Friday, 13 February 2015

SELECT A FINANCIER TO FINANCE THE PURCHASE OF YOUR PROPERTY



You need to bear in mind certain parameters while selecting a financier and then take a decision accordingly. It is certainly difficult to get the best in each of the following parameters and therefore some sort of compromise needs to be done on the basis of your priorities.
The parameters are mentioned below:

Type and Tenor: Whether the financier is offering a loan product to suit your requirements. Whether the financier is offering the tenure of loan that you are looking for.

Rate of Interest: This would depend on the type of Rate of interest that you are looking for i.e. fixed or variable rates of interest. You must always compare the effective interest rate after taking into account all upfront fees etc. and the manner of interest calculation. i.e. monthly reducing, annual reducing etc.  
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Minimum and Maximum Loan Amount: The minimum loan amount offered by a financier is important to find out if the financier can finance the amount you are looking for. Most HFIs have a upper limit on the amount that they would finance. If you are looking for a very huge amount, this could be a factor that needs to be considered.

Minimum and Maximum Age of Customer: You will have to consider this factor to see if you fit into the age norms laid down by the HFI. This would also form a parameter in your decision on deciding a HFI to finance the purchase of your house.

Maximum Permissible LTV Ratio: The maximum loan that you would get as regards the value of your house needs to be looked at. THE Components of the value would also be important.



Minimum Income: The income norms of the HFI will be a relevant parameter that would affect your decision.

Requirement of Personal Guarantors: Some HFIs insist on a Personal Guarantor. You need to check this out if you have any reservations about providing a guarantor.

Requirement of Co-owners: If you intend to buy your house along with a co-owner, you will have to check whether the HFI accepts the relationship between you and the co- owner.

Requirement of Co-applicant: As mentioned for co-owners, the HFI may also insist on only certain relationships as joining your application as a co-applicant. This needs to be checked out while deciding on a financier.

Pre-Payment Charges: Some HFIs charge certain prepayment charges when you decide to prepay your loan either in part or in full.  
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Processing Fees: HFIs charge certain fees as processing fees that you will need to pay at the time of submission of application.

Administrative Fees: As mentioned above, HFIs also charge administrative fees on the loan amount that has been approved by the HFI. This would vary from one HFI to another.

Credit Documents: The type of credit documents that HFIs insist on before approving your loan would differ from one HFI to another.

Maximum age of property at the time of application: If you are buying a property on resale, this parameter would be an important one as HFIs may have a limit on the age of the property at the time of disbursing the loan.

Pre-approved property list: Most HFls have a pre-approved list of properties available for which the documentation would be simpler.

Pre-approved list of employers: HFIs may have special rate if you are an employee of one of its preferred list of employers.

Pre-approved builders and projects list: HFIs may also have different norms of documentation if you are buying a property in any of their pre-approved list of builders. HFIs, as mentioned above for builders, may also have separate schemes for certain projects.

Pre-approved Professionals list: HFIs may have certain schemes to suit customers of certain professions.

The above mentioned are some of the parameters that you will need to look at before deciding on your financier. Getting a financier who would offer you the best in all of the above parameters is virtually impossible. You would, therefore, need to identify your priorities and check out on which financier would give you the best option.
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