One of the most important investments that a person has to make in his lifetime is the investment of purchasing a home. In today’s day and age, purchasing a home has become a very costly affair, and hence sourcing money for the same becomes a very big issue. The first problem that a person faces once he makes a decision to purchase a home is where to get the finance to purchase the home from. People today can not only take up a home loan with a bank but also do the same from Housing Finance Companies which are more commonly known as HFC’s.
Home Loan Rates India
The rate of interest of a home loan depends on the amount of loan being taken up, the duration for which the loan is being taken and the kind of property being purchased with the loan amount which is sanctioned. The institution which is lending the money in the form of a home loan, will conduct a thorough search of a lender’s financial standing.
There are different kinds of home loans structures available. The first kind of Home Loan is the one with a fixed interest rate. In this kind of loan, the rate of interest remains fixed throughout the entire duration of the loan. The highest interest is charged on such loans and very few people in the market provide the same.
The second kind of Home Loan is the one where the rate of interest can be reset after a certain number of years. For example, the rate of interest can be fixed for the first 5 years after which it is reset for another 5 years and works on a similar module going forward. The third kind of home loan follows the floating rate of interest, which depends upon the base rate which has been set by the bank which is sanctioning the loan. The bank needs to be transparent in its dealings and declare the base rate at least once in every quarter. Different banks follow different methods to fix the base rate.
There are various websites available now, which can help a person calculate how much he will have to pay as an Easy Monthly Instalment in order to repay the home loan within the stipulated period of time. There are websites that can also help a person who wants to take up a home loan, compare the interest rates being offered by various banks and institutions before finalising on a particular one.
Similarly, banks in India have started employing a ‘Relationship Manager’ who can help a person to make the right decisions in terms of any financial matter. Banks in India also offer people additional special schemes on taking up a Home Loan with them. Some of these special schemes include a waiver of the processing fee, Insurance covers etc. On an average, the interest rates on Home Loans in India range between 10.50% and 11.50% but may vary depending on market conditions. Some banks even charge people for making a pre-payment on a loan amount but this trend is changing for good. A person should read all the terms and conditions of the Home Loan before investing in the same.