Skip to main content

Home Loan Analysis

 
There are several factors to consider before you settle on a lender while buying a house.
You have zeroed in on your dream home and it fits your budget. The next step is to iden tify the lender who will provide the loan you need to make the purchase. It can be a daunting task, given the number of financial institutions and banks operating in the space. "Eligibility criteria, interest rate, processing fee and other factors will be key to deciding your lender," says Rishi Mehra, Co-founder, Deal4loans.com, a loan comparison service engine. Start your search by evaluating the home loan offerings from lenders in the following manner.

Loan amount and eligibility

The quantum of loan you are likely to get will depend on your monthly income and the value of the property. Typically, the loan amount would be 80-85% of the property value. However, it could be more in some cases.  For property valued up to `30 lakh, the customer can avail of a maximum of 90% funding, subject to his income eligibility as assessed by the lender. The RBI, through a notification last year, allowed a loan-to-value ratio (LTV) of up to 90% for home loans of `30 lakh or less. Earlier, 90% LTV was allowed for loans of up to `20 lakh.

Whether you get a home loan at all or not would depend on your occupation (salaried or self-employed), disposable income and number of dependants. Remember, a bigger loan would imply a smaller down payment, but a higher EMI.

Interest rate

The rate of interest on the loan, which will influence the EMI and the total interest paid by you, must be considered before applying for the home loan. Shop around for rates and

choose the most competitive one. You also need to find out if the rates are fixed or floating. When rates are fixed, there are no fluctuations. Floating rates vary according to market conditions.  Fixed rate of interest is 25 - 100 basis points higher than the floating rate.For a shorter loan tenure of 2-5 years, it is better to opt for fixed rates. But for a longer tenure, floating rates works best.

Processing charges and prepayment

The processing fee is the charge banks deduct for processing the loan. This can be anywhere between 0.25%-2% of the loan amount. Lenders also set terms and conditions pertaining to prepayment. Borrowers must clarify the terms related to settlement and foreclosing the outstanding amount, transferring the balance to another lender's account, prepaying a part of or the full amount of the home loan, and other things, before finalising a lender.

Responsiveness to change in rates

You are more likely to get a fair deal if you opt for lenders who slash interest rates in response to a cut in repo rate by the RBI.

Documentation

Though most lenders seek the same documents, like proof of age, address and income, actual requirements may vary.

 

The time taken to sanction and disburse home loans varies from bank to bank. On an average, banks take around five days to sanction a home loan, provided all documents are in order. There are a number of post-disbursement services involved. These include getting regular account statements and interest certificates on time every year. Choose a lender with strong systems and good record of after-sales service. After the loan is sanctioned, the bank's surveyor will visit the property to prepare a technical and legal report. Based on the report and current market value, the valuation of the property will be done by the bank.

 

imggallery

 

-----------------------------------------------
Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds

Top 10 Tax Saver Mutual Funds to invest in India for 2016

Best 10 ELSS Mutual Funds in india for 2016

1. BNP Paribas Long Term Equity Fund

2. Axis Tax Saver Fund

3. Franklin India TaxShield

4. ICICI Prudential Long Term Equity Fund

5. IDFC Tax Advantage (ELSS) Fund

6. Birla Sun Life Tax Relief 96

7. DSP BlackRock Tax Saver Fund

8. Reliance Tax Saver (ELSS) Fund

9. Religare Tax Plan

10. Birla Sun Life Tax Plan

Invest in Best Performing 2016 Tax Saver Mutual Funds Online

Invest Online

Download Application Forms

For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call

---------------------------------------------

Leave your comment with mail ID and we will answer them

OR

You can write to us at

PrajnaCapital [at] Gmail [dot] Com

OR

Leave a missed Call on 94 8300 8300

-----------------------------------------------

Popular posts from this blog

What is Electronic Clearing Service (ECS)?

  As the name suggests, it's an electronic process through which money can be transferred from one bank account to another. According to RBI, this mode is usually used for regular payments and receipts, like distribution of dividend, interest, salary, pension etc. This mode is also used for collection of bills for telephone, electricity, water, various types of taxes, payment of EMIs , investments in mutual funds , payment of insurance premium etc. There are two types of ECS , like most other banking transactions, ECS credit and ECS debit. An ECS credit is used by a bank account holder , usually a large company or an institution for services like payment of dividend, in terest, salary, pension etc. If your mutual fund pays you dividend to your bank account, of all probability it is being paid through ECS credit.ECS debit, on the other hand, is used when a company or an institution is getting money from a large number of people. For example if you are investing in a mutual fund sc...

WEALTH TAX

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300 WEALTH TAX   WHAT CONSTITUTES WEALTH? For wealth tax purposes, "wealth" means property , urban land, car, jewellery , yacht, boat, aircraft and cash in hand in excess of Rs 50,000. CAUTION POINT | Do not think you will have an easy escape from wealth tax by transferring your `wealth' without consideration to your spouse or minor child. Such assets will also be considered as your wealth. HOW TO DETERMINE YOUR TAXABLE WEALTH Add the taxable value of the above assets (computed as per the detailed rules for valuation) owned by you as on March 31 (for FY 2014-15, it will be March 31, 2015). In case you sold your car during the year, it will not be taxable wealth. Deduct loans if any obtained by you to acquire any of the taxable assets from the value of gross tax out for at least 300 days in a...

Equity Savings Fund

Invest Equity Savings Fund Online   The best part about these funds is that they are subject to equity fund taxation and at the same time are structured like MIP like funds . This new category, equity savings funds , offer a little of everything. They allocate money to equities & equity related instruments, and fixed income. They aim to generate returns by diversification. Such funds invest in fixed income and arbitrage to protect the investors from short term volatility and equity for capital gains. The best part of these funds is that they are subject to equity fund taxation and at the same time are structured like MIP funds.   MIP funds however are subject to debt fund taxation. Investors Equity savings funds are suitable for the following: First time investors who seek partial exposure to equity with less volatility and greater stability Investors seeking moderate capital appreciation with relatively lower risk Those wh...

How to Pick Top Performing Mutual Fund Schemes

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   How to Pick Performing Schemes  Funds that continue to stay in the top grade of performance over longer periods are the ones to bet on, advise investment experts   The mutual fund performance charts of the past few months make for an impressive reading. Funds across all categories boast of stellar returns. Sample this: The mid and small cap category has averaged 77 percent return over the past 12 months, with the best fund delivering a staggering 120 percent. The tax-saving funds also average an impressive 51 percent, including a fund which has soared 92 percent. Many of the table-toppers are funds of proven quality and track record. However, there are also schemes that are not that well-known. Some of these have rarely made it to the performance charts in the past, yet, of late, they bo...

8% Government of India Bonds quick guide

For those seeking comfort in safety of returns, the Government of India issued 8% savings bond once again comes to the fore. First launched in 2003, these bonds are issued by the government with a maturity of 6 years. The bonds are available at all times with specified distributors through whom you can apply to invest in them. Here is a quick guide to what the bond offers and its features to ascertain to check for suitability. What are Government of India bonds Government of India bonds are like any other government bonds with specified rate of interest. The rate is fixed at 8% per annum paid half yearly, or you can opt for cumulative payment of interest at the end of the tenure. You can buy these bonds from State Bank of India and its associates, other nationalized banks and some private sector banks such as HDFC Bank Ltd and ICICI Bank Ltd, among others. The bonds can be bought from the offices of Stock Holding Corporation of India as well. They are available in physical form onl...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now