A mortgage loan is a secured loan that an eligible applicant can opt for by mortgaging an immovable asset to the financial institution. Getting the best mortgage loan interest rate is essential since interest rates determine the borrowing cost. Hence, before applying for a mortgage loan, consider the following tips to get the best mortgage rate.
Tips to get the best mortgage rate
To secure the best possible rate, follow these five tips:
1. Opt for a shorter tenor
Opting for a shorter loan tenor implies that an individual pays higher EMIs with a lower interest rate. In this regard, a loan against property EMI calculator can help choose the right repayment tenor.
2. Maintain your credit score
A borrower's credit score is vital in a loan against property. Most financial institutions consider 750 or above as the minimum credit score to secure a reasonable interest rate.
3. Reduce your debt-to-income ratio
Individuals carrying a heavy debt load allow lenders to think of them as financially unstable applicants. So one can reduce this ratio and increase the chance of loan approval.
4. Start saving for a bigger down payment
Lenders consider an individual a higher-risk borrower if he/she makes a down payment of less than 20%. Therefore, a sizeable down payment will help you obtain a lower mortgage loan interest rate.
In addition, before applying for a mortgage loan, one must check the eligibility criteria and list of documents required for Loan Against Property. Then, simultaneously follow the above-mentioned tips to secure a lower mortgage rate.
Read More: What Is Mortgage Loan and What Are the Tips to Get the Best Mortgage Rate?
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