Parameters to consider while applying for home loans.

We are sure you’ll agree that buying your own house is one of the greatest achievements in life.  Thanks to the continuous efforts of government and private finance companies who have reduced the rate of interest as low as 8.50 to 9.50% to avail a home loan and has fulfilled the dreams of millions across the nation.

Under the PMAY-Credit linked subsidy schemes the rates have further dropped down to around 6.50% to 7% which makes home loans a viable product for many middle-class applicants in the society.

However, when it comes to sanctioning the home loans banks and non-banking finance companies (NBFCs) are quite strict towards having a background verification of borrowers. They give check various qualify parameters such as income source, age, property location, job or business stability, nature of work, credit history, etc. and then suggest a suitable loan amount.

Of these, the most helpful and promising one is the joint income source. Many times an individual might be looking for higher loan amount but due to a low-income source, he or she is unable to get higher loan limits. At such point of time, adding an income from your parents or spouse can help you get higher eligibility and fulfill your dream.

 Joint income source assures a stable source of money towards your monthly installments for the bankers and non-banking finance companies.  With a joint income source and good credit history you can negotiate for low-interest rates, and waiver of processing fees.

Apart from joint income source few other parameters that need to be addressed carefully before applying for home loans are as follows:

Existing Debt: Any existing debt you hold will bound to affect your credit score. It means you’ll get low loan amount against the required financial needs. Banks and firms consider your debt to income ratio when you apply for a housing loan so you need to make sure you clear off as many debts as possible in order to favor your housing loan lenders.

Savings: Ideally, the lender agrees to offer finance up to 80% of the agreement value of the home. Every bank or non-banking finance company will have its own eligibility criteria under which you need to show the margin money of 10-15% handy before you apply for home loans.

So, it is advisable to save at least 20% of the down payment and have little extra to cover few monthly installment on your loan.  Problems like a recession, health issues or other perils might grapple you anytime with no source of income for a while so it's better to be prepared to cover your expenses for a couple of months. This shows your well preparedness towards your housing finance.

Employment history: When a person is working in particular firm or job for more than 2 years it shows better stability for your income source and lenders will be willing to have quick loan sanction.

In case you’re applying for a loan then don’t consider to quite, change your job. Instead, hold on your horses until your loan gets approved.  Alternatively, if it’s a business then they will check your IT- papers and other required documents to prove its stability.

In India, there are various types of customized home loans to choose from. Always choosing the first one is not an intelligent option. Instead, there are online sites that will help you compare the interest rates, pre & post penalty charges, EMI delay charges, interest rates and flexible repayment options. So, visit online and compare your loan. Also, you need to know how much you can afford it.

It would be best, to check online through housing loan eligibility calculators what amount you get pre-qualified for a loan. It helps you understand how much you can afford a home and about the mortgage payments would come up to. With internet-based services, time is spinning across compared to an age-old process of visiting banks, filling up forms, getting copies attested and submitting them. With online service, you can fill the relevant form, attach a scanned copy of relevant documents and submit the same online for approvals.

Expense-to-income Ratio: The expenses of the borrower should not shoot up higher than 50% of his or her income. Else it’s become difficult to avail a loan. Lender's assessed’ borrower’s repayment capacity with factors like income, asset, liabilities and job stability.

Credit Score: It plays a crucial rule in measuring the borrower’s creditworthiness. It builds a trust factor in lenders that you’re a regular payer and pays all your dues’ on time. A lending firm may not consider an applicant whose credit score is below 750.

It’s simple the closer you get to the loan eligibility parameters, better are the chances of availing higher loan limits. Visit online, compare and apply for home loans, now!

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Affordable home loans is the jingle now.

When you type home loans rates in the search engine, it’s apparent that you are planning to buy a home you were waiting for so long. But stuck with the dilemma of what type to choose and when to choose. Since few years we have seen that the interest rates have come down drastically making home loans affordable for many of us. But, being budget loving people we are still sitting in the fence for the rates to come down more, right? It’s an advice for you, us & all who are willing to join the bandwagon of home loans, that if there is steady flow of income to absorb the EMIs then it’s the right time. Because, though the rates are the lowest in home loan history, but the property prices are also making history in touching the sky.

The home loans rates that you typed in your Google search bar is responsible for the home loans being affordable. Earlier people used to pay 15-18% of home loan interest rates, which made the EMIs burdensome and kept most of the people away from buying the property. Nowadays with developing market conditions and flexible government policies the rates are coming down to 8.35-9.50%, what a wonderful scenario for the common men, isn’t it? Now you, we and all who have a stable job to pay the EMIs regularly, a good credit score and funds to make the down-payment & processing & other miscellaneous fees can create our own place. Many financers have walked extra miles to celebrate & motivate women empowerment has cut down the home loans rates by .05%. They made the loan process easier for the female borrowers owing to their credibility and responsible nature.

The home loan interest rate depends on factors like the base rate, the credit profile & loan amount. The base rate is determined by the financial institute and the government policies which fluctuate in case of the adjustable/floating rate of interest. The other part is determined by the credit score the borrower has and the loan amount he wants.

The credits score is a crucial factor that can make you get a loan, or can get your application cancelled. If the credit score is good and near to 900 then be sure that your credibility would be appreciated and your demands would be entertained by the financer as long as it is within the limits of RBI guidelines. You can get the lowest interest rate offered by the financer; you can get the maximum amount of the loan money for the selected property depending on the loan slab of the organization.

When you are applying for the home loan you get to choose from the fixed, adjustable and semi-fixed rate of interest. In case of fixed rate of interest, you have to pay a fixed rate of interest all through your loan term. It is bit higher than the adjustable rate of interest but give you a stable budget.

In case of floating/adjustable rate of interest your rates vary depending on the market condition & government policies. It is generally lower than the fixed rate and saves you a lot in interest cost.

The third type is the combination of fixed & floating, it is termed as semi-fixed or truly fixed rate. For a committed period of time the rate is fixed, after that the rate converts to floating rate.

Hope this article served your purpose for typing home loans rates to choose your home loan and interest rate. For tip, choose a financer that is RBI authorized to enjoy maximum benefit without any hassle.

Advantages of switching Home Loans after Interest Rate Cut

The New Year brought in a reason to rejoice for house loan borrowers. The home loan interest rate saw a further dip and here’s what’s important to note.

How do the old borrowers benefit?

The old borrowers who have been servicing their EMIs based on the erstwhile base rate system of lending are the main beneficiaries of this interest rate cut. They now have a stronger reason to switch to the MCLR – based lending, even though the base rate hasn’t come down as much but the difference between base rate at which old borrowers are servicing their loan and the current MCLR is widening.

Why should you switch?

The benefits of RBI rate cuts have been given rather sluggishly to borrowers, which is the main reason to switch from base rate to MCLR.

What to watch out for?

