Published on April 15th, 2015 | by Guest0
Important tips to remember while applying for a home loan online
Buying own rajkot property can be a very important decision and a happy thing in life. A home loan is taken by a borrower from the bank issued against the property or security meant to be bought on the part by the borrower, which is to be given by the banker as a conditional ownership over any house or property. Home loan is the most secured loan, offered against the security of a property or house which will be directly funded by the bank, and the property can be for a personal or commercial one. That is, if the borrower failed to pay back the loan money then the banker can retrieve the lent money by selling the property of the borrower.
Now-a-days taking home loan have become much more easy. Most of the banks accept and lend money but while sanctioning it takes little time. Now, a days it have become necessary to take house loans and build house. But before taking housing loan you must know each and every detail, which you are going to read here itself. Before taking the loan you must know each and every thing as you have the right to know the important things before taking housing loans.
Important things which you must remember while taking loan:
- The Loan type: As we know that there are several types of loan. But the most important loan is based on two types. i.e. fixed and floating. Fixed interest rate may be more attractive than floating for a higher interest rate. The fixed nature of interest is the most disadvantageous for those who are looking for long-tenure loan like home loan, where every rates are bound to come down after sometime. But the borrower has to pay the same amount of money at last, even if the rate reduces.
Floating interest loan varies according to the market condition whereas, fixed home loan interest doesn’t change with market fluctuation. Also, fixed rates are higher than the floating rate loan by usually 1 to 2.5%. So, the EMIs also moves up and down according to the change in base rate.
- Rate negotiation: Whatever option you choose, you will always have to keep in mind that you can be negotiate on the interest rate. Even though if the bank always have an upper-hand, but you can haggle as well. Especially if you are an old customer with a very long relationship with the bank, you must be having a clean record in your credit history for payments done on time. You can use that to negotiate loan amount and rate.
- Switch lenders: Taking loan from a bank doesn’t mean that you are stuck forever. If in extreme situation or if in case you get a significantly better deal with another leader then it is a good idea to refinance. Most of the banks don’t have any pre-payment penalty option on floating loans anymore. Although processing fee is the only additional cost which you will have to bear, you can try negotiating or at least ask for reduction if its not a full waiver.
- Longer tenure means costlier loan: When it comes to the increase of base rates it means that the banks have also been increasing their floating home loan rates and for the borrower it means higher EMI, but many cannot afford the big EMI and often request the bank to increase the loan tenure for bringing down the monthly expenditure. It can be a temporary relief to people who are in a desperate situation but in the long term they can end up paying more.
These are the little things which you must know before taking loans. Home loans, if arranged properly, can be the best way to get your dream home.