How to avail home loan with easy monthly installment options?

Home loan is a secured form of loan that is offered against the security of house/property which is funded by the bank, the property could be a personal property or a commercial one. It’s a loan taken by borrower from the bank issued against the property / security intended to be bought by the borrower a conditional ownership over the property. These are attractive and popular means of buying a dream house for most people.

Every day millions of people apply for home loans with leading government or private banks and finance companies in India. Today, it has become the prime source of finance aid to people who work hard and strive to build their home but struggle due to high inflation costs, lower salary or other responsibilities towards the family.

While taking a loan the primary concern would be the interest rate applicable and EMI for home loan. These are the prime source for deciding your loan affordability. Some private sector banks or finance companies are offering loans at an interest rate as low as 9 to 10% and come under fixed or floating rate basis concept. Under fixed rate loan the ROI remains constant throughout the loan period, while in floating rate loans the ROI is linked to market conditions and may change periodically. They could be linked to the base rate, inflation, or other parameters, each bank selects its own methodology to fix this base rate. These rates have to be declared by the bank each quarter. Some leading private sector banks offer loans in the form of adjustable rate of interest loan, Trufixed loan (2 to 3 year fixed rate variant) or Trufixed loan (10-Year Fixed Rate Variant).

Each bank has its own pattern of calculating the Property loan emi calculator and it vary based on the customer’s credit profile.  The interest rates depend on various factors like availability of money in the market (liquidity), inflation and monetary policies. They are categorized in two ways fixed rate or a floating rate. For fixed rate loans, the ROI remains constant throughout the loan period, while in floating rate loans, the ROI is linked to market activities. Each bank selects its own methodology to fix this base rate. These rates have to be declared by the bank each quarter.

In India, generally banks or finance companies offer lenders loan amount upto maximum 80-85% (below 20lakh) of the agreement value of the house. Incase of home loan for resale flats, most lenders get the property valued independently and provide housing loan based on their value than the cost mentioned in the purchase agreement.

You can repay the loan through EMIs. Property loan emi calculator could be set for maximum tenure of around 20 to 25 years. Some of the banks provide housing loans even for a tenure extending upto 25-30 years. The tenure is restricted to the borrower’s and credit history.

Taking loan means a big decision of your life. A little bit of mis-calculation can burn a big hole in your pocket. The decision has to be carefully scrutinized and move ahead. To ease your mental burden banks and finance companies have come up with easy home loan interest calculation methods online.  Emi for home loan could be calculated easily with no stress on your brain for tedious calculation and waste your valuable time.

There is a loan amortization table that will further break down your monthly EMI into the principal and interest components and will give you an idea of exactly how much interest you are paying over the entire period of the loan. Property loan emi calculator help you estimate the potential savings on your loan amount making it affordable and easier on your pockets in the near future.

How to Calculate Your Mortgage or Home Loan Payments?

Everyone dreams to have their own house. A house will probably be your largest purchase. To make this dream come true, you work hard; you earn all your life to buy a house. You take a mortgage loan and repay it throughout your life. Every month, you just pay the amount given in your loan statements. When you pay your monthly installments, have you ever wondered how that figure has arrived? Have you ever thought of trying to understand the calculation of your mortgage payments? If not, now is the time.

You are spending your hard-earned money in paying for your mortgage loan amount. How can you be sure that the mortgage company is charging you the fair amount? In the past few years, there has been a lot of financial crisis, especially in the housing sector. But people have learned from it. They are now more in control of their finances. They wish to know where and how their money is going. Thus, everyone wants to know the calculations for mortgage payments on your home.

Calculating home loan payments is not a difficult task. Many home loan calculators are available on the internet. All you need to do is provide the basic details that are: the principal amount of loan, the interest rate, and you loan tenure. You can easily calculate your monthly payment by putting in just the above details. The Property loan emi calculator available on our site will help you to calculate your mortgage payment.