The home loans interest rate at present seems to be in place for a certain period of time. The only disadvantage could be the interest rate cycle turning. There is always a risk of an upward movement of interest rates before reaching the reset period.

What are the options for base rate borrowers?

The tenure is automatically reduced when the interest on your loan goes down, thereby, transferring the benefit of lower rate to the customers.

The base rate borrowers now have two options – switch to MCLR based lending with the lender or else, transfer. One may also continue the loan on base rate, especially if the loan term is nearing the end.

The switch to MCLR by base rate borrowers is allowed by RBI. The existing loans can run till maturity or borrowers can switch to MCLR on mutually agreed terms.

Switching in the lending institution

In case the difference between what you are paying and what is being offered now as MCLR is significant, it makes sense to switch. Also, in cases where the home loan tenure is still away from closure, it’s sensible to make a home loans balance transfer.

Switching to another lender

If you are being offered a high housing loan interest rate (MCLR plus spread) then look for refinancing. In such a case, get the loans refinanced from a lender offering a lower interest rate and make a home loan transfer. Also Read: Your Checklist for Home Loan Transfer

Switching to MCLR in itself should help you save a substantial amount. In addition to switching the loan from base rate-linked to MCLR and thereby saving interest, prepare a systematic partial prepayment plan to further reduce the interest burden. Therefore, it is advisable to analyse and switch your existing home loans provider whenever there is a home loan interest rate cut.

{Source: www.indiabullshomeloans.com/blog/advantages-of-switching-home-loans-after-interest-rate-cut/}

Types of Home Loans

Being a home owner is everyone dreams. With the increasing demand for a room of one’s own, the popularity of home loans has gone up. Banks, financial institutes and NBFCs offer a variety of home loans. With low rates of interest, affordable EMIs, manageable tenure and tax benefits, home loans are high in demand. Home loans are not limited to buying a house or a property; it can be used for home improvement, buying land to build a house of their own design, renovating, expanding, etc.

The types of home loans available to customers these days are as follows:

1. Land purchase loans: Land purchase loans are to be taken when you are buying a plot of land, on which you wish to construct a house. Banks offer land purchase loans which are up to 85% of the cost of the plot, irrespective of whether it is for residential or investment purpose. Based on your age, the maximum tenure for this type of loan is 15 years. Anyone, who is above 21 years of age and has a regular income, is eligible to apply for this loan. Usually, the amount of loan sanctioned for land purchase tends to be lesser than the loan for purchasing a house.
2. Home purchase loans: Home purchase loan is the most common and the most popular type of loan sanctioned by, almost, all the lending institutes. It is used to purchase a new residential property or an old one from previous owners. Lending institutes grant up to 85% of the market value of the house. The rate of interest on this loan varies from fixed, floating and hybrid.
3. Home construction loans: A home construction loan can be availed when you wish to construct a house rather than buying a pre-constructed one. The loan application process for this type of loan is slightly different from other, related home loans. The approval also depends on different parameters. The points to remember while applying for this loan.
4. Home expansion/extension loans: Home expansion or extension loan is perfect when you wish to expand any house owned by you. It includes changes in structure, adding extra space, dividing a big room into two smaller ones, adding a low attic, enclosing balcony, making a bigger bathroom and many such alterations that utilise the existing house area. This loan can also be sanctioned as a part of home improvement loan. It depends on how the lending institute categorises it.
5. The home expansion loan amount constitutes 70% to 85% of the total cost of expansion. The parameters considered while granting this loan are same as those for other types of loans, credit history, annual income, tenure, etc. The rate of interest for this type of loan can be floating or fixed, as agreed with the institute.
6. Home improvement loans: Home improvement loans are quite different from home expansion loans. Home improvement loans are sanctioned for internal and external painting, repair work, electrical repairs, plumbing, water-proofing, adding underground and overhead tank, flooring, tilling, etc. With a maximum tenure of 15 years and rates of interest ranging from 9% to 11%, these loans cover up to 80% the cost of renovation and repair work; perfect when you want to tweak the house for upcoming festivals, weddings and special events.
7. Home conversion loans: If you have already purchased a house by taking a home loan, but have changed your mind and wish to buy another house, you can choose home conversion loan. It simply means that you can transfer the current home loan over to the new home, without the need for repaying the loan on the previous home. While extremely beneficial in a rare case, this loan is very expensive and can cost you a lot.
8. NRI home loans: This is a specialized home loan variant, developed to help Non-Residential Indians to buy residential property in India. Even though the formalities and process for NRI home loan application is similar to regular home loan application, the paperwork involved is quite extensive.
9. Balance transfer loans: When you wish to transfer your home loan from one bank to another, you can choose for the balance transfer option. The balance transfer can be an option for various personal, professional and financial reasons. For instance, when you want a lower rate of interest than what you are getting at your current or you are displeased with the customer service you are receiving at your current bank.
10. Stamp duty loans: A stamp duty loan is rarely opted for, with majority of customers remaining unaware about it. It is sanctioned solely for the purpose of paying off the stamp duty charges on the purchase of a property. The loan amount is much lower for this type of loan as the stamp duty is, usually, in the rage of 4-5% of the cost of the property. Experts advice to pay the stamp duty and registration fee upfront instead of taking a loan to pay them.
11. Bridged loans: A bridge loan is a short term loan granted when you wish to buy a new house, while already owning a residential property. Typically, it is used to fund the purchase of your new home till you find a buyer for the old home. The tenure for this type of loan is less than two years and requires you to mortgage the new home.
12. Refinance Loan: Refinance loan is similar to the practice of debt consolidation, but specifically, for home loans. Herein, you take this loan to repay your friends, relatives and private lenders, from whom you have borrowed for the purpose of buying your current home.

{Source: blog.loanbaba.com/types-of-home-loans/}

Suit yourself: How to choose which home loans suit you best?

While home loans are easily available, it is essential to avail of the one with the lowest interest rate, thereby saving money. Important criteria such as loan percentage, lowest fixed and floating interest rates, availability of prepayment option, special concession for women and senior citizen etc, will help people to choose the home loan best suited for them.

Taking a home loan in present day has become very simple due to more banks and private lenders offering flexible interest rates and various budget options. In this wide market, it is important for one to do their research and choose the one which allows them to save the most money. Every year, banks launch new home loan schemes and introduce loan options which suit the economic trend of the country. Public sector banks will not raise the home loan interest rate as they are pressurized by the finance ministry to protect the home loans borrowers.

