Wednesday, 28 September 2016

Home loan-opening new horizons for potential buyers

Having an own house is like having all the security in the world and most importantly peace of mind. However, due to growing property rates in our country, it becomes difficult to single handedly purchase a house with just the regular savings. Unless and until you avail a home loan, it’s almost next to impossible. With the right kind of a home loan, you can not just have your own dream house but do not have to fall under the burdens of traditional finances. Money is no longer a barrier when it comes to buying affordable properties in India. All thanks to the growing housing finance companies and lending bodies, all types of loans can be now availed with low interest rates by people belonging to all income groups. Government banks have been in the market for ages as a reliable loan availing source. Recently, there has been a noticeable growth in the number of banks and finance companies offering housing loans. Home loans are offered under a variety of categories which include:

Home purchase loans: These are the types of loans that are availed to purchase a new house/property/plot.

Home extension loans: These can be availed for extension or expansion of an existing house.
Home improvement loans: People who wish to implement repair work and renovation of their existing house can apply for a home improvement loan.

Home construction loans: Government as well as non-government banks offer these type of loans for constructing a new house.

Bridge loans: People who want to sell their existing house and buy a new one, but are running short of money for the same can avail a bridge loan to bridge the gap of the remaining capital.
Home conversion loans: People who have already availed a home loan to purchase a home but wish to shuffle to some other loan and require additional capital for the same can opt for this loan type. The existing Home Loan India gets transferred to the new home along with the additional amount needed.

Balance transfer loans: In case you feel that your bank is charging too high rate of interest at any point of time, you can transfer the remaining EMIs to another bank where they charge less rate of interest.

Land purchase loans: As the name suggests, this loan can be used to purchase a brand new property/plot. The property can be later used for residential, commercial or industrial purpose.
Refinance loans: Refinance loans are helpful in paying any debt that you would have taken from your family, friends or relatives to purchase a house.

Stamp duty loans: A stamp duty is essential to avail a loan and these types of loans help to pay for the stamp duty charges.

In our country home loan interest rates are offered based under two types: fixed or floating way. In a fixed rate of interest, the interest paid throughout the tenure remains same, while in a floating interest rate scheme, the ROI fluctuates as per market dynamics. So in this case, the borrower may get to enjoy low interest rates and at times may have to pay higher interest rates as compared to the competitive ROI offered by lenders as a result of a floating interest rate scheme.

Saturday, 24 September 2016

A guide to Home Loans Prepaymenst

A home loan or a mortgage is big responsibility that an individual has to bear in his lifetime and it is big commitment to make for at least a span of 15-20 years. As a home loan borrower you have gone through all the trouble of comparing home loans and have probably selected from the best and low interest home loans in India. However, it is a debt that bears on your mind always and you want to go ahead and prepay it ahead of its scheduled tenure.

Deciding to prepay your home loan is a great step ahead for you financially and will also help you improve your credit score. However, you have to go through the prepayment process step by step and make sure you attain proper closure, so that no problems crop up in the future. Here is a step by step guide that will help you prepay your home loan.

Let your lender know about your decision

The first thing you need to do if you have decided to foreclose you loan, is let your bank know about your decision. You will need to make a written application and follow a verification procedure. Along with your cheque book, through which you will make a full and final payment, carry all your identification documents such as photo id proof, loan agreement and the likes and go prepared so that there is nothing amiss on your part. Some banks may also ask you for the source of funds by way of which you are making the prepayment. So just to be sure, carry 6 months of bank statements and salary slips as well.

After the payment is done

After your payment is done, you will be given an acknowledgement of payment. This should clearly mention that there is no principal outstanding or balance payments after you loan has been prepaid. This document should also be stamped and signed by the bank. The bank should also give you a No Objection Certificate NOC or NC at this stage, in which it is clearly stated that the lender does not have any interest in the property any longer. The NOC or NC should carry details like you name, address, home loans account number and the beginning and the closure of the loan.  Apart from this, in case of unused postdated cheques that you may have given to the bank must also be collected to avoid any chances of misuse.

Collect all your original documents from the bank

Once you have cleared the entire loan amount, it is time for you to ensure that you get back all the original documents you had submitted to the bank in proper condition. Scrutinize all the documents and ensure that all the pages are in order. In some cases, a page of sales deed may go missing and it will be a tedious task for you to get replaced. So before you sign the acknowledgement from the bank, make sure all the originals are in order. It is therefore a good idea to visit the bank, to collect your documents in person rather than asking the bank to send them by courier.

New documentation requirements

Once your payment procedure is complete with your bank and you have the NOC in hand, you must obtain an encumbrance certificate or a EC from the Registrar. This is a document that reflects all the financial transactions that have been done on the property. Post the prepayment completion, your EC should therefore reflect the closure of your loan. This completes the home loan prepayment procedure for you. However, if you plan to sell the property soon after you have prepaid the loan, it is a good idea to get a legal clearance certificate. A lawyer whom you engage for this purpose, will also help you check whether the closure of the mortgage has happened as scheduled.

