How to tackle high home loan rates.

                                      

There is a steady hearsay in the market on whether the interest rates force up further, stay behind stagnant or diminish over a time period. Moreover, the insensitive reality is that the recent climb in home loan rates has fasten the budget of just about 3 million households. The EMI's have risen extensively, and with monthly earnings unable to keep pace with the increasing expenditure, people now stretching too extreme to make ends meet.

Those who are concerned, whether the presently prevailing hovering rates on home loans, will surpass the fixed rate can try to adapt their floating rate into a fixed rate one. Although the fixed rate are not often truly fixed, however, the banks commonly lock them for a fixed period of around 3 years. Earlier to taking any such measure it will be valuable to acquire all the truth concerning the fixed rates and their period. An additional thing that warrants interest in this case is the cost bank charge to switch from floating to fixed and vice Versa

In this quick ever-increasing interest rates regime, there are banks and housing finance companies (HFC's) which, are gripping the alarm and keeping the interest rate load to themselves. It is judicious to compare the presently prevailing interest rates of all such banks and HFC's. If someone finds one such entity, which offers a cheaper interest rate of 0.50% or more and offers balance transfers, think it seriously. The thing to observe out is the balance transfer fees, the EMI's and loan tenure. Make sure that the benefits of transferring balances are not outweighed by the balance transfer fees and harsher conditions.

If your banks let an augment in your loan tenure, this will notably diminish your monthly home loan EMI load. One foremost thing a bank keeps in mind despite the fact that deciding for an increase in loan tenure is the age of the candidate. If one are not nearing retirement and have a substantial employment track record probability are the banks will relent. The upper age limit is 60 years for salaried and 65 years for self-employed with most of the banks.

A good option to decrease the EMI burden is to prepay a part of your home loan. Part prepayment is allowed by leading banks subject to their terms. If one have a fixed deposit, or any other asset which can be used to bring down your total home loan amount, try to use it. Some people think that taking another loan or overdraft on their existing deposits and using that money to pre-pay a part of home loan is an excellent option, but it is only another loan. Though, it will make your decrease your EMI's on the home loan but will add another repayment burden for the new loan.

Budgeting is a tool which is much recommending but rarely used. We go on spending money without sparing a thought about its usefulness. If one keep a track of everyday expenditure and weed out the unnecessary ones, one have some spare valuable cash! This will be a mighty handy resource to fund this hike in EMI's or at least a part of it. Though, budgeting will require a little self discipline, but the amount of help it can bring to strained financial situation can never be understated.