What factors to consider while taking a home loan?

 Last month, the Reserve Bank of India (RBI) kept its key policy rates steady. It aided the banks in keeping home loan interest rates low. Some lenders even went so far as to reduce it further to aid the recovery.

The Housing Development Finance Corporation, or HDFC, India's largest housing finance institution, is providing new applicants home loans at interest rates as low as 6.7 percent, regardless of loan size or work status. In recent months, it has joined State Bank of India and Kotak Mahindra Bank in lowering home loan rates.

For a limited time, Kotak Mahindra Bank is offering a rate of 6.55 percent per annum, while SBI is giving house loans with rates starting at 6.7 percent. Last year, the interest rate on a home loan fell below 7%.

The credit score of the borrower is a significant aspect in determining the interest rate. HDFC, for example, offers a premium rate to people with a credit score of 750 or higher. The age and income of the homebuyer are other important considerations.

Homebuyers have benefited from record low mortgage rates, government subsidies, and tax perks, according to HDFC Managing Director Renu Sud Karnad.

After the epidemic ravaged the economy, interest rates have declined as a result of the Reserve Bank of India's liquidity infusion policies to stimulate growth and loan uptake. For the time being, house loan rates appear to have reached a nadir.

Customers must, however, consider a few additional factors before purchasing a home in the current market.

The interest rate on most home loans is tied to an external benchmark, usually the repo rate of the Reserve Bank of India. Customers will not be able to lock in the present rock-bottom rates as a result. As the repo rate rises, so will the EMIs.

In the most recent monetary policy pronouncement, the repo rate was remained at a record low of 4%.

To protect cash withdrawals from market fluctuations, one can choose a fixed interest rate. However, it has slightly higher interest rates than floating rates.

The central bank is expected to raise interest rates in the first half of 2022, according to experts. The RBI is also likely to gradually reverse its accommodative policies, which have supported easy liquidity. All of this could lead to an increase in interest rates.

Down payment, stamp duty, registration fee, and property tax are all costs to consider for homebuyers. A stamp duty of 7% is payable in Noida on the total cost of the apartment purchased. In addition, there is a 1% registration fee. Every state has its own set of rates.

Of course, under Section 80C of the Income Tax Act, buyers can deduct up to Rs 1.5 lakh for principle repayment. In addition, under Section 24B, a deduction of up to Rs 2 lakh can be claimed on interest payments.

Before making the major move, borrowers should consider loan-related fees such as the processing fee, administrative fee, prepayment charges, conversion charges, legal fees, and inspection fees. Buyers should strive to keep their EMIs under 25% of their monthly income. Experts advise them to invest in ready-to-move projects because they would save money on rent. It will also safeguard their interests, as numerous projects are still years behind schedule.

Conclusion

There's no need to be discouraged if your personal loan application is turned down. To boost your chances of loan approval, simply work on improving your credit report and following the methods outlined above. Once you've completed this checklist, you're ready to submit your personal loan application.To find about the best pricing and deals, call our toll-free number +91-9477079053. They'll help you in every way they can. Please contact me at Best Home Loan In India if you have any more.

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