5 Things to Keep in Mind if You Have Availed a Home Loan

For those looking to make a property purchase, there is nothing better than getting a call from the bank stating that your Home Loan has been approved. After all, the entire process that goes into securing a Best Home Loan offer can be a bit daunting. Although the technicalities that go into securing a Home Loan is extensive and tiring, here are five things you have to know if you have availed for a Home Loan recently.

1) Part-payment Costs or Foreclosure

When it comes to part-payment, pre-paying a specific amount of the outstanding amount is required. In case of a foreclosure, pre-paying the complete outstanding amount is needed. At the time of Applying for a Home Loan, people do not consciously expect to prepay or foreclose; however, 50% of borrowers consciously check out these alternatives during the entire tenure.

When it comes to pre-payment, it is vital to understand all of the charges linked to it. This helps in cutting down the emergence of high costs in case you do decide to opt for it. Also, make sure you understand any lock-in periods that come with this option that is whether prepayments are not allowed during the first 12 months or so.

2) Keep an Eye on the Interest Rates

The lower the Home Loan interest rate, the better it is for the home buyer. This helps to make affordable housing a reality. There is also the issue of fixed and floating interest rate. Fixed interest rate does not differ with time or situation. Floating interest rates, on the other hand, fluctuate based on prevailing market conditions at a particular period of time.

3) Pay attention to EMIs

EMI (Equated Monthly Instalment) refers to the monthly repayments you have to make to your lender. You are also charged interest along with principal monthly payments. Your EMI should not go over 30% of your total income. In addition to this, you should also take into account other liabilities.

Banks usually look at the repayment period, principal amount, and rate of interest before deciding your EMI. Your amortisation schedule offers you a break up of your complete loan term, so it is essential that you look through this schedule at regular intervals. It helps you in keeping a record of any alterations in the interest rate or loan tenure of the bank.

4) Balance Transfer at the Correct Time

If you have previously availed a loan, especially in the recent years, you can approach your existing bank for a reduction in the rate of interest. In some instances, this helps you secure a good discount when compared to the current interest rates. In case your bank does not offer you this benefit, you can think about going in for a balance transfer to another bank (subject to associated charges). Bring all the required and available information together, compare and contrast in a precise manner and negotiate before finalising a loan.

5) Check the Security of the Loan

When taking a secured loan, the borrower offers an asset in the form of security of the loan. Given this circumstance, the asset for a Home Loan is the property that you will be purchasing. Failing to repay the loan can give the bank permission to sell this property or convert it into an asset to recover the loan amount. It is crucial that you analyse these terms and conditions thoroughly and even go to many banks before finalising the best and most favourable one for your situation.

Following these aspects can help you secure the Best Home Loan Deal that exists and gives you a broader understanding of what needs to be done once you have availed for a loan. Make sure you have all the required documents ready to make sure home loan processing occurs in a fast and effective manner.You can get in touch with the Mortgage Specialists at MyMoneyMantra to help you secure the best rates on Home Loans.

Aslo Read: Are You Still Paying High Interest on Your Home Loan?

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