Four ways in which you can identify a good home loan scheme are:

1. Check the percentage of loan offered: One can decide which is the best home loan based on the percentage of the home loans offered. If one bank is offering 80% of the amount required to buy the house and another is offering 85%, it makes sense to choose the latter. This is helpful only if you are unable to afford large sums for down payment but subsequently, your EMI will increase in the percentage amount offered.
2. Analyze the interest rates and prepayment charges: The smartest way to save on home loans is to choose one based on the rate of interest and free processing offered. Checking for the EMI, prepayment charges and processing fee and looking at comparative rates are good ways to sift through to the best home loan offers. According to the RBI, banks are not allowed to collect a prepayment charge from home loans borrowers for floating interest rates. It is also easy to change the loan from one bank to another along with the transfer of balance.
3. Consider loan process and time involved: The process of applying for a loan is a lengthy procedure and requires the submission of many property and income related documents. The time taken for the application to be considered and the loan to be disbursed differs from bank to bank, but this time should also be taken into account when considering a loan. Apply to a bank which has a simple process and saves time with better schemes. While there are agents who can guide you through this process, it is not possible to gauge their credibility. Researching can help you find the best home loan schemes which take the least amount of time. Applying for a loan online would also reduce the amount of time it takes for the loan to be approved.
4. Special concession schemes: Some banks would offer special concessions to senior citizens and women which would save them a considerable amount on the interest rate. LIC housing finance offers a 10% special interest rate for female borrowers in comparison to the normal 12.25% offered for others. People could also look into different kinds of loans such as hybrid loans, joint loans, etc.

Choosing the best home loans scheme would mean that you would save money in the long run. When the plan is suitable to your financial conditions, it also reduces the stress induced by taking a home loan.

{Source: https://www.indiabullshomeloans.com/blog/suit-yourself-how-to-choose-which-home-loans-suit-you-best/}

Joint home loans: To do or not to do?

We have all heard of home loans haven’t we? The banks take into consideration the eligibility criteria before sanctioning a loan. A borrower must be at least 21 years of age and at most 60 years of age to avail a loan. However the age criteria vary from bank to bank.

Also the borrower must have a high CIBIL score, usually above 750 to be within the eligible bracket to receive a loan. Once the borrower is proved eligible, he/she is entitled to a maximum loan amount of 60 times his/her monthly net income. For example if Mr. A who is 30 years old earning a monthly income of Rs. 80,000/- applies for a loan, he will be entitled to an amount of Rs. 48,00,000/-.

What if Mr. A is looking to buy a flat worth 1.5 crore? So where does he acquire the balance from, to pay for his house? This is where joint home loans come in. He can take joint home loans with his spouse, sibling, parent or son. The one who jointly takes a loan with him is called the co-applicant.

The banks then take the joint monthly income of the co-applicant and the borrower and club it as one, increasing the loan amount the borrower and the co-applicant are entitled too. This means that the co-applicant also has the responsibility for the repayment of the loan. This indeed will make it far easier for Mr. A to buy the flat that was always on his mind. The borrowers can claim the interest paid on the loan as a deduction under section 80c in the ratio of the interest paid. However if the co-applicant has a poor CIBIL score, the banks will not consider his/her score and the amount the borrower is entitled to,won’t increase.

Usually there is a lot of ambiguity between the definition of a co-applicant and a co-owner. A co-owner includes the owners of the concerned property to be purchased. A Co-applicant is the person who jointly takes a loan along with the borrower. Banks insist all the co-owners be co-applicants mandatorily. On the other hand, co-applicants don’t necessarily have to be co-owners.

It is always better to go in for a joint loan, if the loan required is exorbitant. One should keep in mind that a higher loan is accompanied with a greater interest over a period of time. On the other hand, if the borrower has the capacity to make a huge down payment, he shouldn’t go for a joint loan and must opt for single home loans, thus saving on the total cumulative interest and the risk to pay the bank more.

{Source: https://www.indiabullshomeloans.com/blog/joint-home-loans-to-do-or-not-to-do/}

The problem with home loans.

The latest in Reserve Bank of India’s measures to protect customers with home loans is a proposal to change the way banks determine their `base rate’ – the benchmark for all floating rate loans. The need for a re-look arose because customers have been complaining of a raw deal in pricing.

In recent years RBI has taken a number of measures to provide a better deal for home loan borrowers. The introduction of base rate ensured that banks do not reduce rates only for new customers by playing with the interest spread. In the past banks could play with the spread as they would lend below the prime lending rate (their earlier benchmark) for new customers while old customers continued to pay over the PLR.  This was not possible with the `base rate’ which was also the floor rate for pricing. In June 2012 RBI forbade banks from imposing a penalty on pre-payment of home loans irrespective of whether the loans were being refinanced or repaid. This made it possible for disgruntled borrowers to move away to rivals if their loans were not re-priced when interest rates were falling.

But there are a number of areas RBI could look into as part of its consumer protection initiative. Here are a few.

Compulsory Insurance: Banks have an interest in the property mortgaged with them and they need to ensure that it is protected against any eventuality. At the same time banks also gain by selling insurance policies.  But what need to be insured is the cost of construction and not the cost of land. A 1000 square foot house may cost Rs 2 crore in Mumbai but the cost of construction would be around Rs 20 lakh. So there is no need of buying property insurance for the whole loan amount. Yet many banks insist that the buyer pay 15-year insurance premium upfront based on the market value of the property rather than the construction cost. Also in cities like Mumbai, the property is owned by the cooperative society which is required to insure the property. It is therefore not clear whether the bank’s insurance policy will pay a claim when the housing society is also making a claim for the property damage.

Non-intimation of interest rate changes:  Most home loan borrowers focus on the interest rate at the time of availing home loans. But floating rates are dynamic and vary from time to time. The borrower is not aware of this because while rates vary, the equated monthly installment or EMI does not. Banks merely change the tenure of the loan. So in a rising interest rate regime it is not unusual for borrowers to find that their principal loan amount is unchanged even after years of repayment.  Very rarely does a bank communicate to the borrower changes in interest rates.

Notice of intimation of mortgage: In Maharashtra the government has made it compulsory for all mortgage interests to be registered. This is aimed at preventing fraudulent sale of the property even as a loan is outstanding.  While the objective is laudable, the trouble is with the process. Although the law actually protects the bank’s interest lenders have shifted the onus on the borrower.  Rather than use their institutional clout to facilitate smooth registration, borrowers are forced to approach agents and spend a few thousands to complete this process.

No refinancing of existing loans:  Lenders often poach from home loan borrowers of other institutions. But when it comes to their existing customer they do not offer them the benefit of new rates.  If there is a special scheme running in the bank, existing borrowers are not informed of it. Also banks charge customers a processing fee even when their loan is refinanced within by their own bank but under a different scheme.

Complex pricing: Some banks have resorted to complicating the pricing of home loans introducing interest free years in middle of the tenure of the loan. Innovation in financial products is good only as long as they do not obscure pricing. Borrowers need to have the opportunity to compare the cost of one home loan against another.  One way to make the pricing transparent is to disclose the cost in the form of annualised yield to the lender based on prevailing rates.

