Posts Tagged financial institution

Transfer your home loan to get relieved from your loan burden

August 12, 2011 at 7:15 am · Filed under Builder, Finance, Growth Investing, India Real Estate, Indian Properties, Indian Real Estate, Investing, Loans, Marketing, Properties, Prospecting, Real esate, Real estate trends, Residential Property, Selling ·Tagged , , , , , , ,

home loan atoneplaceInterest rates for home loans have experienced a dramatic rise since last year, escalating the EMIs on home loans, specifically for home buyers who choose floating interest rates. As expected, most of them are taken aback by the effect increasing interest rates on their monthly expenditure. Furthermore, many financial institutions are thinking to further toughening the home loan interest rates in the coming months.

Financial connoisseurs always advise that the home loan seekers should always keep their EMIs within manageable limits. This means that if you are going for a bigger home loan amount then you can pre-pay the loan, bargain with the bank to offer you better interest rates or even try and stretch the loan duration so that you can maintain your monthly expenses.

CHANGE THE FINANCIAL INSTITUTION

You can opt for home loan refinancing or balance transfer by changing to another financial institution or bank in order to get a better deal. Home loan seekers normally have complains about the banks being unfair to them as they raise the floating home loan interest rates in the tough interest rate situation, but are not keen to reduce the interest rates when the rates have toned down. However, many loan seekers are not interested in changing their financial institution or the lender.

The home loan borrowers who have taken loans before June 2008 have seen interest rates rising to 12-13%.  “Many borrowers who have taken loans prior to June 2008 would have seen their rates touch 12%-13% now. These borrowers should specially go for the option of changing their financial lending vendor.

The financial institutions are also keen to take over the existing home loans by proposing a lower interest rate to lure borrowers. Although the balance transfer will surely decrease your EMI installments but there is no one-size-fits-all key for everyone. To understand whether changing the lender will help you out or not you need to analyze the complete situation and calculate the exact benefits that you will derive from it before deciding anything.

DO THE BASIC WORK

First step in this process is to do a research on home loan interest rates applied by other financial institutions or banks. The rates are available on the web portals of all financial institutions or banks. This research work will actually help you out in getting the best deal, i.e., you can get a better picture about the bank that is willing to charge a significantly lesser interest rate after taking over your home loan.

Transferring the balance can only be beneficial for you if the interest rate difference is at least 1.75 to 2.00% points.

Though, a home loan is a long duration debt, so even half-a-percentage point would make a lot of difference in the long run. For that reason, the duration left for the original loan will play an important part in deciding whether to change the financial institution or not. The bigger the loan tenure is remaining, the more will be your total savings. If you just have 3-4 years left to repay your loan then changing the lender will not make any difference for you but if the remaining tenure is around 13-14 years then switching the financial institution will be helpful in the long run.

CHARGES AND FINES

You also need to consider the pre-payment fee that is payable in name of the existing financial institution.

Most of the financial institutions do away with this fee if the prepayment is made by the borrower’s own account. Hence, you will be charged with a penalty in case of balance transfer for the existing home loan.

Normally, most of the financial institutions or banks levy around 2% of the remaining home loan amount as pre-payment penalty. This can turn out to be a considerable amount especially when the remaining home loan amount is sizeable. It could turn out to be a significant amount, particularly if the outstanding balance is huge. Though it is a one-time payment, but you need to check the impact it will be making on your total savings in order to calculate the actual benefit attained.

Though, many home loan seekers are not aware that the financial institution or the bank which is taking over the loan also finances the prepayment penalty cost.   So the fear of paying a huge amount as the penalty should not restrain you from going for a balance transfer.

Along with this you also need to take into account the processing fees that the new vendor will be charging you for refinancing the home loan. Most financial institutions or banks levy 0.5% of the total home loan amount as processing fee.

home loan atoneplaceCOST-BENEFIT EVALUATION

If you have decided to change your home loan vendor then the first thing you need to do is to evaluate your total savings during the complete duration of the home loan period. In simple words, you need to calculate savings on interest expenditure subtracting processing fee that you need to pay to the new opted financial institution along with the prepayment penalty.

