5 Points To Consider Before Picking Your Lender
Much before we apply for a home loan, there is another question that bothers every prospective borrower: Who should be my lender? What should be the criterion to choose a bank for taking a home loan? Often, borrowers, who have many other things to worry about, just opt for a bank with which they have an existing account. However, that might not be a good idea.
There are other things you must consider before finalising your banker.
- Between 0.25 per cent and one per cent, banks charge a processing fee for providing you a home loan. This is not a small amount and due care must be taken to ensure the bank you are opting for charges a lower processing fee. Here is a tip: you can talk to your lender into waiving this charge fully. The task would be easily achieved if you are an old account holder with the bank.
- You have been an old customer of this particular bank which is promising to exempt you from paying small charges, including the processing fee and the administrative fee, on your home loan. However, the interest on loan is higher when compared to other financial institutions. It is advisable to find a new bank in this case. No waivers would be able to set off the loss you incur if the rate of interest on your home loan is higher.
- Most private banks recruit third-party agents who work on commission to get the banks customers. However, do not confuse these agents with bank staff. It is better to negotiate with bank officials to negotiate a good deal. It also helps you understand the whole process without any confusion coming in the way. In case you are not directly in touch with banks officials, agents have the scope to mislead you. Always go for a bank that does not engage third parties to communicate with you.
- While it is important that you go for a lender that offers you the cheapest deal, it is also important to ensure you are dealing with a trusted entity. It should only be an authorised entity you should be taking a loan from. Even if a small operator offers you cheaper interest rates and other incentives, it is not advisable to go with them.
- When it comes to home loans, one-size-fits-all approach does not work at all. Every borrower has specific requirements that might be met only by specific lenders. One way to find the best-suited lender is to go online and find out about the services they offer. After doing your research, settle for the one that is best suited for you.