{Source: http://blogs.timesofindia.indiatimes.com/small-change/the-problem-with-home-loans/}

5 Things to Know before Signing on as a Home Loan Guarantor.

Acquiring a new home has to be one of the most momentous milestones in life. Apart from the security it offers, a home can be considered an invaluable asset in terms of overall net worth. However, purchasing a new home can be financially taxing and real estate prices rarely decline to fit into the budget of the average Indian.  This sustained rise in property prices has been one of the key drivers of home loan applications and disbursements across India.

The bulk of the Indian population can be usually grouped into the middle income bracket with salaried individuals as one of the key groups that apply for home loans. As such, a home loan may be the only option that the average person can use to purchase a property. Opting for a home loans means that the homeowner can slowly, over a period of approximately 20 years, repay the loan through monthly installments or EMIs. This in turn would save him or her from having to compromise their personal liquidity / savings, while allowing them to realize the dream of owning their own home.

Role of a Guarantor in Home Loan

Home loan providers have quite a long list of terms and conditions which borrowers need to meet in order to be eligible for a loan. There are cases where, even if the individual borrower meets the eligibility criteria outlined by the lender, he or she might be asked to have the loan document undersigned by a guarantor.

Lenders usually ask borrowers to enlist a guarantor in the following cases:

• If the amount to be borrowed is beyond a certain limit as per bank policies
• If the borrower has relatively weak financial standing i.e. a low credit score
•  If the borrower’s credit history is not particularly clean i.e. previous loan/credit card debt settlement
• If the borrower is employed in a high risk job or is at an advanced age
• If the borrower is self employed or earns less than a pre-determined minimum income level

Banks and lending institutions generally ask a borrower to have a guarantor undersign loan applications in order to ensure that the loan can be paid back, especially in case the primary applicant defaults.

Things to Note before You become a Guarantor

As a home loans guarantor, you need to ask yourself a few questions before you commit to undersigning the loan document. Once you sign the papers, you will be legally liable to repay the loan in case the actual borrowers fail to repay the loan amount due.

1. Are you signing on as a financial or non-financial guarantor?Lenders usually ask the borrower to identify the guarantor as either a financial or non-financial guarantor. A non-financial guarantor is kept on the records and only acts as an alternate contact for the bank in case the primary applicant cannot be reached. However, unlike a financial guarantor, a non-financial guarantor is not held financially liable for any failure to repay the home loans on the part of the borrower
2. What obligations are you accepting as a guarantor?The obligation of a financial guarantor is usually limited to repaying the outstanding home loans along with any interest and late fees due, in case the lender fails to honor the debt. The law is also of the opinion that this should be stringently enforced, especially if the primary borrower is identified as a willful defaulter.
3. Does undersigning as a guarantor have any impact on your own loan eligibility?As far as lenders are concerned, the extent of your liability as a financial guarantor is equal to that of the primary borrower. Therefore, as far as credit histories are concerned, any defaults or late payments made against the mortgage by the primary borrower will have an impact on the guarantor’s credit score, making him or her look financially unstable.
4. What is the tenure of the home loan?Although it does not seem to have any direct co-relation with the guarantor, the term of the loan is important in the sense that the guarantor will remain liable till the loan is completely paid off. Once the loan is repaid in full, the guarantor will need to seek a no objections certificate (NOC) and a release of guarantor ship from the lender to complete the process.
5. Are you financially secure and aware of the terms of the loan as a guarantor?Although it might seem obvious, you as the guarantor need to be sure of your own financial standing before assuming the responsibility of being a guarantor in case of another person’s loan. You need to begin by assuming the worst and using that to figure out if you are capable of making the home loan EMI payments in case the borrower fails to make his. Moreover, you need to be completely aware of the terms and conditions outlined by the loan document so as to be on top of the situation at all times.

{Source: http://www.paisabazaar.com/home-loan/articles/9789-5-things-to-know-before-signing-on-as-a-home-loan-guarantor/}

10 Secrets to get a perfect home loan.

Although anyone who is above 21 years of age and has a good CIBIL score can apply for home loans, there are a few secrets to get the best loan at the best price.

1). Eligibility: To increase your home loans amount, you can take a joint loan with your spouse. The monthly income of you and your spouse is added and taken as one by the bank. This results in a higher loan amount sanctioned in your name.

2). Negotiate: Don’t leave any stone unturned. You are purchasing a house. Do all you can to get the best rate from the bank? Use your negotiation skills and get a better rate of interest. Try negotiating towards the end of the month. The sales personnel may just give in to achieve their sales targets for the month. This could be your best leverage.

3). Fixed or Floating: There are essentially two types of interest rates attached to a loan. A variable (floating) rate of interest will fluctuate depending on the market conditions. Fixed on the other hand will remain fixed irrespective of the market conditions. Ideally if the interest rates are predicted to go up in the future, go for a fixed interest rate for your loan. If the interest rate is predicted to fall, go for a variable interest loan. Statistics show variable interest rates to be better and the borrower ends up paying less.

4). Investments & Savings: In today’s costly world, expenditures are skyrocketing because of inflation. Try to save more and make bigger down payment. This will reduce your loan amount and will lower your EMI. The banks will then categorize you as less risky and this will lower your rate of interest on the loan, benefitting you. Also try and invest some money in government bonds. This could help you offset your EMI interest on the home loans.

5). Duration: This, de facto is a very essential element in a home loans. The lesser the duration of the loan, the lesser you pay overall. Similarly the longer the duration of the loan, the more you pay overall. If you do the math, you will notice the above to be true. Try to stick to a shorter duration.

6). Check for hidden charges: The cheapest is not always the best. Many a time’s banks reduce the rate of interest on loans to make it look more attractive. Look for hidden charges that banks won’t disclose at the outset such as the processing fees, legal fees, administrative fees etc. We have spoken about these hidden costs in detail in our blog here. Speak to the banks you have shortlisted and find out all the costs before hand and add it up. Then go about selecting the best bank.

7). Other Liabilities: This is a crucial element that escapes an individual’s mind. If you have other loans (ex: car loan), and you apply for a home loans, the net amount you will be entitled to will be less. The bank will deduct the EMI you have for your car from your monthly income and then decide the total amount you are eligible for. Try reducing the other liabilities before taking home loans. This will increase your chance of getting a greater sum.

8). Patience: This factor always pays off. Waiting for the right moment. Interest rates fluctuate with respect to the market. But there always comes a time when the interest rates are relatively low for a long period. Correctly predict such moments and take your loan then. It’s worth the wait now, isn’t it?

9). CIBIL Score: Do you know your CIBIL Score? If you have an account in the bank, you have a CIBIL score attached to your name. This score ranges from 350 to 900 depending on your ability to repay the loan amount on time. If you have a high score, usually above 750, you will get a loan without any issue. On the other hand if you have a low score you will not get a loan or even if you do, you will be charged a very high rate of interest because the bank categorizes you as risky. Pay your dues on time and improve your score.

