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7 Tips to Choose Home Loan Providers in the US

Buying a home in the US is no easy task, irrespective of whether you’re a citizen or an expat. The primary challenge in this regard is putting together the money to be able to afford a house. In most cases, people end up taking loans to buy houses, and they often do so without first ensuring they’re not getting pushed into a debt trap.

In this article, we will give you seven tips on how to choose a home loan provider that’s right for you. Let’s get right to it!

Select A Property Beforehand

When you select your property before approaching the lender, you have the edge over other clients. The lender would be sure that you can fetch another potential lender if not served with the best deals you are looking for, which makes it even more authentic. It would reinforce the tool of negotiation serving as an advantage to you. Moreover, the lender would also be sure of your intention. You can also contact the lender in the last few working days to seek some extra benefit, as they would also have some targets to complete, and this will move the deed towards you even more.

Check Profile and Eligibility

The quantum of loan that you would receive depends on your monthly income and property value. Each bank has its own set of rules and procedures for calculating eligibility. You can easily calculate and check online using many standard calculators available. There are certain mandatory checks. These include-

  • Check on the sum income being viewed, including annual components of income.
  • Search for different banks that provide better loan options according to the eligibility.
  • Some banks allow the clubbing of family members’ income other than a spouse for a better deal concerning borrowers.
  • Self-employed people might have incomes from different sources to check whether they are being considered.
  • Make sure you have a clean credit history, it gives you an advantage.
  • Approaching housing finance companies might be risky as they intend to provide loans at higher rates.

Examine the Interest Rate

You need to consider the loan interest rate, which includes the EMI and the total interest paid before applying for a home loan. Check with different money lenders, banks, and financial institutions, and choose the most competitive one. Moreover, interest rates are of two types- fixed and floating. Fixed rates have no fluctuations, whereas floating rates vary according to market conditions. While housing finance companies have a basis termed as the Retail Prime Lending Rate (RPLR), it is advised to take a loan during the declining interest rate cycle. You have the option of changing the rate in a fixed-rate loan after a tenure while the floating rate moves up and down depending on how the market responds. American Residential Warranty, a national leader in the home warranty industry, offers customised interest rates, suiting your needs and requirements.

Look Up Property Classification

Loans and finances are provided differently for different properties depending on whether it is a purchase of a plot, for construction, or to move in a ready house. Under-construction properties are comparatively at an edge of frauds regarding possessions and property ownership, which may turn it into an NPA, and lenders may be reluctant to finance such properties.

Cross-check Processing & Prepayment Charges

All financial lenders charge a processing fee for processing the loan. This rate varies as per the loan amount and ranges between 0.25%-2% of the loan amount. Try to get clarity on these set terms and conditions about prepayment. You must understand them entirely and look for the most competitive rate.

Another thing you should clarify is the set of terms related to the settlement of your outstanding amount. At times, different rates are applicable to partial and full payments. Check what suits your needs, keeping in mind anticipated income, before you finalise your lender.

Examine Responsiveness to Change in Rates

Another essential thing to look for home loan providers is to understand how quickly he responds to the changing interest rates as per the central bank’s policies. For instance, if the lender reduces rates in response to a reduction in the repo rate, he will provide you with a fair deal. It would help if you considered the option for lenders you have a fair-trade policy and quick responsiveness to changing interest rates. American Residential Warranty is highly responsive to the changing rates and changes its warranty plans as per these.

Check Turnaround Time

A critical factor when you are looking for home loans is the turnaround time. In other words, the time taken by the lender to sanction and disburse your loan. While it usually varies from bank to bank, the usual time is around five to six working days after all the documents have been provided. You need to choose a lender who takes the least time to sanction the loan, has a reliable system, and has a good record of after-sales services. With the multiple plans that it has, American Residential Warranty provides a quick response and turnaround time, so that you don’t lose out on your time.


As you look for home loan providers, you must check home/residential warranty to cover your appliances. These include cooling units, ductwork, electrical systems, sewer, and water lines, ceiling fans, switchboards, garage, electronic devices, chimney, and other kitchen appliances for complete protection against any odds. A comprehensive home warranty provides peace of mind and financial security for your property.

American Residential Warranty covers major electrical appliances, heating and cooling systems, ductwork, plumbing, essential home repair works, and many more miscellaneous repairs. These are clubbed under different plans like platinum premier, platinum, kitchen plus, and likewise, depending on the scale and amount of service required. This helps you cover the cost of repairs and replacement, and also saves your time and energy. You need to judge your lenders on the above parameters and then choose the best home loan provider.