7 Things to Check Before You Sign Your Home Loan Agreement

1. Fixed vs Floating Interest Rate

Your EMI can be calculated on a fixed rate, which stays constant through the tenure, or a floating rate, which moves with the lender's benchmark rate. Fixed rates offer predictability; floating rates often start lower but can rise or fall over time. Ask your advisor to show you both scenarios over a 10 and 20 year horizon before deciding.

2. Processing Fees and Hidden Charges

Most lenders charge a processing fee, typically a percentage of the loan amount, along with administrative or legal verification charges. Ask for a complete, itemised list upfront — some charges are negotiable, especially if you're a strong applicant with a good credit score.

3. Prepayment and Foreclosure Terms

If you expect a bonus, inheritance, or salary increase, you'll want the flexibility to prepay part of your loan without heavy penalties. Under RBI guidelines, floating-rate home loans to individuals generally can't carry prepayment penalties — but always confirm this in writing for your specific agreement.

4. Loan Tenure vs Total Interest

A longer tenure lowers your monthly EMI but increases the total interest you pay over the life of the loan. Run the numbers on a few tenure options — sometimes a slightly higher EMI over a shorter period saves you a significant amount overall.

5. Property Verification and Legal Clearances

Before disbursement, the lender verifies the property's title and legal status. As the borrower, it's worth doing your own due diligence too — confirm there are no pending disputes, and that all approvals (like RERA registration, where applicable) are in place.

6. Insurance Requirements

Many lenders bundle a home loan insurance or property insurance policy with the loan. Understand whether this is mandatory or optional, what it covers, and whether you can choose your own insurer instead of the lender's bundled option.

7. Co-applicant and Ownership Clarity

If you're adding a co-applicant (common for improving eligibility), make sure the ownership structure on the property documents matches what both parties expect. This avoids disputes later, especially in cases of resale or inheritance.