Home Loans - Simplified Facts

When you go for house hunting you are confident that your income being 35 thousand Indian Rupees will definitely go on increasing and as you move up the ladder you will be able to pay larger EMI (Equated Monthly Installments). So you happily go in for a larger house as compared to other options and lenders are happy to provide you loan, they earn from high interest.

The journey of repaying the home loan begins with smaller EMIs and proceeds with increasing in amount. Many people opt for flexible rate of interest in the repayment schedule as they are confident about their increase in salary over the years. But it is better to take a informed decision than be sorry later.

Reaping EMIs is a stressful task since this goes on for 10 to 20 years. Hence an intelligent borrower would research the market, search for rates of interest and go in for the best deal, the one which helps to save precious interest over the years.

When you go for house hunting you are confident that your income being 35 thousand Indian Rupees will definitely go on increasing and as you move up the ladder you will be able to pay larger EMI (Equated Monthly Installments).

So you happily go in for a larger house as compared to other options and lenders are happy to provide you loan, they earn from high interest.

The journey of repaying the home loan begins with smaller EMIs and proceeds with increasing in amount. Many people opt for flexible rate of interest in the repayment schedule as they are confident about their increase in salary over the years.

But it is better to take a informed decision than be sorry later. Reaping EMIs is a stressful task since this goes on for 10 to 20 years. Hence an intelligent borrower would research the market, search for rates of interest and go in for the best deal, the one which helps to save precious interest over the years.

[Source: http://homeloans-simplifiedfacts.blogspot.in/]

Refinance Home Mortgage Loan Application Process

Attractive low interest rates offer the home owners the chance of lowering their monthly outgoings by refinancing their home mortgage loan. There may be so many different reasons why people refinance their mortgage. We will cover main points in application process to give you an idea as to how it works and what you need to look out for.

Although the lower interest rates are the main reason for wanting to refinance, people might have a valid reason to refinance in any economic condition. Refinance mortgage may allow you to reach your objectives. This could be as simple as wanting to lower your mortgage interest by a straight swap between a high interest existing mortgage and lower interest refinance. Or as complicated as consolidating all your loans, credit cards and getting extra cash to provide cash flow for your business. Home improvement is another obvious reason for refinance mortgage.

As you can achieve most of your objectives with a home equity loan as well without touching your existing loan, refinance needs to offer lower interest rate for you to be worthwhile to switch the lender.

In the internet world we are living, you have no excuse not to have a thorough search of the available options before doing anything else. Find out what is on offer from refinance to Online Home Loan. Then compare them with your existing loans and see where each fits in terms of providing you with a solution.

Next step is to prepare the documents needed while you are considering your options. The basic documents include your employment records, bank statements, credit card statements and income and expenditure statements as well as the details of your existing loans. Once you are convinced that you could benefit from refinance after paying all the costs involved with the mortgage application and obtaining mortgage, you need to apply for a pre-approval to several lenders. Pre-approval is a way of checking that you are eligible for the loans without incurring any further expenses.

When you have at least two pre approvals in your hand, you can start the elimination process to get to the lender you will apply for refinance mortgage. Make sure you understand the mortgage terms, fees, pre-payment penalties and how will your interest rate be calculated. Is this a fixed rate, flexible rate or a short term fixed rate that will convert to flexible rate? Depending on refinance mortgage, the affordable rate you see today may not be that affordable in a year or two.

If you are convinced that you understand what you are getting into and happy with it, you need to fill out your mortgage application. Get all your documents out ready to fill the form. The application form needs to be complete and reflects the true picture of your financial position. Incomplete applications will not be considered by the mortgage underwriters. While you are filling your application, put yourself into the shoes of the lender. Try to give them reasons to give you mortgage. If you have particular issues, such as one missed payment in your otherwise clean mortgage payment history, provide full explanation and documentation.

[Source: http://mortgage-assumption.blogspot.in/2012/06/refinance-home-mortgage-loan.html]

Debunking the Top 3 Home Loan Myths

According to a recent research conducted by Karvy Private Wealth, Indians largely invest in Real Estate and Gold. Putting all their lifetime savings into a plot or a house has always been considered to be the best investment option in India. Because of this notion, people often equate one’s status to the number of houses they own. But modern Indians have realized that investing a huge amount of money in a single huge asset isn’t necessarily a good option and are instead switching to Home Loans. It’s no wonder that the Home Loan segment makes up the largest proportion of all credit products in India!

With almost all major banks in India offering unique Home Loan products with competitive interest rates, choosing one perfect loan scheme can be quite a daunting task. Without a proper understanding of the Home Loan clauses, you could easily fall victim to some common misconceptions. Here are the top 3 Home Loan myths floating around.

