Buying a new home is an exciting experience. But without the right knowledge and guidance, it can be a little risky. The privatization of Banks has proved beneficial for the common people especially the middle class or upper middle class. Real estate rates are getting higher day by day so cash purchase of the property whether big or small is becoming impossible so the purchaser needs a financer who can provide the loan according to their requirement. The interest rates have fallen down and there is easy access to the home loan. If we analyze the trend in interest rates for the past 2-3 years it has gown down excluding year 2004 which has a reverse trend. Interest rates stabilized and showed an upward trend. Housing finance companies increased rates by about 50 basis points; rack rates for floating rate loans ranged from 7.50% to 8.00%, while those on fixed rate loans were quoted at 8.00%-8.50%. Existing floating rate loan holders had to choose between higher EMIs or longer tenures.



The trend also depicts that the loan seekers are preferring the floating loan plan over the fixed one. Some real estate financers provide fixed loan schemes but some introduced the hybrid scheme. In hybrid loan scheme there is fixed loan for specific period and change thereafter. The upward trend in the home loan have forced the loan seekers to evaluate all the schemes offered to them and choose the one that suits the best to them. The consumer should opt for the scheme according to its risk handling capacity. If one can handle risks and want to go some extra mile then for him the floating scheme is the best choice. Otherwise the fixed loan scheme is the best option for the consumer. All top ranking banks provide the fixed/floating loan scheme.

Flexible loan installment scheme is provided by almost every bank. This scheme helps in case the parent and children purchase the property together. The parent is going to get retire soon and children have just started the earning. This option helps such customers combine the incomes and take a long term home loan where in the installment reduces upon retirement of the earning parent. There are other options like the payment of loan in accelerated format. This can be done by increasing the EMI which saves the interest also. So the consumer has various options according to their needs. One needs to research the market and find the right financer for their dream home purchase.