Looking for a home loan? Here’s how to go about it…

First off, congratulations; buying a home, whether to invest or to live in, is a landmark decision. There’s a slew of products out there and we’re going to list a few pointers to help you navigate the crowded Indian home loans marketplace. [caption id=“attachment_2300970” align=“alignleft” width=“640”]  Image Courtesy: Shutterstrock[/caption] 1. Choosing the lender: a. Shopping for offers: most buyers require a lender that can offer them upwards of 80% of the cost of the property at a competitive rate. Check with banks with whom you already have some kind of relationship to understand their product/s. Approach other lenders after this step, so that you have some information on hand against which to compare their offers. b. Consider the trade-off between processing-speed and rate of interest: A public sector lender will probably offer you a lower rate of interest, and not react first to market pressures in hiking their rate. But on the flipside, they could take as long as 3 months with the disbursement. Approach both public-sector and private lenders to understand their trade-off. 2. Ask your lender regarding every peripheral cost:This is among the bigger financial decisions of your life, so leave no stone unturned when asking about the costs involved. If need be, cross-check the information your loan-sales officer is giving you with a call to the bank’s call centre. Take into account franking costs, service tax, processing fees and possible foreclosure penalties. 3. Be clear on the documentation you need to provide:Once more, cross referencing with the lender’s loan officer, website and call-centre would be helpful here. In general, you’d need to be prepared with: a. Bank statements for a requisite period (usually 6 months) b. 3 to 6 months’ salary slips, and ITR/Form 16s dating back up to 3 years c. CA-certified balance sheet and P&L accounts (for non-salaried applicants) d. PAN card, age and address proofs e. A guarantor/co-signee to the application f. Entire chain of documents of the property under consideration 4. Check if you’re applicable for any concessions: Some lenders have concessionary rates for women buyers and senior citizens. If you fall into either category, be sure to ask your potential lenders what they have to offer you. So ask around among friends and family, do some reading on online forums, your broker too (if one is involved) could have some advice on the right product for you. Take all this into account to select a reputable lender offering the disbursement you requireat a competitive rateand reasonably good after-sales service.