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Building a house is a very important event in any person's life. The decision to build a house comes after a long analysis of the sources of funds to facilitate the process. The most accepted method of financing a home purchase is with a housing loan. This is a loan that is protected against the home. There are a number of different housing loan suppliers and you will have to shop around in order to get the best one. Housing loan rates can vary from bank to bank and a small change in rate can make a huge difference to the amount your repayments will amount to. Even a small difference in rates could save you thousands of rupees or allow you to have your loan paid off years faster.
There are a number of home loan providers in India to choose from. People sometimes have difficulty in distinguishing between the different home loans that are available. It is a difficult thing to decide which home loan is right for you. The first step towards doing that is making sure that you understand the different home loans that are available. MoneyMindz.com provides you the comparison of home loans. Click here to compare the different home loans available in the market.
Following are the important features of home loans;
You should know about each and every term related with Home Loans before applying for a Loan. It is always better to discuss with a home loan expert or consultant before applying for a home loan or purchasing a property. There are different types of home loans tailored to meet your needs. You choose from that according to your need. All these products are designed to meet different needs.
These are the basic forms of home loans used for purchasing of a new home.
These loans are given for implementing repair works, remedial and renovations in a home that has already been purchased.
These loans are available for the building of a new home.
These loans are given for increasing or extending an existing home. For example: addition of an extra room etc.
These loans are available for those who have financed the present home with a home loan and wish to purchase and move to another home for which some extra funds are necessary. Through home exchange loan, the existing loan is transferred to the new home including the extra amount required, eliminating the need of down payment of the previous loan.
These loans are available for purchasing land for both construction and venture purposes.
Bridge loans are intended for people who wish to sell the existing home and purchase another one. The bridge loans help finance the new home, until a buyer is found for the home.
This loan is sanctioned to pay the stamp duty amount that needs to be paid on the purchase of property.
Balance Transfer is the transfer of the balance of an existing home loan that you availed at a higher rate of interest (ROI) to either the same HFC or another HFC at the current ROI a lower rate of interest.
Refinance loans are taken in case when a loan for your house from a HFI at a particular ROI you have taken drops over the years and you stand to lose. In such cases you may opt to swap your loan. This could be done from either the same HFI or another HFI at the current rates of interest, which is lower.
Following are few eligibility criteria which a financial institution will be interested in. After considering all these factors bank will decide whether to sanction the loan or not.
Current profile of an applicant is very important criteria for granting a loan. This is specially for the people who are self employed or who have small business. Experience; number of years you have been working as salaried or self-employed in also taken into consideration.
Total income of the applicant at the end of financial year will be considered. A history of around 3 years will be required. Earning spouse improves your ability to repay.
If you already have a loan then your chances of getting bigger loans are less, however you can take a loan to repay a loan. If you have already repaid a loan then that adds to your creditworthiness.
If you own assets (land or house) then it can be mortgaged against then, loan making you further eligible to acquire a loan.
Educational background is a measure to an individual’s career and financial institutions are generally interested to know the same. A master’s degree is a boost to your sound educational background.
A bank statement to check your spending and saving habits
The amount of tax you pay defines your actual earnings, this is especially for self-employed.
How stable is your work profile? Can you go on the same path for more than 10-15 years? These are few questions which a financial institution is interested in.
Following are the common documents that most of the applicants has to provide while applying for a home loan;
Apart from the above given documents there are some other requirements. It differs from person to person.
There are some terms that are used in home loans. Before taking a housing loan you should understand the meaning of all these terms. That will help you to understand all the terms and conditions of home loan very easily. Here we have given such terms with explanation.