The significant expense of land in India implies that to be a mortgage holder, you normally profit an advance. What is a home credit? It is an advance you take for your lodging needs, for example, to purchase a level or buy land. You can apply for a home credit to buy an individual or business property.When taking the home advance, you contract your property to your bank. Every month, you reimburse a bit of the home credit, with interest, through EMIs. Both the interest and head segments meet all requirements for a duty derivation. This is fundamentally how a home advance interaction works.Below are some normal sorts of home loans.
Types of Home Loans Available in India
Before you take a home credit, discover what are the home advances accessible to you.
Home Purchase Loan: Taken to purchase another or second-hand home.
Home Construction Loan: Taken by a proprietor of land to fabricate a homeLand Purchase Loan: Taken to purchase a plot of landHouse Expansion/Extension Loan: Taken to upgrade the current structure.
Home Improvement Loan: Taken to revamp, rebuild, or fix a homeHome Conversion Loan: Taken to back another home as opposed to the bygone one, which the home advance was at first taken for.
Bridge Loan: Taken for a present moment to purchase a home while standing by to sell the old one.
Home Loan Balance Transfer: Used to change a home advance from one bank to another.
Top-up advance: Taken to get an extra sum over the exceptional home advance add up to meet an assortment of needs.
NRI Home Loans: Tailored for non-inhabitant Indians, who want to buy a property in India.
Joint Home Loan: Taken by at least two persons.
As per reports, the demand for housing loans had risen in the last quarter by up to 40% across India. As an aspiring homeowner, you may have already signed up with a lender offering a competitive rate of interest and may also have taken into consideration the various home loan tax benefits that work to your advantage as a borrower. However, with the pandemic creating a strain over household incomes, making repayment more affordable is the most common reason to look for refinancing options with a home loan balance transfer.
During such times, when you already have a housing loan with a lender, refinancing your loan at a lower interest rate is the most cost-effective solution. Here’s a detailed guide of the many factors to consider for an easy home loan balance transfer for lowered monthly payments.
Check your eligibility for a transfer
A balance transfer is considered by most lenders to be a fresh home loan application. You will have to furnish all documents required for a home loan, such as address proof, identifications, and income and employment details as well as property papers for verification. Your repayment history will also be scrutinised, so that lender can assess the risk you pose as a borrower. Your current repayment behaviour will also be taken into account so ensure that you have paid your EMIs on time before you opt to switch your home to a new lender.
Pick an option that offers additional finance
A top-up loan offers finance over and above the approved home loan amount to offer you additional funds based on your repayment profile. If you have paid the housing loan EMIs for the last one year without delaying or defaulting, then you are usually eligible for a top-up loan. With its nominal interest rate and due to no limits on the use the funds, a top-up provides an exception source of finances for diverse requirements. This option is usually available to you when you carry out a home loan balance transfer.
Have a reliable credit score
Your credit score is an important aspect as most lenders will check your repayment history to ascertain the risk they are taking on by offering you the chance to do a home loan balance transfer. So, check your score before you apply for this and ensure it is above 700 to be eligible as per most lenders in the market.
Check the home loan balance transfer fees
Remember, switching your home includes charges such as balance transfer processing charge, valuation charges, legal or technical fees, documentation charges and more depending on your existing and new lender. Take these into account as they add to your cost. Ensure that your savings are more than all these fees put together and only then transfer your housing loan.
Opt for the right time to switch your loan
If your housing loan is still in its early years, it is smart to switch lenders. This is because you will be repaying more of the interest during the first half of your tenor via your EMIs compared to the second half, when you will be repaying more of the principal component. When you switch during the first half of repayment, you will be able to save more when you opt for a home loan balance transfer.
Select the most economical interest rate
Refinancing with lower interest rates is important, however, you must also only consider a home loan balance transfer if your new lender’s rates are substantially below what you are currently paying. This will help you reduce your EMIs or your loan tenor and reap the benefits of switching your loan.
With this information in hand, you can now make the most beneficial and cost-effective decision about your home loan balance transfer. The Bajaj Housing Finance Limited Home Loan Balance Transfer, for instance, offers competitive rates when you meet the eligibility guidelines and submit the right set of documents required for home loan balance transfer.
Here you can qualify for a high-value top-up loan to meet your diverse funding requirements too and repay it and your home loan comfortably with a tenor of up to 30 years. What’s more, you can continue to claim your home loan tax benefit and make planning this easier by using online tools such as a home loan tax benefit calculator. So, get started and to refinance your loan with ease, apply online with a simple application.