THE PROCESS

The process to change the financial institution or the bank is moderately easy. The home loan seeker needs to comply with the norms laid by the new bank for credit-worthiness and repayment capacity.

Once you meet the conditions laid down by the new bank, the property-related papers will be handed over to the new lending financial institution by the old one prior to the outstanding payment is made in the name of the latter.

The borrower’s role in the transfer process is limited but you should all the loan and property-related documents in place. If in case, the previous financial institution fails to give some original documents to the new bank then you should always have photocopies of the same available with you.

Hence if at any point of time you feel that you are wedged with your current home loan provider in spite of economical options existing in the market, then you can surely consider the option of switching over the financial institution or the bank.

Calculate all the fees and penalties, bargain with other financial institutions and you can lucratively cut down your EMI installments regardless of the increasing home loan interest rate situation.
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Home Loan Pre-conditions for purchasing a land to build for residential purpose

June 22, 2011 at 5:26 pm · Filed under Banks, Brokergae, Builder, Growth Investing, India Real Estate, Indian Properties, Indian Real Estate, Investing, Loans, Marketing, NRI Related, Pre-owned homes, problem, Properties, Prospecting, Real esate, Real estate trends, Reality Firms, Realtor, Referal, Repatriation, Residential Property, Selling ·Tagged , , , , , , , , , , , , , , , , , , , , , ,

indian real estate atoneplaceMajority of financial institutions lend home loan to borrowers who are planning to buy a patch of land to build their dream home. Banks grant land loans to salaried and self-employed people and even to NRIs. These loans empower you to buy a residential piece of land.
WHAT KIND OF LAND CAN BE BOUGHT?
Banks do not offer land loans on an agricultural land. As per the guidelines laid down by the Reserve Bank of India, a land loan is specifically given for buying lands for residential means only. Few lenders have fixed set of norms under which the land should be located within certain municipal limits. Apart from this some financial institutions add on a number of restrictive clauses that demand the purchaser to start the construction process on the purchased land within a duration of six months to a year.
IS IT FITTING FOR YOU?
There are a lot of factors that affect a person’s choice of building his dream home on his own. One such factor is the price. Buying a piece of land and then constructing the house on it can some time turn out to be a less costly affair. Also, one can set the pace of construction as per wish to suit his financial conditions. Constructing the home oneself facilitates the owner to put into action his all creative ideas in design and color schemes. Apart from this one also has a liberty to put off main operating cost, enhancements and addition to a future date.
HOW DIFFERENT IS A LAND LOAN FROM A HOME LOAN?
The interest rate for a land loan is on a par as compared with the interest rate of a home loan. One cannot ask for income tax deductions on the interest rate paid for a land loan. But if a borrower converts the land loan into a home loan to get financial support for the construction purpose of the residential property, then surely he can get all the tax benefits available under the Income Tax Act. Apart from this, once a completion certificate is obtained from the appropriate authority, the interest rate paid on the loan is entitled for IT benefits.
DOWN PAYMENT
Borrowers who are looking forward to get a land loan have to pay a higher down payment amount. The loan-to-value ratio for land loan in the case of down payment often goes as high as 70%. Normally, an individual who opts to take a home loan has to pay for only 20% of the cost of property.
DOCUMENTS REQUIRED
It is always advisable to appoint a legal expert to check and verify all the legal documents of the plot in concern. Apart from this, one should also verify the layout drawing of the site as approved by the town planning authority, and no encumbrance certificate of the land. Other property documents that need to be validated comprise of original documents pertaining to ownership of land, revenue receipts, land records and tax receipts.
DOCUMENTS REQUIRED WHILE APPLYING FOR A LAND LOAN
Before the borrower applies for the land loan, he should have some documents in place which include original site ownership documents, tax receipts for taxes paid by the owner, layout drawing, revenue receipts , no objection certificate from society for sale and transfer of land, and no encumbrance certificate for the land.
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Borrow the correct amount of home loan to purchase your home

