Choosing a Housing Finance Company:
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”
Choosing the lending institution is another vital step. It is imperative to choose the financer with utmost care and proper consideration of its past track record. Apart from the housing finance companies, most of the major nationalized banks have forayed into the home loan segment.
Flexibility of repayments:
If you intend to make a lump sum repayment within the next one to three years, you should look for a package that offers you the flexibility to make such repayments without penalty. Some packages impose a penalty fee of up to 1.5 per cent of any lump sum repayment you make.
Transparency of rates:
If you want to know the exact basis for the interest rates charged on the housing loan, you can consider loans pegged to interest rates that are publicly available, such as the three-month Singapore Inter-bank Offer rate (Sibor) or Swap Offer Rate (SOR) which move according to market conditions.
