Remember that you are entering into a long-term relationship with the lender when you take a home loan. Choose a flexible home loan product that gives you the leeway to switch between fixed and floating rates at no additional cost. (these terms are explained in detail in the section on "Choosing a loan"

For short-term loans (less than 5 years) and for small loan amounts (less than Rs. 5 lacs); the Total Effective interest rates can vary widely between Finance Companies. However, for the more common, long tenure loans the interest rate differences between compaines are small.In that case, Companies that have lower documentation requirements and those who are able to better customise the loan must be approached. Responsiveness to queries and the average speed in processing loan applications are the criteria used to judge service standards.

Home Loan Companies quotes interest rates based Daily/Annual/Monthly rest. This can be confusing for customers. Abodes India.com simplifies this by calculating all quoted interest rates on a common basis. For comparison purposes all interest rates quotes are converted into an effective Monthly Rest basis. That quote on a (M.R) Monthly Rest basis normally provides the lowest cost loans 

A member of hidden costs needs to be explored. Most Companies doesn’t pay for the technical valuation report of the property other insists on a registered Mortgage that will increase costs of taking the loan.

But one of the most expensive hidden costs takes the form of a prepayment penalty. Avoid Housing Companies that charge this penalty if you hope to retire the loan before is full period (or sell the home). Though people take a 10-15 year loan, improving cash inflows (from a bonus or job promotion) invariably results in prepayment of the loan in 5-7 years.
 
 

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