10). EMI: Last but not the least; ask the bank to tell you the EMI you have to pay every month. See if you can manage the EMI along with your daily expenses. If you feel the EMI is eating a great proportion of your monthly income, increase the duration of the loan and reduce the EMI by a margin. Again the longer the duration, the more you end up paying. Try making the least costly choice.

Once you have taken care of the above essentials, you will be more than ready to Invest in your dream home!

{Source: https://www.indiabullshomeloans.com/blog/10-secrets-to-get-a-perfect-home-loan/}

Considering an NRI Home Loan? Bear these Five Crucial Points in Mind.

A lot of non-resident Indians who go abroad for business often plan to comeback someday. For these NRIs, an NRI home loan provides an ideal opportunity to buy their dream home back in India and gives them the ability to settle when they come back to the country. These home loans are given out by all major banks and can be requested by anyone who fits the description of an NRI, which is in general; a person who is an Indian citizen, holding an Indian passport, who stays out of the country for the purposes of business or work for an uncertain period of time.

This includes those who work as government officials in international organizations such as the UN, individuals who work for private companies with postings abroad or anyone else who conducts or facilitates business outside the country. For these people, buying a house back in India makes sense as they are most likely planning to come back to India upon completion of their work. But it wouldn’t be practical if they had to come to India and then start searching for a home as we all know that the process of buying a home in our country is complicated and often long drawn out. It is for this reason that many banks have provided the facility of availing an NRI home loan, which allows the individual to find and set up their house in India while they’re still abroad making the process of settling convenient, quicker and easier. For those considering an NRI home loan, it is important to bear these five crucial points in mind.

What does an NRI home loan avail you?

Just like a normal home loan, an NRI home loan entails you with the ability to purchase or develop certain properties in India. In fact, an NRI home loan entails you the same properties that a resident Indian can purchase through their home loan. The properties that are covered by this scheme are of four types; properties that are already constructed, properties that are under construction, properties that are to be constructed on an owned area and existing properties to which changes are to be made. In each of these cases a home loan can be requested from a bank to purchase or develop the property except in the case of creating alterations to a pre-existing property; in which case there will be a variation in the type of loan that is provided. This is besides the fact that every bank will have different terms and conditions for the loan they provide.

How much can I request for as my loan amount?

There is no set lower and upper limits for the loan amount you can request for. Each bank sets its own terms and conditions on the amount of loan that you can avail from them. The amount you can avail usually depends on three main factors; your educational or professional qualifications, your place or country of residence and you gross monthly and net monthly income (GMI and NMI). In the case of educational qualifications, if you’re looking for a home loan in India, you will have to be a graduate or higher for a bank to even consider you for a loan. Apart from that, your level of qualification also affects the loan amount you can avail. The same goes for any professional qualification you may hold. The next factor is your place or country of residence. Most major banks have their offices in many countries and the economic status of the country you’re residing in plays a major role in deciding the amount of loan you can request for. Depending on the relative value of the currency, financial situation existing in the country and a host of other factors, banks set a minimum criterion for earnings based on which you can apply for a loan. As it differs for each country, you should do research for the country you live in before applying for a loan. The final factor is your income. In most cases, banks provide for an advance of around 80-85% on the value of the property based on your gross monthly income. Usually, the maximum amount of loan a bank is willing to grant is in the range of 36-40 times your gross monthly income. In some cases the banks may also look at the ratio between your equated monthly installments (EMI) to your net monthly income (NMI).

What is the rate of interest and tenure of loans I can look forward to?

As an NRI is not working in India and it is uncertain for how long the person would be present abroad, there is a greater risk in the repayment of loans. It is for this reason that in the case of an NRI Home Loan the tenure and rate of interest differs from that of a residential home loan. While a person living in India can look forward to tenure of thirty years for their home loan, an NRI is restricted to tenure between five to fifteen years based on the bank and the loan amount. Also, it is usually found that an NRI will have to pay a further 0.25 – 0.50 % more on the base rate of interest as compared to a resident on a residential home loan.

What are the documents that I need?

The documentation required for an NRI home loan is different from a normal home loan. To apply for the loan you will need; copies of your passport, a valid visa and permit for your work, your employment contract, a work experience certificate showing the amount you’ve worked, your salary circulars, statements from the bank of your NRE or NRO accounts and if you are residing in the Middle East, you will have to provide your employment card as well. Although so many documents are required, submitting and having them verified isn’t difficult. Many banks have their branches present overseas and some of them even provide the facility of submitting your documents online. In case you would like a resident back home to do your submission, you will have to grant that person a Power Of Attorney so that they can complete the process for you.

How do I repay my loan and what happens if my status changes to reflect a resident?

In order to repay the loan, you will have to possess a non-resident external (NRE) or a non-resident ordinary (NRO) account. Payments will only be accepted from either of these types of accounts and payments can only be done in Indian rupees. If by any chance, during the process of repayment or anytime during this entire process you happen to become a resident of India and change your status from that of an NRI, the various aspects of the loan such as the loan amount, tenure and rate of interest will also be changed in order to reflect your new status.

Keep in mind that although the process is usually common across the different banks, every bank can have slight variations in their mode of operation. So it is best that you learn of these variations beforehand so that when you do apply for your loan, the process is streamlined.

{Source: http://homesathand.com/blog/considering-an-nri-home-loan-bear-these-five-crucial-points-in-mind/}

Home Loans Guide.

Choosing a house to buy can sometimes feel relatively easy compared to preparing to apply for home loans.

There is a lot of information, processes and fees that you need to take into consideration so it’s important that once you have narrowed down your home loans search to a preferred lender with great interest rates, that you prepare for your next step – applying.

We will get you started down the right path by highlighting a list of things you should consider to be best prepared for the home loans application process.

Repayments

As a rule of thumb your loan repayments should be no more than 30 percent of your income.

Flexibility

When calculating how much you can afford to make in repayments, ensure that you allow for at least a 2 percent buffer for rate increases and changes to your financial circumstances.

Deposit

Make sure you have saved a deposit and can show a proven savings history of at least three to six months by either depositing money into a linked savings account on a regular basis (at least once a month) or increasing your balance in your transaction account. Most loans require a deposit of at least 5 percent and you will also need to save for establishment fees and other upfront charges.

Documentation

You will need to have copies of all documentation required, such as pay slips to prove your income, bank statements to show your savings, bills or rental receipts to prove your credit history and identification.

Fees and Charges

Do your homework so there are no expensive surprises. Be aware of all the fees, charges and ongoing costs.

Extra Costs

Have you accounted for the other costs incurred in purchasing a home, such as lenders mortgage insurance and stamp duty? Check out our fees and charges checklist and our stamp duty calculator to make sure you’re financially prepared to sign the dotted line.

Fine Print

Finally, while it’s not the most exciting part of buying a new home, reading and understanding the home loans product disclosure statement – is certainly one of the most important parts.

