Home Loan

How to Get Lowest Interest Rates on Your Home Mortgage

Though selling and buying properties is very ordinary, at least for those who are in realty sector, it is still a tedious and time consuming process. This happens especially if you decide to do it on your own. It is good if you have made up your mind to buy a home for your family and are ready to apply for a home mortgage in a bank. Before you do so, there are some important points to consider. It is true that getting a home loan today is much easier in comparison to what the situation was a few decades ago, it is still a once in a lifetime decision as you do not buy a property every few years, do you? It is therefore necessary to do your homework before taking a plunge.

First of all, it is imperative to know the interest rates prevailing in the home mortgage sector. Then, depending upon your requirements, you can easily calculate the EMI that you have to pay to the bank that grants a home loan to you. Now, this interest rate is dependent upon many factors, most importantly upon your credit score.

If you have a decent score, you can even negotiate with the bank to lower the interest rate in your case. However, if you have a low score, do not make a mistake of presenting your home loan application to any bank manager. This is because loan advance managers judge your credit worthiness solely on the basis of your credit score. If your loan application is rejected several times, it becomes progressively difficult for you to secure a home mortgage. This is where experienced brokers working in the field of home loans come into play.

You could actually find that there are dozens of companies working in the field of home loans and refinance. Remember, you are important to them as much as they are to you. Thus, it makes sense to compare the features of the service that these companies are providing. No, you do not need to go physically to the offices of each company. Instead, you can compare the companies from your own home by logging on to the websites of these companies. Just type the amount of money you need and the Emi Calculator Home Loan that you can realistically pay to the lender. Depending young your details, you can get the rates of interest at which these companies can get you home mortgage.

The biggest advantage that these companies have is that they can match your requirements with the best available home loan product in the market. This is something that you cannot hope to achieve on your own. You not only save a huge amount of money in terms of lower rates of interest, you also save on your valuable time and effort. Just make sure that there is no fine print behind the attractive features of the company whose services you are hiring to secure your home mortgage.

[Source: http://ezinearticles.com/?How-to-Get-Lowest-Interest-Rates-on-Your-Home-Mortgage&id=6156792]

Banking for NRIs: It's All About Ease

 In a globalized, networked world, where business and commerce has moved from the traditional 8 hour work day, geographies and boundaries have dissolved in the face of technologies. Post liberalization, India has moved on to a less stringent exchange regime and this has made it easier for the NRIs (Non Resident Indians) to remit funds back home.

Every year, Indians living abroad use 3 types of NRI accounts to transfer funds. It's believed that remittances from NRI's abroad to India in 2010-2011 were to the tune of 55 billion US dollars.

NRI's can operate three kinds of accounts in India. All the major Indian banks, both public sector and private offer these accounts to their customers. Online money transfer from these accounts has drastically reduced the time taken for funds to be transferred to India.

Non Resident External accounts: NRE

· Funds In these accounts are held in Rupees

· NRIs can open these accounts

· Funds from abroad can be deposited in this account

· This type of account can be held jointly

· Funds in this account can be remitted to any country without requiring prior permission from the RBI.

· Nominations can be made for this type of accounts

· The interest earned on income is not subject to income tax in India.

Non Resident Ordinary accounts: NRO

· This account can be opened by an NRI or even a resident before becoming an NRI

· NRO accounts can only contain funds received in India

· The funds cannot be remitted abroad of to another NRE account

· NRO accounts can be held jointly by a resident and an NRI

· Interest earned on deposits in an NRO account is taxable as per prevailing rates in India

Non-Resident Foreign Currency Account: FCNR

This allows NRIs/PIOs to invest in deposits in India, in foreign currency. The idea is to protect the NRIs from fluctuations in the exchange rate. Currently FCNR deposits can be maintained in 6 currencies.

· US Dollars $

· Euros €

· British Pounds £

· Australian Dollars

· Canadian Dollars

· Japanese Yen ¥

FCNR accounts are an attractive way for NRIs to get a good rate of interest on their deposits.

· They can only be opened by NRIs

· The term is between 1-5 years

· These accounts can be held jointly

· Nomination facility is available

· Home Loan India can be availed against these deposits; however these loans are restricted in their use and amounts, by the law.

· The interest earned on the deposits is not taxable in India.

· The principal deposit is not taxed as Wealth Tax in India

· An overdraft of upto 90% of the deposit or Rs 1 crore, whichever is more, is generally given to a FCNR account.

