Housing and finance have been in the news for long time. With prices rising around 50 per cent across the country in the past year, homebuyers are confused on the future direction of prices and more importantly they do not know how to finance the purchase. Despite property prices having zoomed over the past three years, the housing finance industry those are comprise of specialized institutions private housing financing companies and even the banks, has also bloomed. All the four parties involved in this deal like individuals, home loan lenders, real estate developers and investors have gained and this is expected to continue though at a moderate rate going forward. Home finance companies say that the demand for housing loans continue to be strong at 25-30 per cent approximately over the period. The stock prices seem to have factored in all the good news especially for larger private companies.

Inside story of finance companies

In this period overall real estate prices have almost doubled. While top major cities have seen their prices doubling up or even more, and theses cities have seen a growth of 50 per cent. There are several reasons for the skyrocketing prices like vigorous growth in the economy leading to rising disposable income of the people. Structural factors like nuclear families, changing demographics. Despite higher property prices, housing finance companies like banks financing home loans or other private companies have also gained a lot with the industry growing at over 30 per cent in the last five years and profits jumping by 20 per cent every year.

Check the rate of interest

Although the rate of interest offered by most private companies is more or less the same on paper, some degree of bargaining in most cases leads to a lowering of rates by as much as 0.25 to 0.50 percentages. The lowering of interest rate has a significant force over the long term although the difference is not so obvious over the near term.

Do your homework

Most of the people have a tendency to buy into brand rather than going for what suits them best. It is not about how big the brand is but it is more about whether that brand suits the requirement and satisfies criteria. Make a list of the requirements first. Talk to people who have already taken a loan from particular house finance companies and get their feedback. Other factors like documentation, processing fees, document storage facilities and the time taken for processing loan should also be considered. All individuals do not like it if the documentation is a tedious process. If the processing fees are excessive then go to other finance company.