Home loans are long-term loans lasting up to 30 years, which ensures that you are bound to devote a significant portion of your revenue to pay them. Home Loan Interest Rate matters as more than 50 per cent of the Home Loan EMI portion is the value of the loan interest you pay to the bank over the loan duration. Present interest rates on home loans vary from 6.75 per cent to 12.15 per cent with the lowest EMI of 655 per lakh. You should strongly consider moving your home loan to another bank if you find like the interest rate and EMI you pay on your current loan is higher than the lowest rate and the lowest EMI bid on the market.
The advantage of the conversion of the home loan is from the first 4 to 5 years of the loan since you pay the maximum interest component of the initial years. Loan conversion in the middle of the end of the tenure will work against you financially since you have already paid the higher part of the interest to the lender. So, before you plan to opt for a balanced swap, make a detailed review of all the savings and risks involved with the transfer of the debt.
What are the advantages of a home loan transfer?
Reduction of the interest rate from a high rate to as little as 6.75 per cent a year
Reduction of monthly EMI by up to 5 per cent, based on the difference in rate, balance, and EMI.
Option to use a top-up loan at the same cost as the home loan rate (6.75 per cent to 8.8 per cent) according to eligibility requirements and the loan-to-value ratio.
Higher interest rates and other discounts such as zero transaction fees provided by another lender such as HDFC Home Loan.
The choice to pay for a smart home credit saver to save interest.
Balance of transfer options applicable to various banks such as SBI, Bank of Baroda, HDFC, ICICI, and others
Eligibility Requirements for Home Loan Transfer Balance
You can opt for a swap of your home loan balance if you have an unpaid home loan with one deposit. The basic qualifying requirements are age, salary, work experience, and the loan-to-value ratio. Other main eligibility criteria that are relevant for refinancing the home loan-
Applicant must operate a current home loan from another lender.
Until opting for a balance transfer, any lender can order the debtor to pay at least 6 to 12 EMIs on an existing loan. However, this provision can also be waived and the takeover of a home loan may be necessary even though the loan has not lasted for 6 – 12 months.
There should be no default on the payment of EMI for current loans
In the case of under-construction land, the new lender must approve the project. Notice that the remainder of the conversion of the home loan to a new property whose ownership has been turned over but has not been registered will not be practicable.
Registration should have been done in the case of ready land.
Home Loan Balance Phase Transfer
To move your loan from one bank to another, follow the basic steps below.
Test and measure interest savings at the present rate
Calculate the approximate expense based on the different charges mentioned above
Shortlist the new bank to which you wish to move the loan; determine whether or not you want a top-up loan Receive a list of property documentation deposited with the original bank (if this is not already available) and a letter of foreclosure from the current bank
Apply for a loan with a photocopy of property documents with a new bank as per the list of property documents with the current bank
Obtain a letter of sanction and conduct a new loan deal
Take the disbursement from the new bank by way of a check/demand bill in favour of the current bank and also deposit the same.
Home Loan Conversion Fee
Charges for the conversion of your home loan can vary based on the current bank, the new bank, and the condition of the transfer.
Foreclosure payments are owed to the current bank on the purchase of fixed-rate mortgage loans. In the case of floating rate home loans, banks are not permitted to charge any fees for the cancellation of the loan.
Home Loan Processing Fees on transfer may vary from a flat fee of 10,000 to 1% of the loan sum. However, banks provide concessions on payment costs from time to time, and you need to get the most appropriate loan offer with enticing deals through marketplaces like MyLoanCare.
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