[Source: http://ezinearticles.com/?Banking-for-NRIs:-Its-All-About-Ease&id=6899594]

Choosing an Online Home Loan Calculator

As the adage goes, something that cannot be measured cannot be improved. This fact is inclusive of most things in life including home loans. If you're looking to live a debt free life, first make sure you calculate how much you can afford to spend. A home loan calculator is a great tool that'll help you get an idea of the monthly and yearly payment breakdowns. The calculator allows you to assess your mortgage payment options.

While some provide a simple calculation of the monthly spending that you can afford, after you key in the interest rate and the other expenses, there are some others that are elaborate and help you calculate several things. For example, if you'd like to know the maximum housing loan amount based on the annual income and the ability to service the loan, choose from a home loan calculator that determines the affordability of your loan.

All that you've got to enter is the monthly salary, the start interest rate, the loan term period and the maximum percentage of income that you can afford to spend, and you have a calculator that tells you the maximum loan amount that you can ask, and the maximum monthly mortgage payment that you can make.

You can also find out how susceptible you are to changes in interest rates in the market. Enter the principal amount, interest rate variation and the Loan for Home period, and you can know how changes in the interest rate can affect your monthly expenditures. And if you're an investor, you can look at a home loan calculator that gives you the potential yield from your investment.

Depending on the amount that you can afford, or the interest rate or the term period that's best for you, you can choose from a loan provider. And if you've already availed a Loan for Home , the home loan calculator can help you determine the monthly income that's need to stay afloat and avoid a foreclosure. There are several variants of the calculator, make sure that you are in tune with the method of calculation with the loan provider.

Rather than having to make complex calculations, where you often lose track of what you were calculating in the first place, or ask for help from your finance consultant, it's best to use a home loan calculator that can do all the calculation for you. You end up saving time, and energy using these calculators that can easily perform the most complex of calculations. But choose from a good website, rather than visiting the first site that's thrown up on the search result.

[Source: http://ezinearticles.com/?Choosing-an-Online-Home-Loan-Calculator&id=6430000]

Tax Benefits Associated With Housing Loans

Multiple benefits - how?

EMI (elementary monthly installments) consists of two parts - the interest portion and principal amount. Interest paid is allowed as a tax benefit under section 24(b) (subject to restrictions), while the principle amount repaid is allowed as a deduction under section 80C.

Maximum ceiling on tax benefit

Maximum tax deduction for repayment principal component of home loan can't exceed

Rs 1, 00,000 under section 80C. One should keep in mind that other investments/contributions are also allowed as a deduction under section 80C, and this limit of Rs. 1,00,000 applies to all of them put together.

Housing loan interest deduction, on the other hand, is allowed up to a maximum amount of Rs 1, 50,000 under section 24(b). However, the acquisition or construction of the house property should be completed within 3 years from the end of financial year in which loan was taken; otherwise, the amount of interest benefit allowed is only up to Rs 30,000.

Furthermore, the above tax deduction limit u/s 24(b) is applicable only for self-occupied house property. In case of let-out or deemed to be let out house property, interest is deductible without any limit.

Starting date for claiming tax benefit

Some say that deduction on principal component of home loan under section 80C is allowed as soon as one starts repaying the home loan. Some say deduction is allowed only once the construction is completed. The law isn't clear on the matter; hence the ambiguity remains.

Interest deduction on house loan under section 24(b) is allowed only on acquisition or completion of the house property. However, interest deduction for pre-acquisition or pre-construction period is also allowed but only after acquisition or construction is complete. It is allowed in 5 equal annual installments. But even after including the above, the total deduction should not exceed Rs. 1, 50,000 per annum.

Source of home loan

Unlike section 24(b), Section 80C doesn't allow tax deduction for home loans taken from friends and relatives. For claiming tax benefit on principal component of the home loan under section 80C, you need to borrow only from the lenders specified in that section. There is no such restriction under section 24(b) of the IT Act for claiming tax benefit on interest component of the housing loan.

Purpose of housing loan - Home purchase / construction vs.

Home improvement Deduction under section 80C for principal portion of the housing loan EMI is not allowed if the home loan borrowing is for the purpose of reconstruction, renewal or repair of house property. Put simply, tax benefit under section 80C is only allowed for buying or constructing a new home. In contrast, deduction for Interest is allowed under section 24(b) even for the loan taken for the purpose of repair, renewal or reconstruction of existing house property but subject to the limit of Rs 30,000 in case of self-occupied house property. In case of let out house property, actual interest is allowed without any ceiling.