Update of CIBIL records

Once you have cleared your entire loan and have the acknowledgement of the same from the bank, the bank must update the details of the closure of the loan with CIBIL, the premiere credit bureau of the nation. This is of immense significance for you, as the closure of your loan ahead of time is an achievement and is a chance for you to increase CIBIL score. However sometimes lenders are not as prompt is sending across the details of a closed loan account to CIBIL, so the onus is on you to follow up and ensure that this happens.

You may have to check with your lender once or twice to ensure that the details have been sent from their end. Once the details have been sent, it will take CIBIL 20-30 days to update their records and for the impact of the same to show up on your CIBIL score. Wait it out for a month or two and then pull out

your CIBIL report and CIBIL score to ensure that the details of the foreclosed loan are indeed there on your CIBIL report and your financial health is in perfect order. It is important to make an attempt to improve CIBIL score continually as it is a measure of your credit health.

A mortgage is a big debt that needs to be serviced over a long period of time. If you have the means to prepay it, it is a good idea to do so, as it frees up your funds for other investments in the long run. But as we specified in this article, just having the intent to foreclose your home loan is not enough. You must ensure that you go through every a for-mentioned step to obtain full and final closure on your home loan. 


Tuesday, 20 September 2016

Home Loans Calculator

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Monday, 12 September 2016

The Secret Behind Getting The Best Housing Loan

Everybody dreams of the perfect home in which they wish to live in some day. When the time is right, you can easily build or purchase your dream home. However, in today's world, with rising real estate values, it is nearly impossible to purchase your home with your own funds. With the housing loan, you can easily purchase your dream home in mere days and pay off the amount as per your ease and comfort depending on the home loan interest rate you have selected. So what is the secret to get the best home loan deal? Discover them and use it to your advantage.


Your eligibility plays an important role in determining your housing loan. There are certain factors that influence your chances of getting the advance credit amount you require. One such factor is your income. Normally a bank will keep the EMI to income ratio at 30 to 40%. If you opt for a joint income the percentage will change. Also, if you have additional loans to pay off, you eligibility will come down to match the EMI and income ratio. The tenure also plays an important role. The longer is the tenure period, the more is your eligibility. Another factor is the interest rate. If the housing loan interest rate is high, then the eligibility is lower. This also works vice versa. Once you satisfy the criteria for the eligibility, you can get the financial credit amount you require.

Interest Rate:

The interest rate is one of the important factors that influence your housing loan and monthly EMI. There are three types of home loan interest rates you can choose from, namely, fixed, hybrid and floating interest rate. Fixed rates are stable and higher than any other rates in the market. But, floating home loan interest rates are fluctuating all the time. With hybrid loan, you can choose to repay a part of loan with fixed rate and other part via floating interest rates. The floating rates are the lowest. Thus it is an ideal choice at the moment.

Banking Institutes:

There are various banking institutes that offer different rates and offers. Some of these offers will suit your needs but with a longer duration, while others will provide a tight deal, but with a shorter period of repayment. Before you apply for the financial aid, always do a comparison of all the offering by the different banking institutes. See what they are offering, short term as well as long term. Additionally, if you have a previous relationship with the banking institute, you can always negotiate the rates too.


Thursday, 8 September 2016

Home Loans - Right Approach to Become a Homeowner

Each one of us wishes to possess a home of our own. With some pounds in your savings accounts, it won't be possible to purchase a house that requires a big investment. If you dream to own a home, home loans are the best way to finance your dream.

Home Loans 

Home loans are offered against the equity in ones home. Equity can be defined as the value of the home after deducting outstanding mortgage amounts and other loans. Lenders take various factors into consideration while calculating the home equity such as location of the home, the structure etc. The loan will be secured on the borrower's home and the transaction will not impact existing mortgage in any way.

A home loan is basically taken to purchase or to construct a new house. Borrowers can also use it to make home improvements, consolidating their existing debts, to buy a luxurious car or for any other personal purpose.

The loan proceeds of a home loan can supplement both mortgage and secured loans. Homeowners can put their existing house or real estate as a collateral to get finance to purchase a new house. However, if you are a tenant you can put the new house as a collateral to get a home loan.

There are various benefits attached with the home loan. Home loans offer larger amount loan with a longer repayment term. Home loans offer you the opportunity to borrow a loan for any amount ranging from £3000 to £500,000. Home loans can be repaid over a period of 5 to 25 years depending on the amount you borrow.

Home loans cater to UK residents with different loan options, which make it easier for borrowers to repay the interest on the loan in the most comfortable and convenient manner. Annual percentage rate or APR is the term used to denote the rate of interest. Home loans give borrowers the option to pay either fixed interest rate or adjustable rate interest rate on the money borrowed. Fixed interest rate option implies that interest rate will remain the same throughout the life of the loan. While an adjustable interest rate would imply that the rate of interest would change periodically with the corresponding fluctuations in an index, with which it is attached.

