Perhaps this is the only bonus for the middle class man in the past few years, when the property prices and home loan rates shot up and the middle class man could not afford to buy a property.
The GOI has announced a special package for loans up to Rs 5 lakh where the banks reduced the rate to 8 per cent. Loans up to Rs 20 lakh will be charged 9.25 per cent. These rates could be fixed for five years. Also, there will be no processing fees and free insurance on these loans. But these loans are being provided only by the public sector banks.
Thanks to the NHB housing loans are expected to get cheaper as Housing finance companies will get access to cheaper funds with the National Housing Bank providing the special refinance fund from the Reserve Bank at 8 per cent interest rate, smaller housing finance companies join the ranks of major banks and housing finance companies to give loans below Rs20 lakh at attractive interest rates.
The NHB is even looking at the possibility of restructuring reverse mortgage scheme to senior citizens in association with insurance companies like the Life insurance Corporation of India.
However, for loans above Rs 20 lakh, there has been no respite yet, but more rate cuts are expected. With the consistent fall in the inflation numbers RBI is expected to cut rates. In turn, you could expect banks to cut housing loan rates.
In the short to medium term home loan rates are expected to fall, which means it is a good time to buy a home especially if it is not just an investment but a home for personal use.
As the expectation is high on fall of interest rates, home loans would be wiser to be taken on floating interest rate rather than fixed interest rate. at a future point of time you can consider converting to fixed interest rate when interest rates stabilize.
The effects of the economy are such that banks have made due diligence before disbursal very strict, and the margins to be provided by customers are higher now. The present scenario suggests that saving money is better than spending money, save and invest for a brighter future!
This is a right question. Many people who approach me for consultancy in property purchase used to ask this fundamental question. I have a stock answer for them. It is simply home loan.
Home loans come as a handy option for those who plan to purchase a home property, which would not have happened without the home loans. It is very important to know about all the details of the home loan process and also should able to prepare well for all the questions to be answered. This will make the whole deal very smooth with fewer efforts.
There are many factors, which will guide you to take a proper decision on home loans. The main factor is interest. The interest rates will not be same among the lenders and banks and can vary from time to time. If you go for flexible or variable rates, the interest rate can vary within a short period and mostly without any notice. This is a major factor affecting your budget, as the rate change can affect the repayment amount.
Other important factor is the repayment period. The repayment amount is directly depending on the loan period. Variety of payment period plans for home loans are out there from financial institutions and banks.
Typically the interest rate will be less for the loans with long repayment period. You can assess the repayment amounts for different periods using a mortgage calculator. This will help you to fix your loan period and repayment amount as per your requirement of the loan amount.
A major factor is your repayment ability. In most of the cases if you have sufficient amount with you, the lenders will give the option for premature closing. But there are some lenders who are rigid in their process not allowing any premature closing or provide only long term loans. If you are able to payback the whole amount several years before the closing time, you can save lots of amount.
The major disadvantage comes when you default the repayments. All financial institution will charge hefty amounts as fine and will give only a short period to clear the dues. An early payoff is good but if you want to sell the property, it can make many troubles as well.
Since there are many complexities and hidden charges in getting the home loan, it is always beneficial for you to discuss with an expert in this field before deciding up on any types of home loan.
It is absolutely necessary to have all details about the company with which you want to have a deal regarding to the home loans. Also you should be very clear about all the terms and conditions on which you are going to agreed up on. If you have any doubts, do not hesitate to discuss with the executives or a specialist in the field.
Absolutely there is no doubt that home loan is the best option for a potential buyer to get his dream home. Only thing to do properly is your homework in getting the home loan.
Both Mayur & Prudence Wong are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Mayur has sinced written about articles on various topics from Mortgage, Software. is one of the Premier Web Portal On Buying and Selling Real Estate/Properties Founded by Mr. Mayur.Our Link Details:. Mayur's top article generates over 9900 views. to your Favourites.
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