In case you wish to apply for a fresh mortgage, you can put in many combinations of the above three ingredients to get various payment options. For example, if your loan principal is $100,000, interest is 7% and term is 30 years, your EMI will be $665.30. But if you reduce the term to 20 years, the EMI will be $775.30. If you believe that you can pay an extra $90 every month, you can easily keep the tenure as 20 years. When you know how to calculate the payments, you can see what options will suit you the most. This way you can negotiate with the lender at the time of deciding the interest and tenure and the repayment schedule.

However, there are more factors that go into mortgage payments. Even if you have calculated the loan EMIs, you might find your actual monthly payments to be more than you expected. That's generally because of taxes and insurance. So after you calculate your mortgage payments, don't forget to add the homeowner's insurance, taxes and private Property loan emi calculator to get the actual mortgage payments.

There are many benefits in learning to calculate your mortgage payments. Some of them are as follows:

• You will be in control of your finances.

• You will know how much of your payments are towards principal and how much towards interest.

• You will have the knowledge as to what accounts for your monthly mortgage bill.

• You can catch the occasional errors made during billing by the mortgage companies.

• You will know whether or not you have a good deal on your mortgage.

• You can reduce your mortgage cost by refinancing your mortgage if your current mortgage is charging very high.

Article Source: http://EzineArticles.com/5416241

Calculating Loan Installments with an Property loan emi calculator

Whether you apply for a car loan, home loan or a personal loan, you have to pay an Equated Monthly Installment. To calculate the monthly payments accurately, people use an EMI calculator. Soon after you decide to apply for a loan, you need to research on available types of loans in the market. Today, financial institutions and banks in India offer all different kinds of loans to fulfill different property buying needs of the residents. As you avail advance cash from the banks to buy your dream house or car, it is clear that you have to pay the borrowed money back. Further, you need to pay some interest along with the principal loan amount to the banks. The loan is to be paid back in equal monthly installments. An EMI calculator makes it easy for the loan applicants to calculate the monthly installments and schedule the payments.

Equated Monthly property loan emi calculator, a monthly amount is to be paid by the loan borrower to the financial institution or the bank from where the loan is taken. EMI is the combination of principal amount of the loan and the interest and is paid until the full loan amount is cleared. The interest and total principal amount is divided by tenure and this sum is generally paid monthly. Normally, the interest and principal amount doesn't change but its proportion might change as times. With every consecutive payment, the loan borrower pays more towards principal amount and less as interest.

Using property loan emi calculator

With an online EMI calculator, the calculations have been further simplified for the loan borrowers. Every bank or the financial institution offers top quality EMI calculators to assist the borrowers to calculate equal monthly installments. There are many benefits of using an online EMI tool.

• With graphical charts and easy to understand graphs, the online EMI calculators assists the loan borrowers to easily calculate the monthly installments.

• Making accurate calculations is possible with a sophisticated online calculator.

• An online calculator assists you to calculate car loan, home loan or a personal loan instantly.

• It is easy to determine monthly payments against interest and principal amount on the loans. With this, you can judge how suitable and affordable a loan is for you.

• Use the calculators to avail quick loan quotes as per the EMI

Calculating the equated monthly installment is simple through an EMI calculator. Simply enter details like rate of interest, period of loan and the principal amount to make instant, accurate calculations. Along with the basic monthly installments, you can calculate the total payable interest and total amount along with interest. The EMI will differ as per fixed and variable rate of interest. The Equated Monthly Installment that you attain gives an idea of personal financial commitments for the future. For example, you can find out whether you can afford personal financial commitments during the period of the loan. With this, you can plan personal finances better and take efforts to fulfill life's requirements.

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Determine Your Ability to Pay a Loan with EMI to Income Ratio

Everyone is capable of forming a budget, of how much to should spend on home, car, retirement funds, insurances, daily expenses, and so on, and how much they should save every month. Budgeting is crucial for sustaining yourself in the long run, especially if you have something like a home loan to factor in.