Payment Basis - Due Basis vs. Cash Basis

Tax benefit u/s 80C can be claimed only when the actual payment is made. Interest deduction u/s 24(b), on the other hand, is allowed on accrual or due basis. Put simply, unlike principal portion, interest deduction can be claimed even if not paid.

[Source: http://ezinearticles.com/?Tax-Benefits-Associated-With-Housing-Loans&id=6743691]

Some Things to Note When Making Housing Loan Comparison

There are numerous forms of housing loan packages available in the market. When you make housing loan comparison, it is imperative that a fair comparison is made. Being negligent to this can result in comparing mortgages that does not make sense. Sort of like comparing an apple to an orange.

For example, it cannot be realistic comparing a 15 year mortgage to a 30 year mortgage. It also does not make sense to compare housing loans with fixed interest rate to those with floating interest rates. Make comparison between different mortgage lenders with near similar structure on lock-in period and interest rates. This can also vary especially if the mortgage lender is one that is willing to be flexible on their housing loan packages. You might even get into a situation where you have to choose between favorable prepayment penalties and favorable interest rates and vice-versa.

Adding up the total fees and charges at closing will give you a good picture of which offers are the most attractive on signing up. There can be a varying number of charges and fees carrying different labels. Mortgage lenders may treat these fees differently. One may give subsidies but charge higher processing fees. Another may waive processing fees provided you take up their in-house home insurance package. So it is best that you figure out these details on closing costs before making your choice on an offer. Add up all the fees involved to make a fair and proper housing loan comparison.

Note that lower interest rates will not necessarily mean a better deal for you. Look carefully into the terms of the deal. It can be low rate for only an initial first year of the loan, and much higher rates after that. Remember to question the details of closing costs before giving your commitment to accept a House Loan offer from a lender.

When you are fully aware that you are going to switch mortgage lenders after the lock-in period, you should take greater care in your offer selection. This is because the redemption penalty will be of meticulous concern to you. However, if you are willing to pay higher interest rates and obtain favorable penalty terms, tell your mortgage lender. You wouldn't know how flexible they can be if you don't ask.

For example, when you are looking at housing loan offers with a floating rate in Singapore, it is most commonly bench-marked to the publicly available Singapore Interbank Offered Rate (SIBOR) or Swap Offered Rate (SOR). A margin is added on top of the available rates, and that becomes your interest rate.

Generally, SIBOR is more stable while the SOR is more volatile in fluctuation. So an individual with an appetite for calculated risk may choose a housing loan bench-marked to the SOR when it is low. Do ask questions on current outlooks when deciding offers between these 2 benchmark rates. Because rates can change daily, the lenders are in the best position to provide you timely information on interest rates.

The most widespread deciding factor that influences an individual on a housing loan decision is the loan-to-value ( LTV ). The LTV is the amount that a mortgage lender is willing to offer the borrower for the housing loan. The common practice is to finance an amount based on the market valuation or purchase price of the property in question, whichever is lower. It simply means that a house has a current market valuation of $ 400,000 and you bought it for $500,000, the mortgage lender will only be comfortable to finance a portion of the valuation price at the lower value of the 2 - $400,000.

Don't assume that a lender will finance 80% of a property purchase just because you heard of it from a friend. Be careful on this and check with a lender on how much they are willing to finance. This is because different properties in different categories can be treated differently by a lender. They may be willing to finance 80% of properties in category A while only 60% of properties deemed to be in category B. whereas; a different lender may have an internal policy that is the other way around.

Different mortgage lenders can have differing lending policies. Factors like proposed redevelopment, location, etc, can be determining factors. So be careful when comparing housing loans. Decisions from one lender do not necessarily serve as a reflection of the whole market.

[Source: http://ezinearticles.com/?Some-Things-To-Note-When-Making-Housing-Loan-Comparison&id=5654350]

Home Loans are Tax Friendly

For most Indians, owning a house isn’t just an investment but pride. ‘Home- Sweet-Home’ is tailored by your tastes and relationships. It is the space of your absolute freedom. Everyone dreams of owning a house but certainly have misconceptions about it. The real-estate boom in India is attracting foreign investors too in this sector. Choosing a flat/property to your tastes is easy because you decide. But, one requires a little financial know-how before planning for it.

