How to Get the Best Mortgage Rate? Learn in a Few Easy Steps

How to Get the Best Mortgage Rate? Learn in a Few Easy Steps

Mortgage loans are popular credit options in India that help fulfil one’s high-value funding requirements. Most financial institutions extend this secured credit option at attractive rates of interest for borrower convenience. Individuals can further look for the best mortgage loan interest rates to repay affordably. All they need to do is adopt a few ways to adjust factors which influence the interest rates on these advances.

Tips to get the best mortgage loan rates

Individuals can improve their chances of availing the best mortgage loan interest rates by –

1.Taking measures for credit score improvement

Adopting necessary measures that help improve the credit score is one of the simplest and most effective ways of availing a loan at the best mortgage loan interest rates. A high score reduces the risk to lenders, thus allowing them to approve lower rates. Some measures that can create a positive impact on one’s credit score include – reviewing credit reports to eliminate transactional errors, maintaining a low credit utilisation ratio and making timely repayments, among others.

2. Making a high down payment

If planning to make high-value expenditure with the advance, like property purchase, individuals can opt to increase the amount of down payment required for such purchase. A high down payment lowers the loan requirement. It, in turn, limits one’s fixed monthly liability, thus reducing the risk of default as well.

Consequently, borrowers with a low risk of default often stand a good chance of availing attractive mortgage loan interest rates. A high down payment also depicts positive credit behaviour of the borrower and helps gain the lender’s reliability.

3. Establishing your income stability with the lender

A stable and steady flow of income indicates a strong financial standing and a reliable repayment capability. Consequently, both self-employed and salaried applicants with a regular flow of income are positioned better to avail a mortgage loan at better rates than others.

Notably, individuals are required to meet specific income-related criteria as per their employment status to avail a loan against property from most leading financial institutions. When documenting their income details, they can provide all existing sources of income to portray an increased repayment capacity and interest rate negotiability.

4. Choosing interest type carefully

The rate of interest borrowers attract on their mortgage loan is also dependent on their interest type. Broadly there are two types of interest rates, namely, fixed and floating rates. In the case of fixed interest rates, interest burden remains the same throughout the repayment tenor.

Conversely, floating interest rates tend to fluctuate and can increase or decrease during the tenor depending on the market trends. Individuals need to be thorough with the pros and cons of both interest types to decide the better option between floating interest rate or fixed interest rate. Depending on it, they can determine what type will help them to secure the best rates.

5. Comparing lenders for the best rates

Comparing various lenders is one of the fundamental ways of securing an attractive interest rate on your loan. It shall help arrive at a lender offering the best rates in the market. Nonetheless, individuals should also find out more about the additional charges to determine if a said loan is affordable or not.

Some lenders offering the best rates also provide customers with attractive pre-approved offers to simplify the process of availing a loan. These offers can be availed on multiple financial products, including home loans and loans against property. Check your pre-approved offer online in a few steps by just sharing your name and contact number.

6. Opting for a balance transfer

Existing borrowers can secure a better rate of interest by opting for a mortgage loan balance transfer. Subsequently, they must find out about all the charges payable to their existing and new lender to avail the loan transfer facility. Borrowers can benefit from the said feature only if the total cost involved is lower than their existing interest burden.

Additionally, one can also lower the total interest accrual as per the applicable mortgage loan interest rates significantly by opting for a shorter tenor. Though a short tenor will attract a higher monthly instalment, it proves advantageous in reducing the overall cost of availing a loan as interest is charged for less number of years.

One can use tools like a loan EMI calculator to determine the ideal tenor of their loan against property and apply.

Lastly, individuals seeking the best mortgage loan interest rates should repay their existing credit liability in time for an improved credit profile and adopting such other credit disciplines. Also, by availing a loan from a leading financial institution which sets simple eligibility criteria and nominal charges, borrowers can manage their debt better.

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