Things to know about the Interest Rates on House Loan

House loan interest rates are one of the most important aspects while opting for home loans.  It varies based on your principal loan amount, credit score, market scenarios and how good is your relationship with the lender. It is the crucial factor to decide the housing finance as well as the monthly installment of your home loan.

While quoting the house loan interest rates your income source, job stability, organization type, additional income source, credit score, age and number of dependents, property location and its value are taken into consideration.

Today, there are hundreds of players in the market and the competition is really getting intense in the mortgage markets. Therefore, banks and finance companies are catering loan with customized solutions and at lower interest rate deals. They come up with various attractive schemes to lure potential borrowers or retain the existing customers. One can compare the deals online, in terms of interest rates, processing fee, flexible repayment, tenure, etc. and then decide upon the bank or housing finance they would like to take the loan from.

Few things to know about the interest rates that might be useful to our housing loan process:

Compare

Comparing the products will help you go for better house loan interest rate deals. With good income source and credit score and at a younger age you're in a commendable position to negotiate with the lenders for interest rate deals. Even 0.5-1% reduction can help you save lakhs in the long run.

Types of Interest rates

Home loans interest rates are of three types fixed rates, floating rates, and partial fixed-floating interest rates. Fixed rates will help you get uniform monthly installment through the loan tenure, floating rates depend on market volatility and government policies. So, they are bound to give variable monthly installment. Under partial fixed-floating interest rates, the rate will remain constant for a couple of years to protect you from the tides of the market and thereafter the rate gets floating and changes to variable interest rates.

Better rates for Women

Most lenders provide often empower women with slightly low-interest rates. They know women are more responsible borrowers and therefore offer a concession of around 0.05% on the loan amount. This slight reduction can also help in substantial savings over the span of 25-30 years. If there is a women joint application (spouse) you can vouch for better house loaninterest rates deals and higher loan limit as well.

Tax Benefits

Under section 24 of the Income Tax Act, 1961 the interest on housing loan you pay in a given year can help you avail tax benefits for up to Rs 2, 00, 000 per year. If you apply jointly, both you and your co-applicant can avail the benefit. Thus, it’s like in a way doubling the saving from the interest paid.

Balance Transfer 

Just in case you feel that your existing loan provider is way too costly and not giving you any concession on the interest rates, you can transfer your loan to another lender through home loan refinance.  You can have a word with the new lender, do the necessary paperwork and you will enjoy ample amount of savings on your housing loan.

Comments

Post a Comment

Popular posts from this blog

Home loan Interest rates: An important factor to determine home loan amount…

Buying your dream home means spending hours to visit the property site, do background checks, documentation and finally vouch for the best home loan deal. There are leading private finance companies and banks who offer a range of housing finance products like housing loan for a new home or resale property, loan against property, home improvement/renovation loan, loan extension, etc. When you choose your home loan, it’s the interest rate which proves be the crux of the entire loan value. Different lenders offer different interest rates as per their rules and regulations and your credibility.   Since the market is quite competitive these days, you have to be extra careful because one minor mistake can lead to cause a big hole in your pockets. Besides, once it affects your overall credit rating it will be difficult for you to avail of any form of loan in the future as well. To get a better idea on the current home loan interest rates deals, you can peep into newspapers, visit ...
Read more

5 Silver Linings of Paying House Loan Interest.

Housing finance offers to make buying a home relatively easier, but this financial aid comes at a cost known as house loan interest . And though this cost might seem like a real pain in the neck with each equated monthly installment, there are a few interesting benefits & advantages of paying this cost. It may seem hard to believe but it’s true and to prove it, this article will highlight 5 silver linings of this expenses, that otherwise seems like a dark clouding looming over the end of every month! 1. House loan interest rates are at an all-time low. The first silver lining of the interest you pay on a housing loan today is the fact that you are paying interest at a rate that’s never been lower than what it is. For borrowers from 10 or 15 years ago, this rate can seem like a breeze to handle. In 2008, the prime lending rate was upwards of 12% per annum and today, there are some lenders who offer interest rates starting from as low as 8.35%. So if you’ve opted for a home...
Read more

How to choose your preferred interest rates on home loans?

A house is where your heart lies. Owning a home is one of the biggest financial goals for millions who wish to have their own abode someday. Till a few years back, buying a home was a daunting task wherein the property rates are already skyrocketing, no proper financial resource for funding and even if you find one you had to go through the tedious application and verification process. Traditional finances were way too costly in terms of extremely high-interest rates, stringent payment measure and no flexible for repayments. Borrowing from friends and relative has a chance of creating a rift in the relation. Thanks to the efforts taken by leading private finance companies and banks in India that fund your house with low home loan interest rates , and customized solution to turn your dream into reality.   Thanks to internet facilities you can compare quotes, apply for a home loan right from the cozy corners of your offices or rental houses. You don't have to visit any branches ...
Read more