Home Loan decoded
With the advent of Nuclear families in today’s scenario, the term ‘Home Loan’ is not unheard of. Home Loans are essentially loans given by the home loan providers for the purpose of acquiring a home or a residential property. As a matter of fact this facility provided by a finance institution, Mortgage Company or other financial institution is widely used not just on a need basis but mainly because of the various benefits and alternatives it entails.
Alternatives such as fixed or floating Home Loan interest rates and benefits such as low interest rates for women are as follows:
Home Loan Interest Rates
The major difference between a floating and fixed interest rate is that a fixed interest rate stays the same throughout your home loan tenure, unaffected by sudden market changes. However, a floating Home Loan interest rate could prove to be beneficial in the long run due to the fluctuating decrease in the original interest rate. Housing Loans itself are of various types, Home Purchase Loan (purchase of a pre-existing home), home construction loan (to build it as per your desires) and many more.
Low interest home loans
This is probably what most people have in mind when they think about finding the cheapest home loan. A low interest rate makes a massive difference to the overall expense of a home loan.
How can a loan with low interest rates save you money?
It’s important to look beyond the face value rate when considering a loan. Most Housing Loans have ongoing fees and discharge fees associated with them that can cost thousands. It’s wise to compare home loans by looking at all the associated fees and rates together.
Some loans may have high ongoing fees but offer discounted interest rates and processing fee waivers which could be more beneficial with an overall perspective. However, with the course of time, if you happen to come across another financial institution offering you a lower interest rate you could also apply for a Home Loan Balance Transfer.
The company that had originally extended the loan to you gets the unpaid amount and you have to, in turn, now pay your EMIs at the new rate to the home loan provider that has taken up the loan. In case of Home Renovation Loans, opting for a Top-up Home Loan will get you a much lower interest rate than a personal loan.
The interest rate will be 1%-2% higher than the home loan interest rate, which is still better than the personal loan interest rates.