If you live with the perception that home loans in India only come in two fixed or floating flavors, its time to wake up to the reality. In keeping with global developments and in a race to stay ahead in the fiercely competitive home loan market, banks and Housing Finance Companies (HFCs) have developed innovative schemes that offer a lot of options for a new home loan borrower. So read on if you’re concerned about having a home loan; the banks might have something exclusive for you.link Homepage
Set, or free rate? Why not just The classic problem of opting for a set loan or a floating loan has been perplexing the typical home borrower for years. Volumes were written about the advantage one has over the other and this added only to the confusion. Taking advantage of the scenario, banks have launched a home loan program, providing the choice to pick a home loan for both the floating and fixed interest rate choices. A borrower may select a portion of his home loan to be paid at a set interest rate and the remainder at variable rates and vice versa.
Tempted by the new set tariffs? Choose Smart fix In recent years, the unprecedented rise in floating home loans has prompted many borrowers to rethink their strategy in favor of home loans at fixed rates. If you are also one of those who would like to take advantage of the relatively low fixed rates, but agree with the universal view that floating rates are best over a long period of time, you can choose a special type of home loan that charges fixed interest rates for a specified period (say 3 years) and then floating rates. Some banks aptly called smart fix, this home loan scheme lets you get the best of both.
Need a bigger place to live? Go for a short-term bridging loan If you are, for any reason whatsoever, dissatisfied with your existing home and desperately want a bigger or better house but don’t want to sell your existing house before you move into the new one, a short-term bridging loan can be the perfect solution. This loan bridges the critical void and allows for an transitional funding agreement between selling your old house and purchasing the new one. After you sell the old house, you can repay these loans in easy installments or by a lump sum payment.
Can’t afford big EMIs now but can’t afford them in the future? Choose step-up repayment Off late banks and hfc’s have been waking to the reality that individual income rates are increasing as their profession advances and that increases their repayment potential over time. They have also agreed to provide what is regarded as a home loan with a step-up plan for repayment. This special home loan scheme provides the facility for lower-level fixing of the EMIs during the initial stages of home loan and increasing with tenure. Some banks also waive the initial duration of EMI ‘s principal repayment portion. And, if you’re a young adult or have spent a couple years employed in a job and can persuade your lender with a noticeable career development, the panacea could be a home loan with a step-up repayment program.
Can major EMI’s do it now but not later? Choose step-down repayment Consider a situation in which a couple in India have taken a joint home loan and one of them is set to retire within a few years. This will build a sticky scenario when it comes to repaying home loans, as one of the lenders’ repayment potential would drop upon his retirement. In such a situation, a home loan with a step-down repayment schedule can go a long way to holding problems at bay. The pair will opt to repay higher EMI’s during the initial stages of home loan, as both of them gain and when one of them withdraws, the pressure of EMI’s can be lessened such that the repayment plan stays faithfully preserved.