With the rise of housing finance institutions, owning a house is now pocket-friendly with a home loan. With the advent of selling flat/property online, the segment has become more competitive but to the convenience of the consumer. Though buying a house is an expensive proposition, growing real estate prices made almost impossible to own a house without a home loan. The home loan is such a credit facility where interest rates are cheaper and tenure is longer. Not only that, it comes with exciting tax benefits too while income tax filing.

The amount that a bank can lend is up to 80% of the property value. This depends up on various factors to check the eligibility. Banks are strict with these checks and otherwise bad loans can become burden for them. Every lender tries to ensure the borrower’s capacity to repay the equated monthly installments (EMIs) in time and repay the principal amount. To do this, they would look up to your credit history, current assets, liabilities and other financial details.

Tax Planning:

The biggest benefit in availing home loan is that one can plan their tax savings after considering all deduction benefits while filing I.T.Return. All home financing companies including banks usually give a provisional certificate at the start of the year which is based on EMIs and break up of principal and interest. This certificate will give you a fair indication of how much principal has to be repaid and how much interest has to be paid for that year. Based on this, you can plan for other investments. At the end of the year, you will get an original certificate based on the actual EMIs paid for that year. This certificate has to be submitted along with the income tax returns to claim the deduction.

Let us now dwell upon various tax benefits on availing home loan:

Any home loan will have two components in it namely, principal and interest. While income tax efiling one can get tax benefits through home loan under two different Sections of Income Tax Act.

Under Section 24– Deduction on interest on home loan for self-occupied property up to Rs 2 lakh.

Under Section 80C– Deduction on repayment of principal amount on home loan up to Rs 1.5 lakh.

Deductions in both components of a home loan are therefore governed by two different sections of the same Income Tax Act.  If the above sections are expanded in detail:

Tax benefit on Principal Amount:

The amount paid as repayment of Principal Amount of home loan by an Individual/HUF (Hindu Undivided Family) is allowed as tax deduction under section 80Cof Income Tax Act while filing I.T.Return. The maximum tax deduction allowed under Section 80C is Rs. 1, 50,000. (Increased from 1 Lakh to Rs. 1.5 Lakh in Budget 2014). The Amount paid as stamp duty & registration fee is also allowed as tax deduction under Section 80C even if the loan is not taken. However it is important to note that tax benefit of home loan under this section for the repayment of principal part of it is allowed only after the construction is complete and the completion certificate has been awarded. No deduction would be allowed for under construction properties.

Tax benefit on Interest Amount:

Tax Benefit on Home Loan for payment of Interest is allowed as a deduction while filing income tax return under section 24 of Income Tax Act. As per Section 24, the income from house property shall be reduced by the amount of interest paid on home loan where the loan has been taken for the purpose of Purchase/ Construction/ Repair/ Renewal/ Reconstruction of a Residential House Property.

The maximum tax deduction allowed under Section 24 of a self-occupied property is subject to a maximum limit of Rs. 2 Lakhs (increased from 1.5 Lakhs to Rs. 2 Lakhs in the 2014 Budget). In case the property for which the Home Loan has been taken is not self-occupied, no maximum limit has been prescribed in this case and the taxpayer can take tax deduction of the whole interest amount under this section.  This is the best part of it because you can avail the same benefit upon all interest paid if you rented your house without you (owner) residing in it.

Using the above sections to the most of our benefit, the following opportunities can be explored:

Taking a joint loan- One can avail home loan with co-borrower as spouse, if working. All benefits under sections 80C and 24 of Income Tax Act can be enjoyed for each borrower. If you take home loan under 50:50 ratio, the overall tax savings of the household can be increased. The spouse earning more should have more portion of the loan to avail maximum benefits.

HRA (House Rent Allowance) Benefit- If you stay in a rented house and paying rent and at the same time availed a home loan for your own home, you can avail benefits of both HRA and home loan. This is subject to your home receiving rental income which is taxable.

Interest Rates on your home loans:

RBI has maintained status quo in the first policy of this financial year and the governor insisted upon monetary transmission of benefits of previous repo cuts.

Many banks have reduce their loan rates by almost 25 basis points as a result of which an interest rate war has triggered which will soon be followed by other lenders too. Most lenders at present can offer home loans at 9-10 percent. This competition would benefit home loan consumers, who have been struggling under high EMIs for years. As inflation is under control, one may expect more rate cuts in near future.