June 21, 2011 at 5:43 pm · Filed under Banks, Broker, Finance, Growth Investing, India Real Estate, Indian Properties, Indian Real Estate, Investing, lawyer, legal, Loans, Marketing, Properties, Prospecting, Real esate, Real estate trends, Reality Firms, Referal, Repatriation, Residential Property, Selling ·Tagged , , , , , ,

home_loan_atoneplaceBanks are pursuing potential borrowers with their teaser interest rates and exclusive offers. The real estate scenario today is experiencing development of new projects all over the country and builders are engaged in pushing their completed projects at good prices.
BORROWING CORRECT AMOUNT
In the current economic scenario, most of the people who are buying homes are young, salaried IT employees, professionals, entrepreneurs and self-employed businessmen. Real estate has always been considered as lucrative and prudent investment option. The present generation has bought down the age of  purchasing homes. The average age now is 28 -34.It is not like 20 years ago  when most of the home buyers belonged to the age group of  late 40s, who used all their savings to purchase a property. Today, the times have changed, the young generation is well traveled and  more dynamic , and they are also being helped by the different financial institutions that have made home loans a far easier process than in the olden days.
The important thing to remember for taking a loan is not to  extend the finances beyond a certain limit . The real estate market has product for every pocket i.e from economic affordable housing to ultra luxurious lifestyle condominiums and bungalows. The thing to remember is  A bigger amount of home loan means that the borrower will have to pay higher amount as EMIs.
The banks are ready to give home loans of about 50%  to  55%  of the borrower total monthly take home salary after doing their own due diligence of the clients credit worthiness. Individuals of today are intelligent enough to understand their monthly  expenses of their household. Market experience shows that not more than 30% -35%  of your monthly income ( whether individual or combined) should form part of your EMI. As you move along in life various other needs keep cropping up like education and upbringing  of children , medical expenses etc plus the inflation factor is always there.
STAY AWAY FROM DEBT CONhome_loan_atoneplace
One needs to keep in mind also that when interest rates increase, the home loan borrowers who have opted for  loan have to pay increase  EMI installments. If one has not been  prudent enough while taking a loan and has taken a bigger amount of loan then in some cases one has  to make drastic changes in their day-to-day life and can even have to do away with their current lifestyle, luxuries, periodic investments and saving for emergencies. As mentioned above The amount given by the banks or the financial institutions as home loan results in an EMI and if EMI becomes more than  40 % of the borrower’s total monthly take home salary.  The thumb rule suggests that it becomes hard for the home loan borrower to pay back to the financial institution. When borrowers are not able to pay back their EMIs, they end up taking some more loans to repay their previous loan. This taking of more loan to repay the previous loans is not advisale as it might drag a borrower into a vicious circle of debt trap
So the mantra which really everybody of today generation knows is to borrow right and tight. In today’s market scenario there are home options for every pocket.
And yes do remember “OLD is GOLD”, so  do not hesitate to take advice of your elders and well wishers,. You will not loose anything, on the contrary will only gain from their experience.
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Handling home loan interest rate hikes effortlessly

June 17, 2011 at 5:29 pm · Filed under Banks, Finance, Growth Investing, India Real Estate, Indian Properties, Indian Real Estate, Investing, legal, Loans, Properties, Prospecting, Real esate, Real estate trends, Reality Firms, Repatriation, Residential Property, Selling ·Tagged , , , , , , , , ,