This interest rate is also known as variable rate home loan.
A borrower can also opt for interest-only loan option. An interest-only loan gives borrower the opportunity of paying just the interest or the interest and as much principal as he wants in any given month during initial period of loan. If you choose this option, your monthly payment will be lower than in case of an interest and principal repayment option.
There are various loan providers in the finance market. They may devise ways to overcharge borrowers who are not much conversant with the ways of the market. Interest is generally charged on the higher side, and borrowers also have to shell a larger sum as fees for the services of the lender. Thus, a few efforts on your part can save you from paying higher interest or huge fees to lenders.

First of all, find out your credit score. Credit rating agencies such as Equifax, Experian or Transunion can help you get your personal credit report. Knowledge of credit score can help to grab good rates in the market.

Next thing you must do. Search for lenders who provide home loans. You can apply for a home loan online too. Applying for a loan online makes it more convenient to get a fast and cheap home loan. Saving your time and helps you find the best deal at best rates. Most of the lenders provide loan quotes to borrowers, which are free or carry nominal fees. Collect loan quotes from lenders and compare them to find the best home loan.

Dream to own a home can come true with a home loan. Homebuyers are urged to search for home loan providers and gather as much information as possible, so that they can do comparison and shopping with an idea of what they want, can afford, and can qualify for.


Wednesday, 7 September 2016

Five ways to save home loan

IDBI Bank home loans come with higher eligibility and lower EMIs at attractive interest rates. Fulfill your dream with IDBI home loan.
Home Loan 

Tuesday, 6 September 2016

7 Tips to Help Save Interest on Your Home Loan

Here are 7 tips on to save on interest by paying your home loan faster.
Home loans
Owning a home is one of the most common aspirations among people from all walks of life. No matter what his status in life is, every person will give anything just to be able to build a home for his family.
There are people who have been blessed with a fortune so they can easily build not one but even two or more homes for their families. Some people who have made it their life aspiration to own their own homes manage to fulfill their dreams by availing of a home loan.
Owning a home through a loan is not an easy task because first of all, the person has to have a good credit history. He has to find a suitable mortgage provider that can give him the amount he needs to buy or build his home. Not only that; he also has to choose the best home mortgage he can get to maximize his financial resources.
Before finalizing his application for a home loan, any borrower should evaluate his capacity to pay off his loan for a specific period. Loan providers prefer to give long term loans because this is how they make money. Every borrower should choose a pay-off period that is advantageous to him.
There are advantages and disadvantages to getting a long term home loan. A long term long can be beneficial to the borrower because he can negotiate minimal monthly payments for his home loan. This would be advantageous for him especially if he can negotiate a home loan with a fixed or locked interest. However, this can also be disadvantageous for him if the interest rates go down.
On the other hand, a long term loan can be disadvantageous for the borrower if the interest rate is not fixed and sudden economic factors cause a notable increase in interest rates. Getting a long term home loan can also be more expensive because while the repayment term is long, the total amount mortgaged can be twice or even thrice the principal amount loaned depending on the terms of the lender.
In general, paying off a home loan the soonest possible time would be more beneficial to the borrower. For one, he is assured that he owns his home without worrying about the property being forfeited and in effect losing all his investment.
1. Read and review the terms of the home loan agreement, Check all the
Financial and pay off terms to make sure the loan is not totally onerous for the borrower. Calculate the total amortizations you have to pay and choose a term that you can easily pay off in a monthly or quarterly period.
2. Always make the home loan amortization a priority when it comes to budgeting. When the family income comes in, the borrower should always deduct that amount needed to pay off the home loan amortization to make sure it is not spent on other expenses.
3. Ask the loan provider if a rebate is given for early or on time payments. Some lenders give a rebate every time the amortization is paid on or before the cut off date. The savings you will get from paying early can be given to the lender as an advance home payment. The amount may be meager but it will add up and will later lessen the paying period.
4. Allot a percentage or better yet, apply all the bonuses and other financial gains to the home loan payment. This will be considered as an advanced payment and will get you a breather in case there is an emergency and the money for the home loan is used for a more important expense like health emergencies.
5. Always be vigilant abut how the interest rates go up and down. When the interest rates fall down substantially, refinancing the home loan may just be the best option. However, make sure that the refinancing scheme will lessen the financial burden on your part.
6. Encourage family members to take on extra work or projects to add to the family income. The benefits of owning a home will redound to the whole family so it is important to make the members aware that pitching in home loan payment will always work for the benefit of the whole family. Each member who gets and extra income can allot a portion of that income to paying off the home loan. No matter how meager that extra income may be, it will add up and will help in paying off the home loan the soonest possible time.
7. Save, save and save. Owning a home is a project that requires the head of the family and even the family members to save and scrimp to pay off the loan fast. The family can help by saving on energy consumption or other household expenses. The savings from other household expenses can be used to add to the home loan payment.
For average income earners, only a home loan can make the dream of owning a home a reality. No matter how meager the monthly income is, there is always a chance of owning a home. However, the family should find ways to pay off the home loan fast so they can finally and totally own their home.
Pat Caymus writes about financial and loan related topics such as Home Equity Loans and other consumer related financial topics designed to inform people about personal loans, home loans and many other kinds of loans.