A home is one of the biggest assets but home loan is
considered as one of the biggest liabilities. Taking a home loan is a wise
financial decision but transferring it at lower interest rate is another wiser
move if taken in time. To catch the attention of the borrowers and make great
businesses, banks and lending institutes try to blindfold the customers by
releasing lucrative advertisements. So, here are some tips that you should
consider while transferring the home loan.
Total Outflow
Generally banks brag about the lower EMIs and longer tenure.
In this case you should calculate the total outflow and do apple to apple
comparison to check all the payment layoffs. In longer tenure the borrower
usually end up by paying the higher loan amount in terms of paying interest
rate for long run. If your budget is not bootstrapped then it is recommendable
to stay up with the existing lender and pay off the loan amount as soon as
possible.
Processing
Fees and Allied Charges
In case of Home
Loan Balance Transfer Consider the processing fees, stamp duty, valuation
fees, technical and legal charges and other administrative charges that new
bank will be levying on you. Compare it with the reduced interest rate and
calculate the net profit or net loss. If it seems profitable then you can go
ahead with the home loan balance transfer.
Collateral
and Outstanding
In case you have paid a larger amount of the collateral then
do not show the entire collateral to the new lender. Offer your bank a lesser
amount of collateral. In fact use it for taking another loan whenever need
arises. Negotiation is the best trick to get the best deal. Compare the offers
from different banks and then close the deal.
Allied
Account Requirements
Whenever you avail a loan, banks commonly ask you to open an
account through which all the repayment will be enrooted. If the case is so
then get all the details, applicable charges and the facilities provided. If
your current account through which you perform all the banking is with the
existing lender for many years then you are a premium customer for them. You
are very well versed with their banking norms, you know their staff and you are
getting the faster services. These quality services, ease of use and comfort
banking will go a long way. Consider these sweeter aspects of the existing
lender and do not get fascinated with the lower rate of interest.
[Source: http://www.sooperarticles.com/finance-articles/loans-articles/important-points-while-transferring-your-home-loan-1415599.html?]