{Source: http://www.ratecity.com.au/home-loans/articles/home-loans-guide-step-6-of-7-application}

5 Tips for Taking Home Loan in India.

Planning to buy your dream home? It is not always possible to have so much savings or ready cash for purchasing a home. Thanks to the facility of home loans that give us the opportunity to own our dream home. Many banks and financial institutions give us tempting offers to avail loans in the real estate market. However, one must be careful to collect all the related information before opting for any offer for loans. It is crucial to understand all the factors, terms and conditions of repayment. Once you make up your mind, the next step is getting the money. Getting a home loan may appear a challenging task, but it can be made simple by keeping a few points clear in our mind.

Affordability

People usually get emotional when it comes to their homes. However, the decision of buying one should be out and out practical. The purchase of your dream home should not make a hole in your wallet. Thus, you must check beforehand whether the down payment and the EMIs are within your range or not. The down payment you decide to shell out should be planned in a way that you still have the money to meet any emergency, while the EMIs should be planned as per the basic rule of not exceeding 45% of your total income.

Deciding on the Lender

Since the loan taker is the customer, the option of choosing from the lenders is in his court. So, one should do enough research to decide on the bank or the financial institution. Keep in mind that don’t go by the offers of just one, but consider at least 5-6 companies before making your decision. Do check the terms and conditions they are offering and what exactly suits your requirements. While evaluating the lenders, consider both quantitative and qualitative aspects of the loan. For instance, the interest rate is important and may not vary much between the banks but the customer service, internet banking facilities and other such features may differ extensively. You must consider these things as you have to manage with them for the rest of the loan tenure.

Interest Rates

First of all, people obviously look for loans that come with lower interest rates. During festival season, many banks and institutions offer home loans at discounted interest rates. Before making any decision, you must cautiously check as well as have the clear understanding on the calculation of interest rates. Now the question is whether you’ll go for fixed or variable interest rates. As we know fixed rate of interest is generally higher, the monthly EMIs would obviously be higher. So, it is always better to go for variable or floating rate of interest on your loan. Keep a check of the interest rate trend. If the interest rates have drastically increased in a short span of time, you need to reconsider your decision as it may increase your future EMIs considerably. For this, it would be better to have a timely follow up with the bank so that you can save on interest, when the rate changes in your favour.

Loan Tenure

Usually people tend to go for the longer tenure seeing that the EMIs are more affordable. However, it also means that you finish off paying more interest. Consequently, your dream home becomes more expensive. For people who have started working, it is apt to choose long tenure as affordability would be a major concern. There are chances that you pay EMIs before the time. In later years of working life, it gets difficult to manage long tenure loans.

Credit Score

Before approving the loan, every bank or financial institution checks for your credit score. Credit score is the score card of your financial life until now. With this, the bank reviews your financial credibility and the risk associated with their loan payment. A bad credit score will get you nothing, thus letting your dreams crashed. That's why it is important to know your credit score from the CIBIL website. It will help you to fix any mistakes in the score.

Though home loans offer a nice opportunity to buy homes without ready cash, it is up to you to understand the terms and conditions associated with it to enjoy the advantage and save money. As you take a home loan, you are entering in a long term relationship with your lender.

Taking a home loan entails a long term relationship with your lender. Hence, keep these pointers in mind while you hunt for the right home loan for your dream home.

{Source: http://www.deal4loans.com/home-loan-planning.php}

Importance of the housing loans.

In the metro cities there has been a 30 % rise in the property rates since the last two decades. Despite the high price people want to buy their own house.  The process of buying a house is quite difficult if you are buying a house completely on your savings or your income. There are traditional finances which have been offering loans also there are personal loans available but they do not offer flexibility in the tenure of the repayment and interest rates. Home Loans are given by various banking and non-banking financial institutions across India.

The housing loans are available in the market at a lower interest which can range between 9-10 %. The processing fee which differs from bank to lending organizations ranges between 1-2 % of the loan amount. These home loans also provide flexibility in the interest rate and the tenure of the repayment of the loan. However the amount of the loan which is sanctioned depends on various factors like the age of the property, the location of the property, the age of the property while sanctioning the loan, the age of the property at the maturity of the loan. However the interest rate plays a vital role in the home loans as lower the interest rate the more affordable the loan is for the common man. The interest rate also determines the equated monthly installment the person has to pay every month to the bank. The EMI is the specified amount a person has to pay on a specified date every month. The EMI of the Home Loans should not exceed more than the 30-40 % of your salary as you will feel burdened by the loan.

Buying your own house is the biggest accomplishment of anyone’s life. It is also the largest investment portfolio also there is a sentimental value attached to it. Buying a home loan requires long term commitment. Hence, see to it that the interest rate for the housing loan you have availed is less. The best way to manage the borrowing is actively manage your home loans. Banks and the non-banking financial institutions often provide the new customers lower interest rate than the existing borrowers. Even a 0.5% of the reduction in the interest rate can help you save a lot of money by making the loan more affordable to the customers.

There is special concession for women candidates who are offering home loans. These home loans are customized specially for the women candidates.  Nowadays a person can simply visit the website of the bank or the non-banking institutions fill in the required details for availing for a home loan. You don’t need to manually visit the lending institutions. You can simply visit the website and apply for the loan. The customer care executive will contact you and tell you about the details. Before availing for a home loan it is always better to compare them online. Compare the interest rate offered by various lenders and the tenure for the repayment. This will help you in availing a best kind of loan which best suits your needs.

Home Loans: Realize Your Dream Of Owning A House.

If you are looking for finance to help you buy your house, then the world of banking makes available to you numerous options that enable you to do so. A home loan has two basic connotations. It is a loan taken to buy a house or a loan taken by keeping your home as a security to pay an outstanding debt. A home loan in America is commonly referred to as mortgage. It generally refers to debt, which is secured by the mortgage. Taking home loans presents some calculated risks. When you pledge your property as security, then you stand to lose it if you cannot repay the loan. This is unimaginable risk. But at the other end of the spectrum, these loans are generally low risk for the lenders. Money lending organizations give borrowers an amount, only if they know that the concerned person has sufficient financial ability to pay back the borrowed amount.

In many countries, people fund the purchase of their homes with the help of mortgages. The market for home loans has developed significantly in countries, when there is an increasing demand for home ownership. This scenario is largely prevalent in countries like the United States, Great Britain and Spain. Though the legal jargons and terminologies are different in each country, the whole concept of home loans and the home loans process remains the same.

There are two integral components of a home loans namely, the creditor and the debtor.

Creditors include banks, financial institutions, insurers and other such organization that provide loans for the purposes of buying real estate. Creditors have a legal right to the debt that has been secured by the mortgage taken by borrowers. The debtor is the borrower. He must confirm to, and meet all the loan conditions laid down by the creditor. Debtors include individuals and businesses who want to purchase property. Taking home loans is a complicated business and there are various other participants that are involved in the process.

