If you are looking for a home loan, make sure you have a good credit score. A score above 750 and preferably over 800 qualifies borrowers for the lowest rates. Some lenders also give lower rates to salaried borrowers over self-employed ones.
“Credit score determines the customer character and capacity which helps customer to negotiate the commercials with the developer as well as financial institution,” said Parag Kale, Business Head, RBL Bank.
BankBazaar lists borrowers who get the best home loan offers
Women often get additional discounts of 5-10 basis points on interest rates.
The smaller your loan or loan-to-value ratio, the lower your rate.
Houses from A-list builders may make the financing process easier.
Existing Customers having a salary account with the lender may get you lower rates.
The effective rate that is charged to the home buyer is made up of the repo rate, the spread that the bank decides, and the credit risk premium, which is determined by the borrower’s credit score.
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The risk for the lender also goes down when a home loan borrower makes a higher down payment than required and therefore, lenders offer their best or lowest home loan interest rates to borrowers who pay a higher down payment than needed.
What does a home cost? If you are buying an under-construction home, Banbazaar breaks down the following costs for you:
“A home loan can cover most but not all expenses related to a house purchase. The RBI’s LTV guidelines and the borrower’s eligibility play a part in what can be borrowed,” said Pankaj Bansal, CBO, BankBazaar.com.
A loan may cover 75-90% of the sum of the base price, GST, amenities and utilities . The rest—i.e., 10-45%— comes out of pocket. Large costs such as registration and stamp duty and furnishing will typically not be covered and must come out of the buyer’s savings.
Home loan interest rates: Rates as advertised by the lender on September 26, 2023. Rates are liable to change. The lowest rate for each lender considered. The lowest rates are given only to eligible borrowers.
Read part one of our two-part series on home financing here.