Myth 1 – Increase in Interest Rate Translates to Inflated EMIs

Simple math, right? NO! Whenever a bank revises the base rate, the knee-jerk reaction of many borrowers is the anger that the increase in interest rate will cause chaos in their monthly budget.

Ah, but this might just be the biggest Home Loan myth ever. In line with the interest rate changes, the tenure could fluctuate over an interest rate cycle. In fact, banks generally extend the tenure to keep the EMI amount unchanged in case there is an interest rate change. By default, it is the tenure that is extended to keep the installment amount the same. Try using an online Home Loan Emi Calculator to get an idea of how your repayment will progress over the tenure.

Pro Tip – If you do not want to prolong the tenure, you just have to inform your bank that you are okay with servicing a higher EMI. Keep in mind that you are actually hurting your finances by extending the loan tenure as you will end up paying a lot more in interest. Try to prepay your loan in parts or refinance the loan to reduce your tenure.

Myth 2 – The Deal with the Best Interest Rate must be the Best Deal

While the cheapest detergent powder might be a good detergent powder, you cannot apply the same logic to Home Loans. Dig deeper to ensure that your lender is indeed giving you the best deal – check out the valuation charges, prepayment penalty & processing fee in addition to the interest rate. At first glance, the deal might look tempting, but it might not be flexible or might come with higher fees.

Pro Tip – Think about the Home Loan features that will best suit your finances and objectives before you zero in on a lender. Compare Home Loan options before you apply for one!

Myth 3 – Borrowers must always opt for a Shorter Tenure and try to close the Home Loan Account as soon as possible

Most borrowers opt for the shortest loan tenure possible for Home Loans to avoid repercussions from an increase in Repo rates by the RBI. But think about it; shorter tenures also mean higher EMIs and you risk facing liquidity issues if you don’t manage your money carefully. Instead, try to save some money side by side and invest in options that give returns of at least 12% to 15% which are normally greater than the 10.5% to 11.5% interest that you pay on your Home Loan.

Pro Tip – Diversify your investment portfolio! Pay off your Home Loan debt early by investing some money in other products rather than increasing your EMI by reducing the Home Loan tenure.

[Source: https://blog.bankbazaar.com/debunking-the-top-3-home-loan-myths/]

How to Choose your Home Loan Lender?

The foremost thing to be kept in mind is that one should never finalize a lender on the basis of interest rates. Most of us choose home loan lender on the basis of interest rates, cheapest the best. But actually, there are various other things that should be kept in mind while finalizing home loans.

Check your home loan eligibility with various banks: Various banks have their own methods ad standards for calculating eligibility. You should do some shopping to check which bank is offering you higher loan eligibility. Adding up your spouse income may also be a good option to increase your home loan eligibility.

Fixed or Floating interest rate: A fixed interest rate means that you will have to pay same EMI over a period of time (it may be fixed for entire tenure or it may be reset at fixed interval). Floating interest rates may change at any given point of time, which may result increase or decrease in either your home loan EMI or your tenure.

Processing fees: This fee is charged by the bank for processing the home loan and is not refundable. In case you decide not to take the loan from the bank, then the entire amount you have paid towards processing fees is lost. This generally varies in the range of 0.5 to 1% of the total home loan amount. Also payment of processing fees doesn’t means that your loan is passed. It may happen that you pay the processing fees but still your loan is not sanctioned due to various other reasons. Thus before paying the processing fees, you should bargain on the same and get it confirmed from the bank in writing.

Prepayment fees Prepayment fees come in to picture in case one wants to prepay his home loan from various sources. It may be from his personal savings or if he is planning to switch the loan to a different lender. Few of the banks offer no prepayment charges in case the prepayment is done from own sources. But in case the person is shifting the loan to a different lender then most of the banks ask to pay a fee in the range of 1% to 2% of the outstanding loan amount.

All the charges should be always being taken down in written from the bank and the written document should be preserved in case the bank asks the person to pay up some different amount after sometime.

Once you are satisfied with the above clauses and the interest rate offered by the particular lender, you should go ahead and buy your dream home.

Along with that it is always said that you can get the best home loan deal only after your property is finalized. So before you start with your loan hunting, we would suggest you to finalize the property.

[Source: http://www.apnapaisa.com/how-to-choose-your-home-loan-lender/]

How Loan Easy is solely working for Customers

How Loan Easy is working solely for the customers.

What are Loan Portals? A loan portal is an online comparison tool presenting information/loan offers from various banks on a single platform.

Loan Portals should ideally be used as research enhancers, to help one narrow down to bank options during the decision making stages of choosing a bank offer. It is also important to understand that loan portals at best provide estimations and not specific figures to any individual.

There are many loan portals out there, Loan Easy.in is one of them, and however this blog will highlight how Loan Easy is different from all the others in existence and how we are solely working for the customers.

