Searching for a home loan online is usually not an easy task. There are online resources to help you with the home loan plans but you would only learn the relative benefits of those plans. Hence some general research would help in zeroing in on the best plan with confidence. Here are the things that one would make one’s self aware of before searching for a home equity online.
Familiarize yourself with prime lending rates
Prime lending rates are interest rates established as benchmark for lending across the banks in India. They are revised from time to time by the RBI. But when a lender offers a home loan planfor an interest rate which is higher than the prime lending rates, after charging excessive fee for processing, then you are being offered subprime lending rates. Such lending rates are to be justified by the credit score of an individual. Only those with bad credit scores get subprime lending rates because of their high risk and low propensity of servicing the home loan effectively.
Is your equity worth assessed correctly?
Equity in a home loan is the percentage of the home that you own. This percentage is not in term of area but value. If your home costs Rs. 50 lacs and you borrow Rs. 30 lacs from the bank, then your equity ownership is of Rs. 20 lacs or 40% of the total home loan value. The bank owns the remaining. However the importance of this figure comes handy with loan to value ratio; which in turn is helpful in assessing a line of credit if you need one. This is the reason why you should look out for the plans in totality when you apply home loan online.
Predatory lending practices
Predatory lending practices cannot be identified with the plans. They are to be found in the feedback. Therefore no matter what bank you choose for the loans, look for resources online that give a feedback on the lending services from such a bank. Many banks lend home loans to those people who do not have good credit scores. These banks wait for these people to default their loans and then offer them another line of credit to help them. The quick assistance has a cost and these lenders constantly pressurize the receiver to payback. With blank banking documents signed under duress, such lenders ultimately elbow out the loan receivers and take over the properties. One should be careful before taking up a loan about such lending practices.
It is not easy to identify such lenders only if applicants compare home loan interest rates.
One should be aware of the mortgage clause and what it would take before the bank or the lender takes over the home and repossess it. One should be prepared in advance for any exigency situation that may lead to repossession.
Basic information as aforementioned can go a long way in helping you service a home loan smoothly.