5 Tips to Choose the Right Mortgage Lender for You

Mortgage loans are secured loans that you may avail by providing your residential or commercial property as security to the lender. The lender gets the right to seize that property in the event you fail to repay the borrowed loan amount along with the interest rate. Since it is a secured loan, its interest rates are lower than unsecured loans, and they are much easier to avail as they bear the minimum risk to the lender. However, the key is to choose the mortgage lender that best suits your requirements, preferences, and budget. 

Are you looking for a mortgage loan to cover your planned or urgent expenses? Here are the five most valuable tips for choosing the right mortgage lender for you.

  • Check Your Eligibility

Most NBFCs have simplistic eligibility criteria that most applicants can fulfil easily. They include your age, income, employment, credit score, and other parameters, based on which the lender determines your eligibility. Before applying for a loan, check your lender’s eligibility conditions and ensure that you fulfil them. If not, find another lender or improve your eligibility to get an ample loan amount suitable to your requirements. Applying for a loan with high eligibility improves your chances of approval and saves your credit score.

  • Compare Interest Rates

When you apply for a loan, you need to repay it to the lender along with the interest rate. Therefore, your ultimate aim should be to find a lender offering the lowest mortgage loan interest ratesthe lower the interest rate, the cheaper your loan cost. Lenders determine your interest rate based on your eligibility, credit score, debt-to-income ratio, credit utilisation ratio, loan amount, down payment, and several other factors. Compare the interest rates different lenders quote you and select the one with the lowest offer.

  • Look Through the Repayment Term

Most mortgage loan lenders offer flexible repayment terms these days ranging from a few months to several years. Depending on your repayment capacity and monthly budget, you can select a loan tenure with affordable EMIs.

Use a mortgage loan EMI calculator to know the amount you have to pay every month to pay off your loan. Longer term keeps EMIs small, but if you choose a short tenure, you will need to pay a hefty EMI amount each month. Therefore, consider your monthly income and other financial obligations while selecting your repayment term. The key is to find a lender offering flexible repayment terms suitable to your budget.

  • Ask Questions and Read the Fine Prints

Asking for referrals from family and friends will help you narrow down your choices. Once you shortlist a few lenders, ask them these questions:

  • How do you communicate with your clients and how quickly do you respond?
  • How long do you take for pre-approval, disbursal, and closing?
  • What are the fees and charges borrowers have to pay?
  • Do you waive any charges or roll them into the mortgage loan?
  • What are your down payment requirements?

Also, negotiate the mortgage loan interest rates. The difference of even a few percentage points can significantly reduce your loan cost. Besides that, do not miss the fine prints on your loan agreement. These will let you know the exact terms, fees, and other items that are and are not included in the mortgage. If you find any discrepancy, clear your doubts with the lender before signing the agreement.

  • Ensure Maximum Property Valuation

Since your loan-to-value ratio will determine the loan amount you are eligible for, your property’s valuation will play a significant role in selecting a lender. Each lender will have its own metrics to decide your property’s value and approve your loan amount accordingly. You may get a valuation done by multiple lenders and select the one offering the maximum loan amount that you require. However, qualifying for a higher loan amount does not mean you should take it all. Calculate your financial requirement and borrow a loan amount you can repay conveniently. The best tip is to save for a bigger down payment and borrow a minimum.

Are you looking for a mortgage loan? Use the tips mentioned above to find the best lender offering an ample loan amount at the lowest mortgage loan interest rates. Apart from these, give attention to the lender’s customer service, reviews, and accessibility to ensure a pleasant loan experience.

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