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.

Home Loan

Taking a loan can win you lender’s trust

Most of us try to be careful about paying dues on time, but the strike rate is rarely 100%. Some late payments have a temporary effect, maybe a one-time fine. But there are others that have short-term as well as long-term repercussions. For example, on a home loan, if you are late in paying the installment, you have to pay a penalty and it affects your credit score in the long run.

Here are a few ways you can ensure that your score remains on the higher side of the scale.

Pay on time

If you are a salaried employee who gets her pay once in about 30 days, then it is easier to schedule loan payments such as for a Housing Loan and an auto loan. But what about those who are away for long periods, say, on a merchant ship? Or those who have seasonal employment?

Know the details

Reading the details will mean you know about grace periods, penalty rates, interest rate calculation and more. Most of this is available in the loan documents and the lender’s website. You can also call the customer service center for help.

Use credit cards wisely

This is probably one of the most common loans that people take. But it is also the least understood.

Many individuals, who have had bad experiences with this product, shun it absolutely. If you had issues with paying your credit card dues in the past, and are wary of using it again, it won’t help your credit score.

Your basket of loans

Your credit profile also depends on the types of loans, i.e., your mix of secured and unsecured loans. Secured loans are those that have collateral attached, such as a home or a car loan. If you default, the lender can take away the ‘asset’. Unsecured loans, such as credit card or personal loan, are riskier for the lender because they don’t have attached collateral.

[Source: http://www.livemint.com/Money/68QAwMldEIeKmOUwye4nhO/Taking-a-loan-can-win-you-lenders-trust.html]

The Problem With Home Loans

The latest in Reserve Bank of India’s measures to protect customers with home loans is a proposal to change the way banks determine their `base rate’ – the benchmark for all floating rate loans. The need for a re-look arose because customers have been complaining of a raw deal in pricing.

In recent years RBI has taken a number of measures to provide a better deal for home loan borrowers. The introduction of base rate ensured that banks do not reduce rates only for new customers by playing with the interest spread. In the past banks could play with the spread as they would lend below the prime lending rate (their earlier benchmark) for new customers while old customers continued to pay over the PLR.  This was not possible with the `base rate’ which was also the floor rate for pricing. In June 2012 RBI forbade banks from imposing a penalty on pre-payment of home loans irrespective of whether the loans were being refinanced or repaid. This made it possible for disgruntled borrowers to move away to rivals if their loans were not re-priced when interest rates were falling.

But there are a number of areas RBI could look into as part of its consumer protection initiative. Here are a few.

Compulsory insurance: Banks have an interest in the property mortgaged with them and they need to ensure that it is protected against any eventuality. At the same time banks also gain by selling insurance policies.  But what needs to be insured is the cost of construction and not the cost of land. 

A 1000 square foot house may cost Rs 2 crore in Mumbai but the cost of construction would be around Rs 20 lakh. So there is no need of buying property insurance for the whole loan amount. Yet many banks insist that the buyer pay 15-year insurance premium upfront based on the market value of the property rather than the construction cost. Also in cities like Mumbai, the property is owned by the cooperative society which is required to insure the property. It is therefore not clear whether the bank’s insurance policy will pay a claim when the housing society is also making a claim for the property damage.

Non-intimation of interest rate changes:  Most home loan borrowers focus on the interest rate at the time of availing home loans. But floating rates are dynamic and vary from time to time. The borrower is not aware of this because while rates vary, the equated monthly installment or EMI does not. Banks merely change the tenure of the loan. So in a rising interest rate regime it is not unusual for borrowers to find that their principal loan amount is unchanged even after years of repayment.  Very rarely does a bank communicate to the borrower changes in interest rates.

Notice of intimation of mortgage: In Maharashtra the government has made it compulsory for all mortgage interests to be registered. This is aimed at preventing fraudulent sale of the property even as a loan is outstanding.  While the objective is laudable, the trouble is with the process. Although the law actually protects the bank’s interest lenders have shifted the onus on the borrower.  Rather than use their institutional clout to facilitate smooth registration, borrowers are forced to approach agents and spend a few thousands to complete this process.

No refinancing of existing loans:  Lenders often poach from home loan borrowers of other institutions. But when it comes to their existing customer they do not offer them the benefit of new rates.  If there is a special scheme running in the bank, existing borrowers are not informed of it. Also banks charge customers a processing fee even when their loan is refinanced within by their own bank but under a different scheme.

Complex pricing: Some banks have resorted to complicating the pricing of home loans introducing interest free years in middle of the tenure of the loan. Innovation in financial products are good only as long as they do not obscure pricing. Borrowers need to have the opportunity to compare the cost of one home loan against another.  One way to make the pricing transparent is to disclose the cost in the form of annualised yield to the lender based on prevailing rates.

Source: http://blogs.timesofindia.indiatimes.com/small-change/the-problem-with-home-loans/

Home Loans for Non-Resident Indians

Owning a personal heaven (read home!) of choice is a dream of every human. It is more a necessity than a luxury to have a beautiful and well-furnished place you can call home. Home loans provided by various Banks and Housing Finance Companies (HFC's), providing finance to the citizens have come the rescue of those willing to convert this dream into reality. It's not just the citizens who are availing these, but even NRIs, whose needs are being looked into, as well. Regarding home loans for NRIs, various queries like "what exactly are they, what do they do, who can avail them" may rise in the minds of many.

How the government defines NRIs:

NRI's are Non-Resident Indians, who are the citizens of our country, and who hold a valid document like, say the Indian passport. They stay abroad for employment or for carrying out a business. Every bank follows the RBI guidelines to provide a home loan to the NRI's who are recognized under Foreign Exchange Regulatory Act, 1973.

