A Detailed Guide on Understanding Home Loans and Home Loan Balance Transfer
by Litty Jose Finance AnalystHome
Loan decoded
With the
advent of Nuclear families in today’s scenario, the term ‘Home Loan’ is not unheard of. Home Loans are essentially loans
given by the home loan providers for the purpose of acquiring a home or a
residential property. As a matter of fact this facility provided by a finance
institution, Mortgage Company or other financial institution is widely used not
just on a need basis but mainly because of the various benefits and
alternatives it entails.
Alternatives
such as fixed or floating Home Loan interest rates and
benefits such as low interest rates for women are as follows:
Home Loan
Interest Rates
The major
difference between a floating and fixed interest rate is that a fixed interest
rate stays the same throughout your home loan tenure, unaffected by sudden
market changes. However, a floating Home Loan interest rate could prove to be
beneficial in the long run due to the fluctuating decrease in the original
interest rate. Housing Loans itself are of various types, Home Purchase Loan
(purchase of a pre-existing home), home construction loan (to build it as per
your desires) and many more.
Low
interest home loans
This is
probably what most people have in mind when they think about finding the
cheapest home loan. A low interest rate makes a massive difference to the
overall expense of a home loan.
How
can a loan with low interest rates save you money?
It’s
important to look beyond the face value rate when considering a loan. Most Housing Loans have
ongoing fees and discharge fees associated with them that can cost thousands.
It’s wise to compare home loans by looking at all the associated fees and rates
together.
Some loans
may have high ongoing fees but offer discounted interest rates and processing
fee waivers which could be more beneficial with an overall perspective. However,
with the course of time, if you happen to come across another financial
institution offering you a lower interest rate you could also apply for a Home Loan Balance
Transfer.
The company
that had originally extended the loan to you gets the unpaid amount and you
have to, in turn, now pay your EMIs at the new rate to the home loan provider
that has taken up the loan. In case of Home Renovation Loans, opting for a
Top-up Home Loan will get you a much lower interest rate than a personal loan.
The interest rate will be 1%-2% higher than the home loan interest rate, which is still better than the personal loan interest rates.
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Created on Sep 28th 2017 08:29. Viewed 1,161 times.