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How To Buy Your Dream Home: Mortgage Loans In India
So have you recently tried to get a mortgage? If you have, I'm sure you've been through a lot of confusion, before finally able to get a fix, which you should take. You would have exposed several problems. Where can you take a loan? Which bank offers the cheapest loan? You want to get the required amount of the loan? Is it wise to take variable rate loans or fixed due to speculation on the bottom of the exit point? Unless you're a financial genius, choose your mortgage lender will tough.First, you should realize that the lender can not be settled at the rate alone.Here some guidelines to help you make a better decision:
a) companies in housing finance (HFC) and banks to calculate eligibility otherwise. For example, some lenders are very comfortable with the self-employed and calculations of eligibility for the loan to reflect this reality. In addition, some lenders have special arrangements for people drawing salaries above a certain value. In many cases, the amount the lender is willing to give priority to the interests and considerations.b others) Choose a lender who has pre-approved for the property you are considering. This ensures that the disbursement formalities.c relatively easy) If the property is sold, it is advisable to display the project documentation of the property to potential lender before confirming your choice
Some lenders may have special needs that the seller may not be able fulfill.d) Some lenders do not finance the building under construction. Some banks are uncomfortable that some of the charges is self-built property.e) Always check if the lender knows the loan process. Many banks that advertise low-cost home loans often do not know the problem is particularly evident involved.This procedures, if any of the nationalized banks. These mortgage banks' are just one of many activities that they undertake. Although the bank has a lot of experts who know this product inside and out, this experience is rarely available in the local branch level
This leads to avoidable delays, particularly on the payment stage.Now let us turn to the cost factors: f) never take a loan where interest is attached to the base annual rest. All the leading home lenders now calculate interest on a monthly / daily reducing. There is no difference between the basis and foundation remains monthly calculation of daily rest. Interest g) You must know how to calculate equated monthly installment (EMI) for a given interest rate to ensure that rates interest shown are actually implemented. EMI refers to the money you pay to your lender each month as a loan. Part of the EMI is going to repay the outstanding principal, while the remaining amount goes to pay interest on that amount
A simple way to calculate EMI is to use the function (FX) formula in Microsoft Excel (see "Easy Excel EMI"). H) also always take into account the initial costs. This fee could be called an administrative fee, penalty fees, legal fees, technical costs, fees or commitment fees. Some banks may charge documentation or consultation as well. This increases the total real cost of borrowing. (See " How the initial costs add to the interest charge. ") I) Most lenders offer loans up to 90% of the cost of the property, but the definition of cost of ownership varies from lender to lender. It is advisable not to take a loan on which interest is calculated on annual rest. Nevertheless, at present only a very small number of lenders offer rates on an annual basis is
Second, most loans are made at a variable interest rate. This means that the interest rate your loan will go up or down depending on changes in the reference rate, usually the selling price of this bank.j) Another thing to consider is charged prepayment rates by the lender. Most borrowers end up partially or wholly prepay the mortgage loan and, therefore, an early repayment charge added to your total cost. Being equal, choose the lender does not charge a prepayment charge. In a context of intense competition, many lenders offer incentives to entice consumers. Having understood the nitty-gritty of finance at home, now let's take a look at the discussion of fixed and variable interest
Most consumers today are signing new mortgage loans, loan "floating". In theory, the operation of a variable rate loan seems simple. If interest rates rise, interest rates will rise in proportion, and versa.However vice, self-practice, business loans, variable rate is not very easy to understand. Let's take a look at some of the complicating factors are: 1) monitoring of changes in benchmark interest rate: interest rate a consumer will pay during the term of the loan is based on the movement of the reference rate, which may be equal to or below (the main credit) the bank DPP. For example, the bank's reference rate announced 15-year mortgage can be 9.25% and PLR to 10.75% (benchmark interest rate is 1.50% below PLR of the bank)
Today it is common for consumers to obtain better rates than the reference rate declared by the banks. It is important that consumers know that these lower rates you can negotiate an appropriate relationship with the reference type so that no confusion when changing reference type. In the example above, if the customer negotiates a rate of 9% of the bank, make sure that the reference rate referred to in the document is 1.75% below the PLR. This would ensure that the interest rate can be found automatically in case of motion in the DPP. So before you sign your mortgage documents, always make sure that the type of reference is explicitly mentioned in the Agreement2) Reset dates: Another complication is the date should be the reference rate change taken into account way to consumers
As a consumer, you must remember that the benchmark interest rate can move up in your favor or against you. Although in general, the mortgage industry has high levels of transparency, some banks have become standard in the above. Some banks are vague variation of the clause, which refers to a variable interest rate is not even defined as a reference, let alone speak to the mechanism of fluctuation, or the reset dates. What can consumers do to secure a mortgage to your advantage? First, they should read the letter / loan agreement before signing it fine. As noted above, you must also read and verify the mechanism of change that is transparent. Like the soft interest rate expectations, I recommend that consumers should not register for a variable rate loan, so they can benefit from any future reductions in interest rates