            One can apply for a home loan online with all end to end assistance in documentation and consultation process. To avail home loans hassle free and get best quotes, calculate your EMI’s visit: home loan emi calculator

Calculate your housing needs easily with home loan calculators

If you can dream about owning a house, you can surely own it! With the right kind of knowledge about the home loan product it can be quite fun and exciting experience. Today, there are lots of government and private sector banks & finance firms that offers customized forms of home loans to their clients. People can approach these banks and private financial firms to get the best deals on home loan interest rates and other processing charges. It is obvious that owning a house means lots of pros and cons associated with it before finalizing a bank. When you visit a bank or an agent they will ask you to purchase a home loan,  with protection cover or other protection commodities along with housing finance. They will assure you that it will be added to your loan amount or at times an individual is completely clueless on how much loan amount he or she needs on the grounds of place for living, income source, building or society requirements, interest rate applicable, EMI to pay, etc. They feel like lost in a sea of confusion without the right form of knowledge. Relax! Finding the right home loan amount and understanding various jargons & terms associated with it is quite easy with the help of home loan EMI calculators offered by banks & firms online. Here are some tips that will help you find the right home loan in an easy manner:

Today, India’s leading private sector banks & firms are offering housing finance with new structure of loans that are developed to meet the needs of house buyers from every section of the society. However, before choosing a particular loan, it is very important to have a comprehension about the most important constituent of the loan – the EMI (Equated Monthly Installment). An EMI is a certain amount of money that an individual pays to the bank as pre-decided in the terms & conditions of the loan policy towards obtaining the legal possession of the house in near future. It is paid each calendar month, to the lender, for clearing their outstanding loan.

Your home loan EMI is calculated based on three things: Enter your home loan required amount, choose an interest rate applicable by home loan provider and select the tenure you wish to repay loans. Once you enter these details your calculated EMI amount along with interest applicable will be displayed for your information.

The home loan EMI calculator helps you understand the regular EMIs applicable on your housing finance. These calculators help you cut down the hassles of usually tedious and time consuming manual calculation of EMI applicable on your home loan. It is simplified and loaded with all the essential data, including amortization details and the ability to alter components like interest rates and tenure to try other types of permutation and combinations. This will help you make the conditions of repayment feasible as per your requirements. The most important benefit is you can plan your budget well in advance and keep aside the monthly EMI amount towards your housing loan.

While using home loan EMI calculator individual should consider charges applicable like processing fees of the loan, pre-closure charges, type of interest rates (fixed or floating basis), etc. Each EMI of the loan amount pays a part of the principal that you owe to the bank along with the decided interest rate on it. Banks and financial firms, have a certain mathematical formula to calculate the EMI based on loan amount, interest applicable, your income sources and other important details.

For a given loan amount, tenure and interest rate, the EMI calculated and the amortization schedule offered by banks and private financial firms will be similar. The pattern of reduction of principal amount through payment of each EMI will follow a similar trend across all financial institutions. Also, individual should note that the initial EMIs contribute more towards payment of interest due as compared to the principal amount. As the tenure progresses, subsequent EMIs will clear off the principal amount. Thus, by paying each EMI to bank you get an inch closer towards clearing off the debt and owning your dream home forever.

Visit Here: https://www.hdfc.com/emi-calculator

Loan-requests-for-better-home-loan-rates

The first and the most important strategy to negotiate your interest rate on home loans is to constantly update yourself with what different lenders are offering.

At present, customers have a plethora of options available from banks and financial institutions with regards to home loans and their interest rates. Today, banks and financial institutions also offer flexible interest rates for different income categories. Here's a few tips to negotiate your interest rates on home loans:

Information:

The first and the most important strategy to negotiate your interest rate on home loans is to constantly update yourself with what different lenders are offering. One should check both the fixed and variable home loan rate and then compare the two against each other. Figuring out the loan eligibility on the basis of information collected from agents is another crucial pre-requisite before deciding to opt for a home loan. Such discussions also help consumers in deciding relevant issues such as type of interest rate tenure, other charges etc. Exercises like this will also protect the borrower from getting misled by lenders who often use various jargons to lure customers.

Having all the information you require can also be useful for someone who has already availed a home loan. It will help him/her learn if they are paying an extra amount and also if another bank or financial institution could provide a better rate. The facts on the rates offered by different banks and financial institutions will help the borrower discuss the situation with more authority and this may further lead to the lender agreeing to a better rate for the existing home loan. This helps as from a lender's point of view it is easier to retain an existing customer than to get a new one.

