Selection of Best Home Loans

                                          

Any person who is deciding to have own home with a home loan must be known to these terminologies, i.e. loan agreement and home loan financier. If the person is familiar and knows about these financial terms, it helps the customer a lot while making a deal for a home loan. The person must know about some of the financial terminologies that are discussed below before the person applies for any of the loans.

The person should always remember that the banks, housing finance companies and financial institutions provide the loan amount only up to 85% of the cost of the home/flat/house/plot/property. The remaining 15% of the value of the home is paid by the customer itself in the form of down payment. This is so, because the banks ensure that the person has an interest in purchasing the property.

Once the customer has decided for opting for the home loan, the next thing customer has to decide the interest rate, i.e. the person will go for fixed interest rate or the floating interest rate. The fixed interest rate means that the interest rate remains fixed throughout the loan tenure, and the floating interest rate means that the interest rate changes with the change in market rates.

It impacts the person monthly installment, i.e. EMI, which is comprised of, the principal and interest amount of the loan. The person, therefore, prefer to take fixed interest rate, as the customer fear; if the interest rate rises in the near future it will increase their loan tenure or loan EMI, but in fixed interest rate it will remain fixed throughout the loan tenure. However, in reality the scenario is totally different; the banks, housing finance companies and financial institutions always give the clause in fixed interest rate home loan, i.e. they can revise the fixed interest rate any time during the loan tenure, might it be after 2 years or 5 years. Therefore, one should always think before while choosing the interest rate as it will ultimately put the burden on the person’s monthly budget.

For having the best deal for a home loan; the person should do exhaustive searching on the home loan through Internet. The person can visit various websites of the home loan providers and can compare them on the basis of the loan interest rate, the loan amount, the loan tenure, the processing fee and the additional charges.