana, as announced by the Modi government. First-time home buyers are eligible for the same, although certain conditions must be met. If you fulfil the conditions, then don’t forget to avail the subsidy.