One could also opt for a balance transfer in case another bank or financial institution is providing a better rate, but such a decision should be taken only after weighing all the pros and cons. The borrower should get a clarification from the new prospective lender on all start-up fees involved with refinancing the existing home loan besides asking the existing lender to explain the costs involved in paying out the loan. The transfer process should only be initiated after there is a clear indication that the move will save money.

Credit score:

In today's time, a good credit score helps the borrower negotiate his/her loan and interest rate, processing fees, pre-payment penalty and all the other charges involved while purchasing a property. Most banks and financial institutions believe that customers with a sound credit rating are less likely to default on the loan amount. Borrowers with salary accounts or credit cards can also avail further discounts on processing fees and prepayment penalties from banks.

In case one has a poor credit score certain steps should be undertaken to help set things right. One could take start making payments, whenever due without delaying them any further, by not utilizing the maximum limit on your credit card , pay off any debt etc.

Documentation:

There is no substitute to effective documentation while availing home loans. This gives banks the confidence about the borrower's credibility and repayment capacities thus helping in securing loans. The document filing is also an important step in this process as it is highly unlikely for a bank/lender to offer a best possible quote until the documents are submitted. One must be completely honest about existing debts, credit cards, and repayment history to all lenders to give a clear idea about their existing financial position. This will also help individuals to negotiate home loans better by enhancing their credibility as banks will also check the same with the Credit Bureau about the credit worthiness of the individual.

Another important point to keep in mind before availing a home loan is approaching prospective lenders only after the property is finalized and disbursement is required in the next few days. Most lenders are interested only in disbursements and reserve their best rates only for immediate disbursement cases.

Time your loan:

Borrowers should look at timing their loans towards the end of the month or quarter for better rates. Banks and financial institutions have pre-defined sales targets for its staff towards the end of the month/quarter and may offer competitive rates to complete their targets.

One should also look at timing their loans towards the festive season as lenders tend provide incentives in terms of lower interest rates and processing fees during this period to encourage sales.

Larger customer:

Bundling loan requests with friends & relatives to offer a larger business opportunity to banks and financial institutions is another tactic one can use for negotiating home loan rates. This is possible as banks and financial institutions would be saving on their legal and technical costs relating to property title, valuations, etc.

Conclusion:

Getting a home loan is becoming a hassle free/simple procedure with financial institutions increasingly focusing on shortening the entire process. Lenders are giving applicants an option to fill the application form online besides providing on-ground assistance of home loan advisors to assist them. With the increasing competition, financial institutions may go all out to offer home loans at competitive rates and make the entire process simple, but customers should sign up for home loan emi calculator only after ensuring that they are getting the best deal from their financial institution.

Source: http://checkthis.com/emiforhomeloan

Is Your Financial Life On Track?

While we all have different goals in life, there’s one that we all share—the goal to be financially sound. All our lives, whatever we do, we do it with an aim of earning better. It becomes quite frustrating if, after that entire struggle at work and burning the midnight oil, things don’t go the way we want them to. The ultimate reason for working that hard is not merely a raise or a promotion; we do it for something more—to be financially sound. This keeps us going.

Some of the basic parameters to judge anyone financially are—their income, their spending habits, their savings and investments. If you’ve got all or most of these right, your finances are more or less on the right track.

Even if you’re not facing any financial troubles at the present, that doesn’t ensure a safe future ahead. Here are some pointers to check whether you’re doing enough to keep your financial life on track:

What does your bank balance say?

Your bank balance at the end of every month acts as a great indicator to show you how well you’ve done. Did you exhaust it all by spending on a sale or on some expensive gadget that you don’t even use? According to most financial experts, you must save at least 20 per cent of your monthly salary. If you’re unable to do that, you’re doing something wrong.

Are your resources growing?

Your resources include everything you own—your bank balance, property, cars, gold. To evaluate your financial standing, you need to evaluate the net worth of all your resources and see if there’s a positive growth. It doesn’t mean that your net worth needs to grow exponentially, but there just needs to be a positive growth curve for it. Continuous growth in your resources is a great indicator of a good financial record.

How many loans do you need to repay?

You might be earning well, but if you have a lot of loans to pay off, you need to plan your money better. First of all, you must not borrow so much. In the worst case, even if you need to borrow, you must balance it well. If you’re in need of a house, it makes sense to opt for a Home Loan. But to take a Personal Loan just to fund a dream vacation simultaneously might not be a great option. If you’re heavily dependent on loan money, you have a lot to work on!

