Do you explore your options for home financing while buying a house of your dream? In the recent years, many banks and finance companies have become more liberal in extending a helping hand to many aspirants who wish to purchase their dream home who struggle to manage complete finance for it.
With the availability of several banks and non-banking finance companies and varied interest rates, home buying has become an easy option for people. They continuously work on innovative solutions for customer and are eager to lend home loan for your housing needs. With easy housing loan procedure, its a great aspect financial aspect.
But, a home loan is one of the most important decisions in a person like and they repayment is a major chunk of your expenses that will last for around 15-20 years in life. Hence it should be taken with proper research and analysis.
Let’s understand four important facts that will impact your decision on home loans. So, get yourself acquainted with the intricacies of housing finance.
The amount of money you get qualified for depends on income source, risk appetite, age and location of property, property value, number of dependents, job or business stability, and last but not the least your credit score. After thorough verification of all the aspects, banks or finance companies will come to a conclusion to offer you a particular loan amount.
With better income source, additional income source, good job or stable business and exceptionally good credit score, you can negotiate for better home loan interest rates deals and flexible ways of repayment.
The interest rates vary from around 8.40 to 12%, while it’s a women applicant then you get a 0.5% concession of housing loan. Mentioning interest rates is just not simple as it sounds. It varies with schemes and loan eligibility. There are two variants of interest rate: fixed interest rate and floating interest rates. Fixed interest rates are one that will stay constant throughout the tenure.
The good part is you have a set mode of repayment and monthly installment. However, it proves costly on your pockets as the lenders have to bear the fluctuation. In variable, the interest rates vary as per government schemes, lenders growth trajectory, and other economic parameters. So, chances are you can pay the loan at a fairly low price for a quite a long time span. This reduces the overall cost of loan repayment amount.
The housing loan tenure could range anywhere from 1 to 30 years. There are even lenders in the market, who offer loan tenure of up to 25 years. However, in most cases it somewhere between 1 to 30 years. You should always keep in mind longer the tenure more interest you are going to pay but enjoy the liberty of low monthly installment and shorter the tenure more would be your monthly installment but the lesser interest you will have to pay.
Many banks and firms charge a nominal percentage towards home loans processing fee. It could range anywhere between 0.5% to 1.25% max. There is a certain ceiling amount that is fixed at a maximum of around 10000 to 15000 in most cases. If you have good repayment history, some lenders might even consider waiving of the processing fee.