Getting a home loan is one of the most important financial decisions of life as it is a long-term commitment which is very expensive. However, most of the time property dealers deluge prospective buyers with discounts, payment plans, and freebies, banks, and housing finance companies (HFCs), too, have come out with special offers on home loans during the festive season.

So, once you have chosen the property, the next big decision is to identify the bank or financial institution.

While choosing a lender for your home loan, here are certain factors that you should consider:

Loan amount and eligibility
It is the monthly income of an individual on the basis of which amount of the loan is decided. Also, the loan amount is decided on the basis of the value of the property. The loan amount granted is 80per cent – 90 per cent of the property’s value. 

The rate of interest
The EMI and interest outflow depends upon the rate of interest on the home loan. Research in the market before you finalize the bank from which you take the loan. Try to get the lowest interest rate on the loan. You must also decide that the loan you opt for would be with a fixed rate of interest or floating rate of interest. 

Processing charges and prepayment
The processing fee is the charge banks deduct for processing the loan. This can be anywhere between 0.25 per cent-2 per cent of the loan amount. Lenders also set terms and conditions pertaining to prepayment.

Get the documents in order
A typical loan application requires the borrower to prove the identity, address, and income. For example, to establish income, income tax returns, form 16, salary slips, GST returns, bank statements or anything else will be required.

Turnaround time
The time taken to sanction and disburse home loans varies from bank to bank. On average, banks take around five days to sanction a home loan, provided all documents are in order. There are a number of post-disbursement services involved. These include getting regular account statements and interest certificates on time every year. Choose a lender with strong systems and a good record of after-sales service