You may have created your own budget and you may good at it, but did you ever wonder what would be the ideal budget for you? The 50/30/20 rule coined by Harvard bankruptcy expert Elizabeth Warren and her daughter,

Calculate Your After-Tax Income

Making a budget is all about splitting and allocating your monthly income among other commitments and expenses. Before you do anything, you need to know how much money you are really dealing with. Your monthly salary can be misleading as there will be a tax cut. Therefore, you'll need to calculate through Emi Calculator Housing Loan how much money you will have in hand to play around with after government taxes are deducted. Once that is taken care of, you will have to add back any other deductions that were made on your monthly income like health care, retirement plan charges and so on.

Limit Your Needs to 50 Percent

Needs are different from wants. You've heard this so many times and you've even said this yourself. Now it's time to look at all of your monthly expenses and pick out which ones were made for your needs. These will include cost of housing and utilities, groceries, health and car insurances. The idea here is to sum them all up, and make sure that they do not cost you more than 50 percent of your after-tax income.

If you have problems in differentiating which expense is a need and which is a want, then use this rule: If the payment has a major effect on your quality of life such as electricity or medicine, then it is a need. If not paying for something would cause minor inconveniences to you, like the cable bill, then that's a want.

Limit Your Wants to 30 Percent

Now you know what wants are. These wants are important for living a happy life and for positively motivating yourself to earn more. According to the 50/30/20 rule, 30 percent of your after-tax income should be spent on all of your desires.

Spend 20 Percent on Savings and Debt Repayments

The remaining 20 percent should be spent on repaying debts that you have or save it for your retirement or emergency account. When you are placing debts in this category such are credit card payment, categorize the minimum payment of your credit card payment as a need.

[Source: http://ezinearticles.com/?Determine-Your-Ability-to-Pay-a-Loan-With-EMI-to-Income-Ratio&id=8519504]

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]

Housing Loan Interest Rate Advice for Loan Applicants

Upon deciding on applying for a mortgage loan it is important that you be aware of the housing loan interest rate that you will be required to pay during the term of the loan. There are times when buyers get too excited about the idea of purchasing their own home that they tend to overlook the interest rate incorporated into the loan.

They only begin to notice this after a few years of paying their mortgage, and by this time the rates may be too high, especially if the loan has a variable interest rate. If you are faced with such a situation it is best that you call your mortgage provider and have the contract explained to you in detail. If you feel that it is too high, your loan manager may present you with other options such as refinancing in order to be able to save on your mortgage payments.

There are many other interest rate packages that may be offered by banks, however, these four are the most popular among property shoppers.

A fixed housing loan interest rate through Home Loan Emi Calculator is another popular choice by those who are shopping for mortgage loans because it is not affected by economic changes in the world market. Those who choose this mortgage rate package will continue to pay a fixed rate of interest regardless of how the world market is doing for the duration of the mortgage loan.

The principles of a variable housing loan rates for interest are a little harder to understand because it varies from bank to bank. You may find banks that offer lower variable interest rates than others, while some charge higher than usual. This is because variable rates of interest depend on a lot of factors, including your credit background, your ability to pay, and your standing as a Singapore citizen. It is important that you thoroughly understand the computation before you agree to the terms so as to avoid paying more than what you can afford.

To get a mortgage rate that is most suitable for your financial situation, make sure that you thoroughly research about the current mortgage rates in the market before you start doing your mortgage loan shopping. Patience and determination are also very important because running in and out of banks to meet with housing loan managers can be a tiring and time consuming task. Everything becomes worthwhile however when you are able to land a housing loan rate package that is right for you.

[Source: http://ezinearticles.com/?Housing-Loan-Interest-Rate-Advice-for-Loan-Applicants&id=6713671]

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]

emi calculator housing loan

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 emi calculator housing loan 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.

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home loan emi calculator

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://www.articles.howto-tips.com/HowTo-Article-Directory/loan-requests-better-home-loan-rates