On an average, the modern day Indian women are borrowing more home loans than men, according to the Moneymood 2019 report by BankBazaar, the online personal finance services marketplace. While the average home loan ticket-size of men in 2018 was Rs.22.97 crore, the amount was higher for women at Rs.27.57 crore. With women-friendly loan schemes, subsidies under PMAY, and the transparency brought about by RERA, women are signing up as primary applicants for home loans in greater numbers.
If you too are looking to capitalise on this, here’s what you need to be aware of when shortlisting an affordable home loan.
- Start by building or improving your credit score. A good credit score and history gives you the bargaining power to negotiate for favourable home loan terms.
- Don’t get lured by low interest rates as it is not a guarantee that such lenders offer the best services. Look for better customer service along with affordability.
- Find out fees and charges associated with home loans as they add to your borrowing cost. These include processing fees, prepayment penalty, foreclosure charges, secure fees, late payment charges, EMI bounce charges, etc.
- Understand that fixed interest home loans are costlier than floating rates and involve a prepayment penalty. They also come with a reset clause where your fixed rate is changed. In the short term, a fixed rate is more cost-effective; however, in the long term, a floating interest home loan may be cheaper for you.
- Apply for a home loan only after you qualify for it basis the eligibility criteria of a specific lender to ensure your application is approved. This also keeps your credit score from dropping after a rejection.
- Forecast your EMIs in advance to ensure your income is sufficient for timely repayment, and that you can address your other fixed expenses without strain.
- See if your lender allows you to increase EMIs annually to keep pace with your increasing income and plan prepayments at least once a year to reduce your total interest payable.
- Lenders offer attractive features and discounts for women home loan applicants. Some also offer discount on interest rates to female loan applicants, while many also waive any processing charge on home loan during its offer period. It would thus be wise to compare the loan offers to get the best deal.
- Many states offer discounts or waiver on the stamp duty and registration charges to women home buyers, so ensure you explore such benefits with the local authorities and the builder to reduce the cost of buying.
Choosing the right lender can save you lakhs of rupees. So, use this guide for your benefit and fund your dream home conveniently. If you’re opting for PMAY as a first-time homebuyer, select a lender who can offer you its benefits.