Educational Material: A lot of the recent surveys indicate that a shocking 76% of the Indian population is financially illiterate. This causes a lot of misunderstanding of financial products and in many cases leads to miss-selling on part of the bank agents. The only way to counter this widely prevalent problem of miss-selling is to make critical loan related information easily available to all users, especially to first time home loan applicants. 

Since most of us go through the home loan application process not more than once or twice in a lifetime, a vast majority of us end up learning more about what to look for in home loans after having taking the loan, by such time it’s already too late for any corrective actions. At Loan Easy we present a wide range of topics and subjects aimed at a first time home loan applicants. Click here to read Loan Easy Blogs.

No Logins: As mentioned previously loan portals make all the various bank offers available at a single point of contact. However all this information comes at the cost of personal information like email ID and phone number? This personal information is then converted into a ‘lead’ and in most cases passed on to partnering banks. Loan Easy presents comparative data across banks without any login requirements from the customer. Only when you choose to go ahead with Loan Easy services, are you required to create a ticket based on Service Level agreements,

Self-Solicitation: We at Loan Easy believe that the customer should have the power to decide the offer best suited for him/her. This is why Online Home Loan  Easy presents each of its customers with a table of comparative data across banks, empowering the customers to make the best data driven decisions when it comes to choosing loans. Click here to get comparisons across banks for home loans.

End to End Loan Servicing: Most bank agents will stop calling you the minute after the loan is disbursed or in other words once the ‘sale’ is completed. Loan Easy’s services cover the entire life cycle of a loan. Our services are not limited to guiding customers save tax on Home loans post disbursal but also include extending support required to transfer an existing loan to a better bank offer. Learn more about our simplified 5 step home loan process.

Free Services: Loan Easy guides its customers with critical loan information during the decision making process and then extends support with door step documentation and loan application. Loan Easy then brings each of its customers a case by case specific quotation from the banks saving time wasted on visiting multiple banks.

We also follow up with the banks to ensure timely sanction and disbursal of the loans followed by providing post disbursal support like tax saving consultation, loan transfer support if required. All of these services rendered by Loan Easy are completely free of cost to its customers. Which also undersigns data privacy agreements ensuring that the confidentiality of all your data is maintained?

[Source: https://loaneasy.in/loaneasy-solely-working-customers/]

Online Tool for Home Loan EMI Calculator

The most important aspect of a home loan is its repayment, which is, the Equated Monthly Installment (EMI). Simply put, EMI is the sum of the principal amount and interest on the principal divided by the loan tenure (in months). You will find home loan EMI calculator available on websites of almost all lenders and informational websites. This reduces the stress of doing complex calculations on your own.

How Do I Use the Home Loan EMI Calculator?                                                                                 

For the online calculator tool to compute your EMI, you need to either enter the following information or move the sliders in the tool to your left or right to adjust the following values:

·         The amount of loan you want (principal)

·         The rate of interest available to you (interest)

·         Term of the loan (in years or months)

·         The method of computation (optional)

·         Annual reducing method: the principal amount and the rate of interest is made at the end of the year. (OR)

·         Monthly reducing method: monthly reduction in principal as the EMI is paid monthly and the interest is calculated on the outstanding balance.

The annual reducing method is disadvantageous to the borrower and therefore the monthly reducing method is commonly used in EMI calculation.

What Results Does the Calculator Provide?

The home loan EMI calculator displays an easy to understand payment schedule and visual charts. A tabular breakdown of the two components of an EMI, principal and interest, is provided in the monthly payment schedule. It also indicates the loan balance after every payment. The colorful charts display what percentage of the total payment that you will make, consists of the principal and the interest. The longer the tenure of the loan, larger is the interest percentage.

Are There Tools Available to Calculate EMI for Home Loan Transfer?

If you want to take advantage of a lower interest rate by refinancing your existing home loan, there are online tools available to help you calculate your revised EMI and also calculate the amount of money you will save, should you go for a home loan transfer to another lender.

How do I calculate the EMI on the Refinanced Home Loan?

In order to calculate your revised EMI on balance transfer to another lender, the following information regarding you existing home loan and new loan needs to be entered into the tool:

Existing home loan information:

·         Outstanding loan balance

·         Existing rate of interest

·         Current monthly payment (EMI)

·         Pre- payment fees (if applicable

New loan information:

·         Current interest rate offered

·         Loan processing fees (if applicable)

·         Loan tenure

·         Current monthly income (required in some tools)

The home loan EMI calculator will show the revised EMI that you will have to pay if you go for the home loan transfer. Some tools will also provide you with the total amount you will save on your new loan repayment compared to the existing total repayment (over the tenure of the loan).