home_loan_atoneplaceRecently many financial institutions have raised their benchmark prime lending rates (PLRs). The PLR is normally a reference or benchmark interest rate that is used by the financial institutions for lending loans. The Reserve Bank of India’s decision to raise the key rates affected many banks as they felt the heat of increased cost of funds. To uphold their profitability, the banks transferred this load to the borrowers seeking home loan.
For borrowers who are tight on the budget will surely be affected by the hiked interest rates. But the market analysts opine that instead of losing the nerve, the borrower should understand and learn to handle his financial standing and debts more proficiently.
BE EQUIPPED
Borrowers who have opted for a floating interest rate should expect fluctuations in rate of interest. Some financial institutions even do not intimate the borrowers about the hike.  Nor do they alert their clients of any approaching rate increase. Save some amount up your sleeve every month which could be used if in case the lender unexpectedly decides to increase the EMIs.
BUY AT INITIAL STAGE
Purchasing a house at initial stage ensures that the buyer will become debt free very soon. Also, paying off the home loan early in life helps to boost other investments sooner.
BORROW AS PER THE REQUIREMENT
Bigger loan amounts take a longer duration of time to be cleared and can turn out to be more challenging. Home loan borrowers who are not able to pay off the EMIs on time might turn into a defaulter and can even lose their dream home.
STAY AWAY FROM MORE LOANS
If you are not able to pay back the home loan installments on time then you should try to find out a better repayment option with the financial institution. Taking more personal loans and credit card purchases will only turn the conditions difficult. Stay away from unnecessary expenditure.
FIND ALTERNATE SOURCES
A loan against security, a gold loan or borrowing money against any property can be an alternate source to generate the much-required funds. You should not bring your emergency or contingency fund to a halt. Find alternate sources or assets that you can sell and prepay your home loan amount as much as possible.
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Qualified Norms For Home Loan

June 16, 2011 at 5:08 pm · Filed under Banks, Finance, Growth Investing, India Real Estate, Indian Properties, Indian Real Estate, legal, Loans, Properties, Real esate, Real estate trends, Reality Firms, Repatriation, Residential Property, Selling ·Tagged , , , , , , , ,

home_loan_atoneplace
To apply for a home loan is not a Herculean task as it is made out to be.
As the individual are eager to get their loan approved so are the banks  looking disburse the home loans to increase their  own cash Flow.  Most of the banks whether national or multinational are now disbursing the loan to home seekers in India. But before disbursing the loan the banks want to minimize their risk of default of their loan which in any business is a normal practice to mitigate its risk. So there are certain checks and balances that banks normally do . A bank or financial institution has their own criterions and norms to decide the eligibility and amount of home loan. A housing loan receiver would not face any complications by being alert of these factors.
Verification
The home loan application form offers details about the borrower. The details that are offered by the applicant in the application form are cross-checked by various primary and secondary sources i.e., through interview, calling up the employer, verifying from the bank’s database etc. Do make sure that the informations are not fudged as it will hamper the chances of loan approval.
Repayment ability
 The loan eligibility is based on the  repayment ability  on the financial status of the applicant. The income level, net income, liabilities etc are the factors that ascertain the quantum of home loan a borrower is eligible for. The prerequisites comprise of a particular minimum income or a fixed source of income. The credit history of the applicant also plays a vital role. Normally, the financial institutions keep a complete record of the borrower and check the credit history to ensure prior repayment defaults, even from other financial institutions.
Personal Information
 These factors comprise of educational qualifications, profession, number of dependents, assets owned, liabilities owed, savings history etc. Higher the education of an applicant increases the points of an applicant. If an applicant has a higher number of dependants or existing liabilities that means lower repayment ability in the terminology of the banks..
Age
Age plays an important role in deciding the earnings capability of a home loan applicant. If a property is co-owned then the co-owner cannot be a minor. Also, the co-owner of a property cannot be above a specific age limit. The age restrains are fixed to reduce ownership rows. The age limit also have an effect on the duration of the home loan and EMIs.
The applicant’s retirement age is also taken into consideration. Generally the loans are given for a tenure of 20 years so once the applicants cross the age of 40 the tenure of loan terms is also reduced because in India the retirement age is taken as 60 years by most banks.
Property Location
Location of the property also has influence on the eligibility of home loan. There are few regions that are specified as being “negative” in the books of some financial institutions. Where the banks will not give loans. Lenders have fixed laws with respect to a minimum area of the house. This area may be built-up area or carpet area of the house. In case, the applicant is buying existing properties, then banks will also take into account the age of the property. Financial institutions sanction home loans on resale properties only if their property age is less than 50 years old.
Financial institutions carry out legal and technical appraisals of the property to check whether the property title is clear or not, there are no ownership disputes, the property is free from any encumbrances etc These titles should be clear to be eligible for the bank loan.
The above points are not at all difficult to meet provided one chooses a right property and has got right papers to support his loan applications. Thousands in India are taking loan and thousands will continue to do so in future also.
All the best for your home loan approval!
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Things to check before buying your dream home