Specifications for NRIs intending for a home loan:

Home loans for NRI's are available for construction of new houses or flats, purchase of old houses or flats, flat addition, alteration of existing houses, renovation, repairs etc. NRI's should fulfill certain eligibility criteria in order to get the home loans through Emi Calculator Housing Loan. The documents required for resident Indians and NRI's vary in few respects. These include the age of the applicant which should be at least 21, should be a graduate, the income they get which should be a minimum of 2000$ per month. In addition, the numbers of dependents are also considered.

Other important considerations:

• An NRI can get a maximum of 85% of the cost of property.

• Payment options are critical for providing the loan. It should be only through the Equated Monthly Installments (EMI), which also include the interest and principal amount calculated on monthly rests.

• Payment of EMI is by issuing post-dated checks from his/ her Non Resident External (NRE) or Non Resident Ordinary (NRO) or Non Resident (Special) Rupee Accounts (NRSR) in India.

• They are also provided with various facilities like Step up Repayment, Flexible Loan Installments Plan, Trache Based EMI, and Accelerated Repayment Schemes etc., for the repayment of the loan.

[Source: http://ezinearticles.com/?Home-Loans-for-Non-Resident-Indians&id=6132263]

Knowing What an Investment Property Loan Is

Do not get confused, the term investment property loan simply means a loan for investment of properties. These properties to be invested on are deemed to be profitable in the future that is why people loan to buy them. Presently, the real estate industry has become a lucrative business. A lot of realtors have testified on how they have come from rags to riches after getting into the real estate business. Depending on your talent and the circumstances, loaning to invest on a property may provide you with a good chance of building equity while nurturing the potential of capital gains as the value of the property appreciates over time. If you have the ability, it is definitely not a bad endeavor to try.

An investment property loan can be generally classified into two: residential and commercial. A residential loan is associated with investing residential properties like apartments, condos, buildings (with at least 5 units), stores, or warehouses. They are usually bought for expected future appreciation and rental income. On the other hand, a commercial loan is the one associated with investing on business and commercial areas. They are often more costly since bigger income is also expected to come from them.

Individuals are not the only ones loaning to invest on properties though. Quite a number of real estate investors in the U.S. make use of investment property loans in acquiring real estates too. There are two basic advantages on this. They can benefit from capital growth and tax deductions. Another important benefit comes from "negative gearing".

In essence, the word "gearing" means borrowing for investment. A negatively geared investment means it is a property purchased using a Property Loan Emi Calculator where the expected income (after all the expense deductions) from the investment is less than the annual payable interest. This gives the investor a substantial tax benefit since they may deduct the cost of owning an investment property from their income which is taxable.

An investment property loan can come in different shapes and sizes depending on the requirements of the investors. They may be offered as interim, long-term or short-term loans. If you are interested in engaging into this kind of investment, you should make sure that you are knowledgeable of the terms of the loan. Make sure that you understand the interest rate and the time period of it. You must also keep track of the schedule. You want extra profit and not bigger credit.

There are quite a number of reputable investment property loans in the U.S. Most of them do not provide any limit on the number of properties you could own. They also offer adjustable mortgage rates and they have low down payment options. This is a great help because you can simply use the spare money to repair or renovate the property for future profitable use like reselling it or having it rented. A lot of loan providers also offer application online meaning you will not have to waste time setting an appointment with them or going to their office. Their online service allows quick and easy processing of your application for loan.

[Source: http://ezinearticles.com/?Knowing-What-an-Investment-Property-Loan-Is&id=3284349]

How to Calculate the Proceeds of Your Home Sale

Selling a home takes a lot of hard work on the part of the home sellers especially if they are doing it on their own. A major part of the process involves a lot of calculating numbers from setting the home price, taxes and legal fees to the amount of profit the seller is going to get. But of course, even before the sale is completed, every seller would want to know the net proceeds he or she will get.

The money you will have when by the closing of the home sale transaction will be the total sale price of the property. However, you won't be able to keep the entire amount as you may need to pay for debts, liens and other charges against the property. So, your net proceeds will actually be the total sale price minus the charges which mostly make up the closing costs.

Below are several important fees that are normally paid out of the sale proceeds. Knowing these charges as well as setting a fair market value for your home will help you accurately calculate your potential net profit.

Attorney's fees. Every home seller will need the help of a real estate lawyer. The attorney plays a vital role in the financial transaction not only as an advisor but also as an escrow agent when you need a third party to keep the deposit or down payment. The fee is either a flat fee at a minimum of about $350 or by the hour.

Disbursements. These refer to expenses incurred by a lawyer on behalf of the seller such as the mortgage discharge fee paid to land titles, title search fees, couriers and other charges.

Property taxes. These taxes are paid every year. However, this can be negotiated as to who will should the payment.

Transfer taxes. This is a tax that may be implemented by states, counties or municipalities on transferring real estate property within the jurisdiction. Transfer taxes may range from a small of .01% to 2.2%. It is best that before selling your home, you check your area's rates from the Recorder of Deeds, a title company or a realtor.

Mortgage. The balance of your mortgage will be paid out of the sale proceeds. Unless your mortgage is in good standing, you will also have to pay for mortgage penalty and a discharge fee paid to the lender. All mortgage payments due on or before the possession date will have to be paid by the seller.

Home Loan India. If there's a home equity loan or line of credit secured on your home such as via collateral mortgage or caveat, it must be paid out of the sale proceeds. Also, payment for any home renovation loan will have to be taken out of the proceeds.

Home warranty. This guarantees the buyer that all mechanical and electrical appliances in the home are in good working condition on the day of closing up to the first year of ownership. A warranty costs at a minimum of $350.

[Source: http://ezinearticles.com/?How-To-Calculate-The-Proceeds-Of-Your-Home-Sale&id=1208280]