With inflation rearing its ugly head and the prices of essential commodities soaring to new heights every day, arranging money during times of need has become paramount. Whether it is an urgent hospitalisation or home repair, house renovation or property purchase, getting an instant credit might save you from troubles. Thankfully, mortgage loans from reputed lenders can help you get instant cash within 24-72 hours. However, choosing the best mortgage loan is not easy. In an industry filled with lenders and loans, only an informed borrower can choose the best one. This article contains the ultimate tips you need for choosing the best mortgage loan in 2021.
The Top Qualities of The Best Mortgage Loan in 2021
The best mortgage loans have one thing in common – they offer a seamless borrowing experience. Here are the tips you can consider to choose the best mortgage loan in 2021:
- Interest Rate – Mortgage loan interest rates generally start from 9%. If your lender offers anything else, read the terms carefully. Sometimes, lenders display an ultra-low interest rate to lure borrowers and charge a higher processing fee or levy higher foreclosure charges. In such cases, your effective savings will come down to zero or negative. Hence, before applying for a mortgage loan, you must read the terms carefully and choose the lender who does not hide any terms.
- Eligibility Criteria – Although mortgage loan eligibility criteria vary widely, the primary rules are almost the same. If you find a lender who deviates from the standard track while framing the eligibility criteria, you need to be cautious. Generally, any salaried professional above the age of 21 and below the age of 60 and self-employed professional between 25 and 65 can apply for a mortgage loan in India. Both salaried and self-employed professionals need to earn at least INR 25,000-30,000 every month and possess a CIBIL score of 700 and above.
- Documents Required – Since mortgage loans are secured, the documents required to apply for one are minimal. Reputed lenders like Fullerton need no more than six to eight documents from borrowers. The documents include Aadhar Card, PAN Card, two years’ Income Tax Returns, Form 16, 6 month’ Bank Statement, Income Proof, property documents, and processing fee. You can pay the processing fee via a cheque or online.
- Loan to Value – Reputed lenders provide loan amounts of up to 70% of residential properties and up to 60% for commercial properties. The maximum loan amount is usually capped at 60% to 70% of the property or INR 12.5 Crore, whichever is higher. However, before choosing the loan amount, you must evaluate your repayment capability to ensure that the loan amount never causes a financial burden.
- Loan Term – Reputed lenders usually provide a mortgage loan repayment term of up to fifteen (15) years from the first EMI date. The minimum repayment tenure is one (1) year. Hence, if your lender offers anything less than 15 years, you need to reconsider your decision. While choosing the repayment term, it is prudent to consider your financial goals and spending habits in advance.
- Finance Any Need – The best mortgage loans enable you to finance all your needs. Some borrowers use the loan amount for house purchase or renovation. In contrast, others use it to fund business expansion, sponsor a wedding or luxury vacation, settle education fees, or pay hospital bills. The best lender never enquires about how you plan to spend the amount.
- Convenient Approval Process – You can apply for mortgage loans in two ways – online and offline. Some lenders provide an app-based application process. You can download the app from Google PlayStore and enter your email and phone number to create a profile. After this, you may use the mortgage loan calculator to know about the interest rates and the EMI amount. After that, you need to upload the documents and apply for the loan. Reputed lenders usually approve the loan within 72 hours of the loan application.
Mortgage loan interest rates depend on factors like the borrower’s credit score, age, monthly income, property location, etc. A credit score above 700 and a monthly income above INR 25,000 almost always guarantee loan approval. If you want to get mortgage loans at the lowest rates, pay your EMIs on time and keep a clean financial profile. Also, read the loan terms properly to avoid hassles in the future.