If you want to make smart financial decisions, there is no dearth of online tools at your disposal. Whether you are planning to buy a house or thinking of refinancing your house, you can get all the questions answered with easy to use tools available online.

 Source: https://homeloanemicalculator.quora.com/Online-Tool-for-Home-Loan-EMI-Calculator

What Is The Perfect CIBIL Score For A Home Loan?

Thinking of getting a Home Loan? That’s great, but have you given a thought to your CIBIL Score? We’ll hello you find out what the ideal CIBIL Score for your Home Loan is!

What is a Credit Score?  

A Credit Score, also commonly referred to as a CIBIL Score, is a numerical evaluation of your credit history.

Range of a Credit Score

A Credit Score usually varies between 300 and 900. When your Credit Score is calculated, it takes into account all the secured or unsecured loans that you have, or have had in the past. That’s why it’s called your credit history.

What is a Good CIBIL Score for an Online Home Loan?

If you have a CIBIL Score that’s anywhere above 700, you’re in safe territory.

700 is good, but can it get better?

Now that you ask, get a Credit Score closer to 900 and your bank or lending institution will have more faith in your repayment capability.

I have a good Credit Score

That’s good news! A good Credit Score can get you as much as 85% financing on the total cost of the property.

Why your CIBIL Score matters

Your CIBIL Score is an important factor in your Home Loan application. If your Credit Score is low, your application is likely to be rejected. A good Credit Score means that your Home Loan application could be fast tracked. Every bank has a minimum CIBIL Score. This is used as an indicator for acceptance or rejection of your application.

A score above 750 is termed as a good Credit Score.

A score of 350-750 is average, or possibly unacceptable

Any score below 350 is poor

How you can improve your CIBIL Score for a Home Loan

Here’s your guide to improving your Credit Score for a Home Loan.

A little financial discipline goes a long way.

Timely payments

Pay all your bills on time. Remember to pay the full amount. A part payment will be reported as overdue and no bank appreciates late payments.

Do not exhaust your credit limit

Keep those outstanding balances as low as you can. This will help your Credit Score.

Review your Credit Score periodically

Keep an eye on you Credit Score. Check it regularly, to avoid any unexpected surprises when you apply for any financial products.

[Source: https://blog.bankbazaar.com/what-is-the-perfect-cibil-score-for-a-home-loan/]

Suit yourself: How to choose which home loans suit you best?

While home loans are easily available, it is essential to avail of the one with the lowest interest rate, thereby saving money. Important criteria such as loan percentage, lowest fixed and floating interest rates, availability of prepayment option, special concession for women and senior citizen etc, will help people to choose the home loan best suited for them.

Taking a home loan in present day has become very simple due to more banks and private lenders offering flexible interest rates and various budget options. In this wide market, it is important for one to do their research and choose the one which allows them to save the most money. Every year, banks launch new home loan schemes and introduce loan options which suit the economic trend of the country. Public sector banks will not raise the home loan interest rate as they are pressurized by the finance ministry to protect the home loan borrowers.

Four ways in which you can identify a good home loan scheme are:

1.      Check the percentage of loan offered:

One can decide which is the best home loan based on the percentage of the home loan offered. If one bank is offering 80% of the amount required to buy the house and another is offering 85%, it makes sense to choose the latter. This is helpful only if you are unable to afford large sums for down payment but subsequently, your EMI will increase in the percentage amount offered.

2.      Analyze the interest rates and prepayment charges:

The smartest way to save on home loans is to choose one based on the rate of interest and free processing offered. Checking for the EMI, prepayment charges and processing fee and looking at comparative rates are good ways to sift through to the best home loan offers. According to the RBI, banks are not allowed to collect a prepayment charge from home loan borrowers for floating interest rates. It is also easy to change the loan from one bank to another along with the transfer of balance.

3.      Consider loan process and time involved:

The process of applying for a loan is a lengthy procedure and requires the submission of many property and income related documents. The time taken for the application to be considered and the loan to be disbursed differs from bank to bank, but this time should also be taken into account when considering a loan. Apply to a bank which has a simple process and saves time with better schemes. While there are agents who can guide you through this process, it is not possible to gauge their credibility. Researching can help you find the best home loan schemes which take the least amount of time. Applying for a loan online would also reduce the amount of time it takes for the loan to be approved.

4.      Special concession schemes:

Some banks would offer special concessions to senior citizens and women which would save them a considerable amount on the interest rate. People could also look into different kinds of loans such as hybrid loans, joint loans, etc.

Choosing the best Online home loans scheme would mean that you would save money in the long run. When the plan is suitable to your financial conditions, it also reduces the stress induced by taking a home loan.

Source: https://homeloanemicalculator.quora.com/Suit-yourself-How-to-choose-which-home-loans-suit-you-best