Thinking of Buying Home?

By: raju
what could be the most important thing in life that every body wants to have?
everybody on earth always thinks of owning a house of our own even if we belong to low income middle class family. buying a car or other things are different issue.but owning a house gives immense mental satisfaction & happiness to whole family.
 but unlike other dreams this one dream can that could be see reality very easily enough by large number of banks & financial institutions competing with each other to provide loans to middle class. the sheer number of such banks / institutions itself makes taking loan very good option from home buyers point of view.
though the terms & conditions for home loans are different from bank to bank generelly the interest rate charged  by  banks or financial institutions is similar. the difference lies in various types of schems offered  by banks . many such banks  claim that their schems do not have clauses or costs or unnesseary documantion . yet customers have to wary & must make proper enquiries before they opt for housing loan from any bank or institution.
for this purpose to avoid getting caught by banks read all home loan agreemant throughly to save your self  from hidden costs or charges. some major points to be kept in mind while taking for any home loan scheme from any bank by understanding the methods adopted by them for computing interest & select  the most appropriate one for u.
the effective financing cost  on your home loans depends on the interest rate & the  way it is calculated.the reducing balance system of charging interest is often followed by  banks .

so have proper information about it. this method can be further broken down into monthly quartely / half yearly & annual reduction system.preferring monthly reducing system above quartely / half yearly & annualy would be a better prospect.
read your home loan agreemant very cautiously & determine the mode of interest levied on your loan by banks.
after increase in floating rates is it advisable to shift to fixed interest rate?this is not advisable as very few banks provide genuine fixed rate loans.are those where the loan document dose not have any clause in the agreement that allows the bank to change the fixed rate of interest. additionally you will need to pay a fee for shifting to such your emi will go up immediately plus you will need to pay a fee to shift.u must not forget that interest rates move in cycles & that over the tenure of a typical home loan you will able to benefit from drop in rates. if the new banks providing floating rate loan that is atleast 0.50 % cheaper than the existing bank & the balance tenure is not less than 7-8 years then it is worthwhile considering changing over to new financier.
as  a customer u must be aware that u should not blindly accept all that the bank/ institutions tells them regarding the loan scheme. they need to make through inquiries regarding rates of interest  floating or fixed  adjustable rate home loan fixed rate home loan part fixed part floating rate home loan transfer of your existing home loan from other banks etc.
other important aspects that must be enquired about are property approvals,and legality of property deals.most banks have empanelled a team of professional lawyers to verify property deals so  that customers do not suffer from unscrupulous builders. technical verifications/ disbursements, legel papers , dead of declaration, asking the builder for approved sanction plan is also must.generelly if there is a major violation banks advise customers accordingly expressing their inability to fund the purchase. the banks moniter that builders do not violate agreements or loacl muncipal rules.
one more important factor that customers should find out from the funding bank is the change over facility with applicable charges. i.e. if the customer wants to change over from variable to fix, variable to variable,or fixed to fixed, interest on bounced chaques, emi pattern . pdc or electronic clearing. with finance institutions going all out to woo customers it is imperative that customers take professional help before avaling loans or signing agreements.
by raju

Home Loans
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