Choose the best home loan plan to suit your requirement
Aug 18, 2017 Home Loan
For years, the real estate sector of the country has been in a drought with fewer sales and demand. This led to stacking up of unsold inventories across the country. High prices and home loan interest rates have been a major contributing factor to the slow and cold real estate market. To overcome this, the government, banks and developers all came together to lay down the best suitable option for the buyers.
Recently RBI has reduced their base rate leading to the banks and loan lending institutions to cut their MCLR rates as well, which leads to low interest rates for home loans. This has definitely attracted more buyers and is helping in reviving the real estate sector.
Buyers get confused choosing the best home loan option for them. We discuss all the kinds of home loans to help you choose the best one:
1. Holiday period on EMIs:
A moratorium is the holiday period in which the borrower does not have to start the repayment towards the home loan immediately. It is given out for the under construction. Even though you do not have to pay the loan amount, the interest on the outstanding amount starts incurring. The objective or moratorium is that the buyer can start saving some capital.
Most banks provide moratorium period of two years but a borrower can check with the bank and check for the grace period they are willing to offer.
2. Online service:
The Internet has made life easier for us. Everything is just a click away. From choosing the right home loan provider to paying the loan without having to go to the bank office every month. These days banks also provide service to your doorstep. After you have decided on the lender it is better to inquire about all the online facilities they are providing.
3. Time takes for credit appraisal:
Almost all the banks have the same guideline for the credit risk measures taken. The one that takes the shortest time to approve the loan procedure and pass the credit to you should be your number one priority. Most of the time buyers have set time in their mind when they approach the bank for a loan. It is better o take the one who will approve it quickly.
4. Easy pre- payment facility:
Taking a home loan and paying it for 20-30 years is a long time. It is better to choose the bank that provides zero charges facility on the pre payment option. The floating rate of interest generally comes with no penalty for pre payment.
5. Hybrid home loans:
If you are confused on whether to opt for a fixed or floating rate of interest, go for hybrid home loans. This is the mix of both fixed and floating interest. Fixed rate of interest is charged for first few years and the rest are charged at the floating rate of interest. Not all banks have this option available.
6. Home loan insurance schemes:
This plan helps in covering the outstanding loan in case the borrower dies during the payment duration. These policies offer a cover that reduces after every year as the loan amount dies down. This is an excellent option if you do not have enough funds for the down payment. But remember this will add to your monthly MEI expense.
7. No hidden costs:
It is difficult to figure out the hidden charges in the home loan options. It is better to read the loan document thoroughly to make sure you are aware of all the costs that will be incurred.
Recently RBI has reduced their base rate leading to the banks and loan lending institutions to cut their MCLR rates as well, which leads to low interest rates for home loans. This has definitely attracted more buyers and is helping in reviving the real estate sector.
Buyers get confused choosing the best home loan option for them. We discuss all the kinds of home loans to help you choose the best one:
1. Holiday period on EMIs:
A moratorium is the holiday period in which the borrower does not have to start the repayment towards the home loan immediately. It is given out for the under construction. Even though you do not have to pay the loan amount, the interest on the outstanding amount starts incurring. The objective or moratorium is that the buyer can start saving some capital.
Most banks provide moratorium period of two years but a borrower can check with the bank and check for the grace period they are willing to offer.
2. Online service:
The Internet has made life easier for us. Everything is just a click away. From choosing the right home loan provider to paying the loan without having to go to the bank office every month. These days banks also provide service to your doorstep. After you have decided on the lender it is better to inquire about all the online facilities they are providing.
3. Time takes for credit appraisal:
Almost all the banks have the same guideline for the credit risk measures taken. The one that takes the shortest time to approve the loan procedure and pass the credit to you should be your number one priority. Most of the time buyers have set time in their mind when they approach the bank for a loan. It is better o take the one who will approve it quickly.
4. Easy pre- payment facility:
Taking a home loan and paying it for 20-30 years is a long time. It is better to choose the bank that provides zero charges facility on the pre payment option. The floating rate of interest generally comes with no penalty for pre payment.
5. Hybrid home loans:
If you are confused on whether to opt for a fixed or floating rate of interest, go for hybrid home loans. This is the mix of both fixed and floating interest. Fixed rate of interest is charged for first few years and the rest are charged at the floating rate of interest. Not all banks have this option available.
6. Home loan insurance schemes:
This plan helps in covering the outstanding loan in case the borrower dies during the payment duration. These policies offer a cover that reduces after every year as the loan amount dies down. This is an excellent option if you do not have enough funds for the down payment. But remember this will add to your monthly MEI expense.
7. No hidden costs:
It is difficult to figure out the hidden charges in the home loan options. It is better to read the loan document thoroughly to make sure you are aware of all the costs that will be incurred.
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