Do you have insurance?

‘Why do I need insurance to check my financial stability?’— that’s probably what you’re thinking right now. Consider this scenario—you just saw the house of your dreams and arranged for a huge down payment for a Home Loan. But suddenly there’s a medical emergency and you have no other option but to use that down payment money to take care of the emergency. 

As you rise up to the occasion and look into the emergency as a priority, your dream to occupy that house gets postponed. Heart breaking, isn’t it? Well, you could’ve easily avoided this situation if you had taken a Health Insurance cover, right? You could’ve used the insurance money for the emergency, while your down-payment money would’ve remained untouched. Now you know why staying protected from potential external damages are essential for your financial security, don’t you?

[Source: https://blog.bankbazaar.com/is-your-financial-life-on-track/]

How to Get Pre-Approved For a Home Loan

Have you been thinking about buying a home? Which in turn has you thinking about applying for a home loan? Some of you may not know that both Marc and I used to work in the mortgage home loan industry. This experience comes in extremely handy for our real estate business because we know the back end finance component.

Marc owned a mortgage group joint venture and I worked as a loan officer for over 5 years. We have helped home owners obtain the financing they needed to buy their home. Since then lots of things have changed in the mortgage industry, but the basics remain the same.

We have built relationships with the best of the best on the mortgage loan side, you can request our complimentary referrals by sending us an email HERE and write in the subject line, help connect me with a mortgage lender.

When it comes to buying a home you have two options:

1) Pay Cash

2) Financing with a Mortgage Loan

Regardless of your financial scenario we take a consulting approach which helps us better understand your needs and match you with the appropriate vehicle to get you to your destination.

Here are some quick tips to get you prepared to speak with your mortgage loan officer:

5 Things You Need To Get an Emi for Home Loan

Proof of Income

Proof of Assets

Good Credit

Employment Verification

Documentation (Driver's license, ID, Social Security #)

Those are just the basics and speaking to a professional who specializes in mortgage loans will help go into more detail of the specific documents needed. Being pre-approved before you start house hunting is most important, when you find the home of your dreams and want to buy it a pre-approval letter is sent with your purchase offer on the home. This gives the seller assurance that you are the real deal!

Stay tuned for more of our Commitment of Service Series and don't forget you can contact us anytime for help with your San Diego real estate needs!

[Source: http://teamschuco.blogspot.in/2016/01/how-to-get-pre-approved-for-home-loan.html]

EMI for Home Loan - What Is EMI and How Is It Computed?

EMI is an oft repeated term that is associated with any loan taken. Let us understand how EMI works and what are the different aspects associated with EMI. The EMI facility helps the borrower plan his budget. The EMI is calculated taking into account the loan amount, the time frame for repaying the loan and the interest rate on the borrowed sum.

An Equated Monthly Instalment (EMI) is usually a fixed amount of money that you need to pay your bank or lender every month as repayment of a loan taken, until your loan is totally repaid. It is essentially made up of two parts, the principal amount and the interest on the principal amount, divided across each month of the loan tenure. The EMI is always paid to the bank or lender on a fixed date each month. This could be done though post-dated cheques issued in favour of the lender or by providing auto debit instructions to your bank for the same.

Here’s the formula to calculate an EMI:

Now, you might assume that the equal parts of the principal and interest are repaid to the financial institution every month. However, this not the case. During the initial years of repayment, the interest component repaid is higher while in later years, the principal component is higher. So, you cannot assume that you will have repaid half of the loan amount once half of the loan tenure is over. A more likely scenario we that you’ve reduced the total interest component that was due by a considerable amount while the principal amount remains to be paid.

Here is a simple example that explains how the repayment of your EMI reduces your loan amount during the repayment period leading up to the end of the loan tenure.

Here the loan amount is Rs. 1, 00,000, which is lent at an interest rate of 12% with a loan tenure of 12 months.

The monthly EMI is calculated at an annualized rate of 12% and amounts to Rs.8,885 per month with the total interest component amounting to Rs.6,619.

You will notice that the interest repaid decreases with each passing month while the principal repaid increases at the same time. This means that with a larger loan amount of say Rs.5 lakh and a longer tenure of 20 years, the interest component will form a greater portion of the EMI. This interest portion will reduce leading up to the loan tenure, while the reverse is true for the principal component.