June 15, 2011 at 11:15 am · Filed under Agent, Banks, Broker, Builder, Commercial Property, India Real Estate, Indian Properties, Indian Real Estate, Investing, legal, Loans, Marketing, NRI Related, Pre-owned homes, Properties, Prospecting, Real esate, Real estate trends, Reality Firms, Realtor, Residential Property, Selling ·Tagged , , , , , , , ,


Purchasing a dream home is a very crucial choice and should be thought through carefully. A home is not only a roof on one’s head but it also brings about peace of mind and security, and therefore all the aspects related to real estate purchase needs to be taken care of in advance.
Before you buy a dream home, you need to check some important parameters:
1)  Do check the Title Clearance of the land in the name of the builder and the bankability of the project.
Purchasing a dream home is not only confined to the advertised price of the house, but there are certain added expenses that are attached with it and you should  be ready  t to bear  those extra amount.
2) Developers do charge One time “other charges” which includes Internal and external maintenance Charges, Electrical Charges , Club Membership , Car Park etc or any other miscellaneous charges that are USP of the project.
3) Some charges like preferential location charges of Floors,Apartments Park view , etc are all charged extra from the quoted price by the developer.
4) Generally the developers  quote the price on   “down payment, plan” in which the developers give an upfront discount and collect 95% of the total cost within a month.
5) Customers can look for  other payment Plan also which are linked to construction progress of the Project commonly known as Construction link Plan which though has a lesser discount than the down payment plan given by the developer but it mitigates the customer risk  as  the installment given by the customer becomes directly link to the progress of the project, therefore customer also has satisfaction of giving the installment once he sees the progress of the project.
6) The customer  should also be ready to pay approx 8-10% of your house cost as Registration and stamp duty charges before the possession is delivered to him by the developer.This price is not tagged with the asked price of your dream home when the project is advertised.
7) Regarding the cost factor one should also not forget the annual maintenance charges which are being fixed now for every society.
8)- Purchasing a home in India is always a family affair so opinions of the family members should be taken .
Now a days Developers have multiple projects going simultaneously therefore for marketing and selling of projects new avenues have come up in the real estate  market.
The last couple of years have seen the rise of Channel Partners who sell the projects on behalf of the developers to the client. The developers insentivise them and due to the market competition the channel partners do pass a certain percentage of their incentive to the customer. So it is not a bad idea to cross check with channel partner about the discounts that are available for a given project. The catch here for the customer to understand is to buy through a genuine registered established  broking firm
In the current scenario, as both the partners are working, it’s a good idea to take a joint home loan as the amount for home loan gets increased and the bank also takes into consideration the fact that though the payment default risk remains  but is mitigated.
You should also consider the possibility of any geographical change on the work front or otherwise.as you are the best judge of your job profile so invest wisely and well where you think you get good return on your investment  both monetary wise as well as mentally. This is more true in case of an NRI as NRI has to take into consideration the cultural and geographical  factor while making a choice for his dream home.
The above mentioned issues though commonly known to everybody yet  somehow get slipped , it might not be a bad idea to quickly jot down the points that you think are imp for you in decision making and then go on to make your search for your dream home. And then keep them striking out pointwise as you move forward  in your search.
We wish you Happy Searchig but do remember three key words “ Find Decide Buy” in the whole process.
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