These might include the likes of lawyers, solicitors, and conveyances. At times, debtors, approach professionals like mortgage brokers, and financial advisers, who refer them to the best creditor who can satisfy their home loans requirements. The various types of home loans include package loans, hard money loans, and term loans, amongst others.

The banks and various other money lending organizations take into consideration various factors before approving your home loans. The most important evaluation factor is the inherent capacity to repay the loan. This in turn is decided by taking cognizance of various points like income, employment, qualification, assets, liability, stability, and the number of years spent at the present residence, and of course the savings history.

It is only after going into this information in some detail that you get the much anticipated nod from your lender. Taking a home loan primarily requires a good credit history. But, more and more options are increasingly becoming available to those who dream of taking a home but have a poor credit history. So do analyze your needs, evaluate your options, and then go for the home loan that can best suit your requirements.

{Source: http://ezinearticles.com/?Home-Loans:-Realize-Your-Dream-Of-Owning-A-House&id=307944}

Know Why Women Got Preference in Home Loan Application.

To make women financially dependent and socially strong, financial agencies including Banks took some major steps. It includes special discounts, concessional rates and also special schemes to promote women to buy a house by getting easily available home loans.

Being an owner of your own house gives a sense of financial security for both genders. Since our society is not women-centric and it requires women empowerment, Banks are offering loans for women applicants with attractive benefits and schemes that are exclusive for women only. To promote Home Loan for Women different banks are coming up with lucrative schemes for ladies that are the primary or sole applicant and primary or sole owner in case of joint ownership of the house.

Here are the reasons why women should apply for home loan.

1. Higher Chances of Loan Application Acceptance – Every Bank or loan providing organization has a process to analyze the loan applicant. It involves the eligibility criteria decided by the lender, required documents submission and also applicant should have a good CIBIL rating. A credit score is a way to that banks uses to measure the risk involved with the applicant. A good CIBIL rating (credit score) simply means a less risky borrower. Statistically, it is seen that women are less risky borrowers as compared to men when repaying EMI. Therefore women as primary applicant, with correct documents and a good CIBIL score tends higher chances of getting their home loan approved.
2. Lower Interest Rates as Compare to Loan Applied by Man – Interest rate is the major element in any loan. The home loans involve huge amount and their repayment duration is also longer, a slight change in the interest rates can cause a heavy burden on the borrower. Recently most banks coming with offers, like SBI bank has a special home loan scheme called ‘Her Ghar’, HDFC Bank offering Home Loan for Women called “Women Power”. Similarly, ICICI Bank and LIC also offer home loan for women at concessional rates.
3. Lower Stamp Duty – Stamp duty changes state to state as it is decided by the state government. Many Indian state governments have lower stamp duty for Women applicants who are looking for Home Loans. Usually, the difference between stamp duty for women applicants and men applicants are up to 2 percent. It looks smaller but for a loan amount of 50 Lacs, the relief of 1 Lac is huge for anyone.

There are many developers and builders and also offers special discounts and time bound schemes that are primarily designed to empower women to buy a house. In the sale of plots by the government through the lottery system, women get special privileges as well.

In my perspective, it is a good way to motivate women by offering them special privileges and let them fulfill their dream of having their own house.

In case you would like to know more about the benefits women can avail while applying for home loans, you can ask your questions to our experts at Banknomics.

{Source: http://www.banknomics.com/blog/know-women-got-preference-home-loan-application/}

Home Loans Right Approach to Become a Homeowner.

Home Loans at attractive interest rates from HDFC Home loans. Best home loan rates for women and salaried individuals. Avail home loans at low processing fees.

WHAT IS IMPORTANCE OF THE HOME LOANS EMI CALCULATOR.

The home loans EMI calculator as the name suggests will help you understand the regular EMI payable to the bank on the purchase of the home loan. Earlier calculating the EMI was a tedious task as it has huge amount involved and there were manual errors due to the manual mistake.  As the manual task was involved it was also time consuming the errors would affect the EMI payable.

Home loans EMI calculator has thus simplified the process of calculating the EMI. You can now just calculate the EMI payable with the help of your principal loan amount, the interest rate charged on the loan, the tenure of the loan.  Your equated monthly installment is also a partially decided on the tenure of your loan. The more the tenure the less will be the EMI per month. It is the specific amount you need to pay every month on a specified date.

With the help of the home loans EMI calculator you can get a rough idea of the amount you need to pay every month so that you can plan your monthly expenses accordingly. The EMI should not be more than 30-40 % of your salary as it will create problems and lead to financial contingencies in your monthly budget. Hence, you should not feel burdened with the loan.

What are the loan parameters that are used to calculate the EMI?

The simplicity of the home loan EMI calculator is that it is directly related to minimal inputs and it customizes the results as per the inputs.

• Enter the principal loan amount. If there is a slider adjust accordingly on the slider.
• Then enter the tenure of the loan. Or adjust the slider accordingly on the year scale.
• The value of interest rate must be inserted or adjusted properly in the designated box. The entered value is in respect to the percentage you need not insert the percentage sign. A slight mistake can cause error in the entire calculation.
• This value is in respect to the loan amount it can be 1-2 % of the loan amount or as charged by the respective bank. If you are not sure about these values while the input contact the customer care executive or go through the website for the same.
• Many of the home loan customers opt for prepayment of the loan. This point is also considered in the home loans EMI calculator.

It is obvious that the question will arise is why use the home loan EMI calculator?

The answer is that the EMI calculators save time, energy and give you a clear insight into the picture. Apart from this the following are the advantages of the EMI calculators.

• The boring calculations are simplified and solved within fraction of seconds, without any errors.
• The EMI calculators are simple as normal calculators so that you can use them feasibly.
• You can set the slider as per your convenience and check the EMI payable. You can also set the slider to test various combination of interest rate and tenure of the loan to avail for a right kind of loan.
• The home loans EMI calculators a tool that is absolutely free you don’t have to pay any extra charges for it.

Home loan seekers: Key things to keep in mind.

The problem of stressed loans and NPAs in the banking sector has aggravated, so the banks are now more cautious about disbursals, and verify thoroughly whether borrowers can pay back the loan. Banks are going through the loan applications more cautiously these days.

With a rise in the property prices and rise in people’s aspiration to have their own dream home, the demand for home loans is also rising. As per the experts in real estate sector, home loans contribute nearly 9% to India’s gross domestic product (GDP).

The problem of stressed loans and NPAs in the banking sector has aggravated, so the banks are now more cautious about disbursals, and verify thoroughly whether borrowers can pay back the loan. Banks are going through the loan applications more cautiously these days.

Borrowers need to take care of following things to get the home loans approval from the banks easily:

Credit score: Banks often look at credit score of loan applicants, since the score speaks about applicant’s repayment habits. Usually, credit score above 750 is considered as a good score. Home Loans seekers should maintain a good credit score before applying for a loan.

