Home loan rates are variable,
depending on status. Monthly repayments will depend on the amount
borrowed and term. For many billions of People, the single greatest
achievement in life was to own a home, and thanks to a range of
banking services now available, home loans are a simple affair now.
In fact, home loans are now sold as a product and the applicant is
treated like a consumer. Gone are the days when ordinary folk
depended on a lifetime of savings and resorted to the local
moneylender to build or buy a house. Home loans make it possible to
move into your own home, almost as soon as you can afford the
down-payment and keep paying for it while you also live in it. But
the home loan is actually a mortgage and you could lose the home in
case of repeated default.
Most banks have standard guidelines for applying for a home loan and
a set of rules, which may vary, from one finance institution to the
other.
The term of the loan may range from one year to thirty years, with
varying interest rates. The longer the term, the higher the interest
charged, usually. However, having decided on a longer term, a
pre-payment of the loan also leads to pre-payment penalty - which
usually ranges from one to two percent.
For instance, most home loan applicants have to be between
twenty-one and fifty-eight years of age, or at least the guarantor
has to be. There may be age limit extensions of government employees
or self-employed people who will not be forced to retire at sixty.
Applicants for home loans must prove to be credit-worthy before a
loan is sanctioned by the bank or the finance institution concerned.
For one, they will demand to see proof of income or some proof that
the applicant - now referred to as a consumer - has the resources to
repay the loan. The EMI, or the monthly installments, will be a
certain percentage of your income.
Taking a home loan also has tax advantages, which makes it a doubly
good investment, as compared to other conventional forms of savings. |