The Wall Street Journal reports that mortgage interest rates may soon rise since the Reserve Bank of India increased interest rates by 0.25%. Economists are predicting the rates will soon go up even further. Mortgage rates are currently still at an historic low (the 30-year fixed-rate mortgage averaged 4.57% for the week ending July 15) but while loan rates are currently cheap, it’s harder than ever to get approved for a loan.
Lenders are now being extremely cautious before approving new loans, and most are no longer willing to overlook less than a superb credit history. Even a slight problem with your credit can make or break your application. Additionally, loans are no longer being made for more than the value of a home and proof of a steady job is absolutely essential for your application.
If you are able to get approved, it’s important to choose a lender who has low interest rates and also has a low fee structure. Some banks such as Axis Bank, charge as much as 1% for a “home loan processing fee”. You should also check to see if your lender will charge you a prepayment penalty if you attempt to pay off the loan early. Some lenders may be willing to negotiate processing fees with you, so it never hurts to try to negotiate. You should also ask friends and family for recommendations, as the quality of customer service can affect your overall satisfaction with the lender over the long term.
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