Age and eligibility criteria: Home loans applicants should thoroughly go through the eligibility criteria of banks before applying for loans, since different banks have variety of eligibility criteria. If a bank does not find a loan applicant suitable enough for availing a loan, then it can reject the application.

Stable income source: If an applicant is working in the private sector, then the banks usually prefer those applicants who have been working in the same organization for past two to three years. The applicants working in chemical factories which are considered as life threatening would reduce the chances of approval of loans.

Seeking loan for an old building: Some of the banks may not approve loans if they find that the related property is aged considerably. For such loan applications, applicant may have to pay larger amount as the down payment, otherwise the loan application may get rejected.

{Source: http://www.blog.loanmoney.in/home-loan-seekers-key-things-keep-mind/}

11 must know home loans tips and tricks!

Buying a house is once in a life time decision for most of us. Buying a house can be a fun and exciting experience. But finding the right home is just one step in the process. Most of the us ignore choosing the right home loans and see set of surprises later. Mostly we will refer the builder or friend who had recently taken home loans. Here are some tips to help make finding the right home loans as easy as possible.

“When I took the home loan I compare home loans interest rates of loan products. While I was sanctioned a loan for 15 years, I foreclosed my loan six months ago, that is within ten years,” said Gopi Krishna.

What are the right things he did? Read on to learn a few useful tips from him.

Tip 1 – Good research:

Do not go as per what your loan agent says. You do your own research of the best terms available in the market. “While taking a loan, my agent did everything to stop me from going to a specific bank. I later on realized why, specific bank was paying less commission to agents, so they earn less. Hence the agents never encourage few banks,” said Srinivas. “I went and choose the bank that gave me the cheapest rate of interest,” he added.

Tip 2 – Get your financial documents in order:

When you apply for home loans you need to provide your lender with number of financial documents. Having these documents already assembled will help accelerate the processing of your loan application.

Tip 3 – Park your additional funds:

A couple of banks have a facility, which allows borrowers to park their additional funds in the loan accounts. “This will reduce the interest proportionately from the principal amount for the time that the amount was parked. This is an interesting option. This was not there when I took a loan,” said Sandeep.

Tip 4 – Learn what is floating or fixed rates:

There are two types of interest rates that banks offer: floating and fixed interests. Floating interest rate is linked to market. It moves in tandem with a base rate.  Where as fixed interest remains fixed for a few months defined in the loan agreement. It is important to understand that in most cases floating rates work out cheaper than fixed rates in the long run.

Tip 5 – CIBIL Score:

It is important to have a score of 750 plus to get attractive rate of interest on your Home loans. CIBIL data indicate that 80% of the home loan approvals are given to customer who have a credit score of 750 plus. Low CIBIL score could possibly reject your Home Loans application or you may have to pay a higher interest rate.

Tip 6 – Understand foreclosure norms:

Recently, RBI banned foreclosure penalties. So make sure you do not pay anything extra while foreclosing your loan.

Tip 7 – Save up to foreclose:

If you can save Rs 1 lakh in the current fiscal, do not use it on a dream holiday abroad. Instead use it to foreclose your loan. “My advice to every borrower is that learn to foreclose your loan as soon as possible. The sooner you free the amount you pay for equitable monthly installments (EMI), the earlier can you enjoy the freedom to spend that money on luxuries of life,” added Sandeep.

Tip 8 – Compare processing fees:

Whether it is for a fresh loan or for a balance transfer. Enquire in all the banks before you finalize. Also make sure you give a cheque for processing fee instead of adding it to the loan account. If we add processing fee to home loans, say Rs-10,000 fee on 20 years loan with 10% interest rate, then one would end up paying Rs-23161.

Tip 9 – Read the documents:

Read everything written in the loan agreement before you sign on the dotted line. It is very important to be aware of terms and conditions. “I have to pay Rs-5000 every time I take a home loans provision certificate for tax saving” said Ramesh.

Tip 10 – Increase the down payment:

Every borrower has to pay some money from his own pocket while buying a house. Try to pay as much as possible as down payment. This will reduce your interest paid on the principal.

Tip 11 – Spend conservatively:

Keep a tab on your spends during the home loans tenure. The old adage “A penny saved is a penny earned,” holds true in case of home loans too. When you save money, you could actually use it to foreclose the loan.

{Source: http://loanyantra.com/blog/home-loan-hot-tips.html}

Five Factors To Consider When Looking For The Best Home Loan.

It is an exciting time, purchasing a new home. There is so much to do but first things first, how do you find the best home loan? The easiest solution is to work with a mortgage broker who'll do all the legwork for you. Plus, one of the biggest benefits of using a broker is their ability to assess your needs, narrow down the options and then advise you on the best home loan for you.

Don't let yourself become overwhelmed by all the numbers and fine print, simply focus on the following five factors:

1. Do I prefer a big bank or small lender? Voice your preferences for a small lender or big bank with your mortgage broker at the very start. This will help you to refine your search and may help to speed up the process of researching and comparing the best home loan.

2. Which style of loan is right for me? There are a multitude of loan styles and a reliable mortgage broker will be able to guide you through them and explain the pros and cons of each.

In general, home loans fit into one of the following categories:

i) The standard variable loan: when you take out a standard variable rate home loan your interest will be charged at a variable rate as determined by your bank or lending company. This is an appealing option when interest rates are high and predicted to fall.

ii) A fixed-rate loan: this home loan model allows you to lock in to an agreed interest rate for a fixed term or for the life of the loan. This is good option when interest rates are low and are predicted to rise.

Your mortgage broker will guide you in deciding on the best option for you. This may be a combination of the above two types of loans depending on the economic climate at the time when you are borrowing.

3. Can I afford to do this? Once you have determined which style of home loan suits you best it's important to look carefully at the loan and ask yourself the following questions - discuss these with your mortgage broker:

i) Have I saved enough of a deposit to establish the loan and cover all of the upfront costs and fees?

ii) What are the exact repayments I will be making?

iii) Is my current financial situation likely to change? Will this affect my ability to pay off the loan?

iv) Do I have adequate income protection to cover my mortgage repayments in the unlikely event that I am affected by illness or injury?

4. Does the loan provide me with flexibility? Before signing on the dotted line investigate how flexible your loan will be. Ideally, you should be able to make extra repayments and pay off the loan faster. Alternatively, you may also like to have the option to redraw on the loan to pay for things like renovations or to access money in an emergency.

5. Am I fully informed? Availing of a loan is a big decision and it's a huge responsibility. Ensure that all fees are fully disclosed before signing anything. Whilst we all like to be optimistic, life does throw us curve balls from time to time so also make sure you know what your options are should you be unable to make payments or should you wish to sell the property and terminate the loan.

To find more useful information on how to get the best home loan visit Best Home Loan

{Source: http://ezinearticles.com/?Five-Factors-To-Consider-When-Looking-For-The-Best-Home-Loans&id=7394159}