Finance >> Home Loans

Home Loans

It is no more a distant dream now about buying a home. Competition is hitting up between numerous housing finance corporations with most of the key players revising down their interest rates. However; home loans are commonly obtained by people to buy a new or resale property. Many banks, government sponsored organization, financial institutions offers property loans.

 

There are hundreds of things when it comes to buying a property; however there are some factors that are required to keep in top priority. Top amongst the list of things to consider are:-

 

Loan value

 

What will help you to determine your loan value? While applying for the loan, the lender examines, evaluates the loan to the value of the property. This is the basic calculation that tells the lender the amount versus value of the house. Moreover; they evaluate the risk factor i.e. paying back the loan or in case if required they are able to cease the property and can have their loan money etc. If the buyer is able to raise 20% of the down payment, the loan becomes less risky and lenders are able to grant the loan with less hesitation.

 

Rate of Interest

 

This is single biggest factor while pursuing a loan. The lower the interest, the better it is because; the buyer requires paying less interest each month and, paying more towards the principle amount. Lower interest rates means, the buyer is eligible for higher loan money for a given income level. Also take note that rate of interest is higher for fixed compared to that of floating rates.

 

Tenure

 

Survey the tenure for which banks or financial institutions offer the flexibility in terms of loan tenure. Usually Home Loans are offered for 20 years but, some may provide it for 25 years. Longer tenure means, the EMI amount is more in form of interest over the life of the loan. Also there is a facility for an early pay back for which the buyer needs to understand the terms and conditions attached with it.

 

Calculation of rate of interest

 

This factor again impacts on how much an individual pays as interest on the loan amount. Since; these days the rate of interest is evaluated on daily as well as monthly basis. Confirm with the loan provider before finalizing.

 

Admin fees-Processing fees

 

Banks or other loan providers charge processing fees against processing the loan application however; the ratio varies from one to another. The fees are charged irrespective of rejection or approval for the Loan whereas some include this fee in the loan amount.

 

Time duration for the processing of loan

 

This is qualitative factor, it does not have any impact financially but it is still important. It is observed that various banks have stringent rules and hence; take more time in processing and disbursing the loan amount. The buyer if is in hurry than needs to check this as a first thing.

 

Apart from this there are other things such as pre-payment penalty, foreclosure penalty, requirement of the guarantor, promotional schemes to consider while short listing a home loan.

 

Accepted Home Loans
Asda Finance Home Loans
Countrywide Home Loans
Debtbuster Home Loans
Purple Home Loans
UCB Home Loans