Now, get a loan for 30 years for Rs 1 CR property! With more and more millennials opting for home loans, banks for the first time have decided to give out loans for as long as 30 years for properties valued at more than Rs 1 crore. As of now, State Bank of India and HDFC have taken the lead, while other banks are likely to jump the bandwagon soon. All salaried people in the age group of 25-30 would be eligible for this long tenure loan. This move by banks clearly suggests that while economic growth is chugging along, employment scenario is most likely to improve in 2016 with MNCs offering hefty packages to the freshers. Moreover, with 7th pay commission doing the rounds, salaried people will have more disposable income in hand, which opens a bigger room for property buying or upgrading the existing one! Convinced enough? Well, let us tell you that there are several factors that can help you make a better decision when selecting the right provider for your home loan. Here is a snapshot! 1. Processing and disbursal speed Availing a home loan requires submission of many property and income related documents, making the whole business time-consuming. Moreover, the time for processing and disbursal differs from bank to bank. Thus, select a lender that has fairly simple processes and is quick in processing a home loan application. In a scenario, where all the documents are in place, it usually takes 10-15 working days to process an application and 3-5 days to disburse the sanctioned amount. 2. Repayment terms Repayment of loan also comes with a heavy baggage of terms and conditions. Thus, make sure to read them carefully and clarify it with the lender. In addition to repayment, a borrower must also clarify details pertaining to prepayment, foreclosing the outstanding amount, transferring the balance to another lender’s account, etc. Most of the banks charge prepayments penalty these days. However, if one has availed loan on floating interest rates, as per the new guidelines by the RBI, banks are not allowed to collect prepayment penalty. 3. Interest Rates This is one of the easiest way to select a lender. Always compare the interest rates before taking the plunge. 4. Fixed vs. floating rates
The rule of thumb is that if the loan period ranges between 2 to 5 years, going with a fixed interest rate is considered an ideal move. While, floating rates are considered ideal for long tenure loans. Fixed rate home loan borrowers can also shift to a floating rate of interest option, but with a huge cost, which can be one percentage point of the outstanding loan at the time of balance transfer. You can even go for a hybrid loan, which enables the borrower to enjoy the best of both fixed and floating interest rates. 5. Hidden charges Hidden charges is something that tends to prick the pocket of borrowers the most. Thus, while narrowing down the options, it is advisable to compare the processing fee, down payment, valuation fees, prepayment costs and other charges levied by different lenders. 6. Making the RIGHT choice Banks does a thorough check of borrower on different parameters, then what is stopping you? It is always better to have the terms and conditions clarified well in advance. Source: CommonFloor.com For Latest Updates on Real Estate Updates, Property News and Cities Infrastructure Developments Visit: https://www.commonfloor.com/guide
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