Every working individual is driven by some or the other goal. It can either be a short-term one, such as buying a car or a more long-term one – to have an early retirement. While the plans may vary, there is one goal that almost every working individual has, and that is to own their own home. This is where a financial tool such as a home loan comes into the picture.
Regardless of whether you want a 1 BHK in Thane or a luxury apartment in Navi Mumbai, a home loan is available for all. Moreover, thanks to more people looking to buy homes, banks and financial institutions have made the entire loan borrowing process hassle-free while also providing it at low-interest rates.
Having said all this, what if we tell you that there are several tips you can keep in mind that would help you secure low interest on home loans? Don’t believe us? Well, read on to find out all about it.
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Explore the banks for the best rates
Refrain from settling for the first interest rate you come across. Take the time to shop around and compare rates from different banks. You would be surprised at how much they can vary! One of the best ways to do this is to use online tools, such as rate comparison websites, to get an idea of the available rates. Also look into federal programs such as FHA home loans as options as well.
Ensure that You Have a Good Credit Score
A higher credit score can lower your home loan’s interest rate. So, ensure you’re paying your bills on time and keeping your credit card balances low. This means paying your bills on time and keeping your credit utilisation low.
Make a bigger down payment
A larger down payment can lead to a lower interest rate on your home loan. So, if you can swing it, try to save up for a bigger down payment. Also, the more you put down, the less you have to take a loan, which means you will have lower monthly payments.
Choose a shorter loan term
The shorter the loan term, the lower the interest rate. If you can afford it, consider a 15-year loan tenure instead of a 30-year one. With a 15-year tenure, you will pay off your loan quicker and save money on interest over the life of the loan. Even if you cannot afford the higher monthly payments of a 15-year tenure, you can still opt for a 20-year or 25-year term, which will also have lower rates than a 30-year mortgage.
Getting pre-approved for a home loan can give you an edge when negotiating a better interest rate. It shows that you are a serious buyer and have your finances in order. This will also help you when you are looking for a luxurious flat in Navi Mumbai, as you will know how much you can afford, making your search a lot easier.
Consider Home Loan Balance Transfer
Some lenders also provide the option of transferring loan facilities for individuals who have already started making EMI payments. Simply put, if the interest rate at your current bank or lender is higher, you can transfer the remaining principal amount to another bank or lender offering lower rates.
However, it is also important to note that this would require clearance from your current lender and would also cost you file transfer charges.
Keeping the tips above in mind, the task of buying your dream luxury apartment becomes a bit easier. You only have to ensure that you do your research thoroughly before setting out to buy your desired apartment in Navi Mumbai.