Will the EMI change during the loan tenure?

There are three reasons why your EMI might change during the tenure of your loan.

§  Interest rate on your loan changes – If you have opted for a floating interest rate, the interest rate on your loan will change whenever the floating rate is reset by the lender. This, in turn, will result in a change in your EMIs. However, note that you can instruct your lender to not to change the EMI and instead request for change in the tenure of the loan.

§  You prepay the loan – In case you prepay the loan amount during the tenure of the loan, your EMI will change. This is because the principal of the loan will have gone down and the interest due will be based on this new principal. Here too, you can ask your bank to change your tenure instead of the EMI. This will help you repay the loan quickly.

§  You opt for progressive EMIs – Some lenders offer the option of repaying the loan through staggered EMIs. Here, you pay a fixed EMI for a specific number of years initially and after that term, you start paying larger EMIs. This is generally chosen by young earners who have just started their career and cannot afford to pay large EMIs initially and hope to pay larger EMIs as they grow in their profession.

At the end of the day, loans are liabilities and it is best to close them as quickly as possible, unless you are getting other benefits such as tax exemptions. It is best not to reduce your emi for home loan even if interest rates fall.

Source: https://blog.bankbazaar.com/what-is-emi-and-how-is-it-computed/

EMI for Home Loan - What Is EMI and How Is It Computed?

EMI is an oft repeated term that is associated with any loan taken. Let us understand how EMI works and what are the different aspects associated with EMI. The EMI facility helps the borrower plan his budget. The EMI is calculated taking into account the loan amount, the time frame for repaying the loan and the interest rate on the borrowed sum.

An Equated Monthly Instalment (EMI) is usually a fixed amount of money that you need to pay your bank or lender every month as repayment of a loan taken, until your loan is totally repaid. It is essentially made up of two parts, the principal amount and the interest on the principal amount, divided across each month of the loan tenure. The EMI is always paid to the bank or lender on a fixed date each month. This could be done though post-dated cheques issued in favour of the lender or by providing auto debit instructions to your bank for the same.

Here’s the formula to calculate an EMI:

Now, you might assume that the equal parts of the principal and interest are repaid to the financial institution every month. However, this not the case. During the initial years of repayment, the interest component repaid is higher while in later years, the principal component is higher. So, you cannot assume that you will have repaid half of the loan amount once half of the loan tenure is over. A more likely scenario we that you’ve reduced the total interest component that was due by a considerable amount while the principal amount remains to be paid.

Here is a simple example that explains how the repayment of your EMI reduces your loan amount during the repayment period leading up to the end of the loan tenure.

Here the loan amount is Rs. 1, 00,000, which is lent at an interest rate of 12% with a loan tenure of 12 months.

The monthly EMI is calculated at an annualized rate of 12% and amounts to Rs.8,885 per month with the total interest component amounting to Rs.6,619.

You will notice that the interest repaid decreases with each passing month while the principal repaid increases at the same time. This means that with a larger loan amount of say Rs.5 lakh and a longer tenure of 20 years, the interest component will form a greater portion of the EMI. This interest portion will reduce leading up to the loan tenure, while the reverse is true for the principal component.

Will the EMI change during the loan tenure?

There are three reasons why your EMI might change during the tenure of your loan.

§  Interest rate on your loan changes – If you have opted for a floating interest rate, the interest rate on your loan will change whenever the floating rate is reset by the lender. This, in turn, will result in a change in your EMIs. However, note that you can instruct your lender to not to change the EMI and instead request for change in the tenure of the loan.

§  You prepay the loan – In case you prepay the loan amount during the tenure of the loan, your EMI will change. This is because the principal of the loan will have gone down and the interest due will be based on this new principal. Here too, you can ask your bank to change your tenure instead of the EMI. This will help you repay the loan quickly.

§  You opt for progressive EMIs – Some lenders offer the option of repaying the loan through staggered EMIs. Here, you pay a fixed EMI for a specific number of years initially and after that term, you start paying larger EMIs. This is generally chosen by young earners who have just started their career and cannot afford to pay large EMIs initially and hope to pay larger EMIs as they grow in their profession.

At the end of the day, loans are liabilities and it is best to close them as quickly as possible, unless you are getting other benefits such as tax exemptions. It is best not to reduce your emi for home loan even if interest rates fall.

Source: https://blog.bankbazaar.com/what-is-emi-and-how-is-it-computed/