5 lesser known facts about home loans
Posted by arjun on April 23rd, 2019
Home loans have helped fulfill the dreams of many and continue to do so. They are the perfect finance solutions for those who have thoughts of homeownership on their mind but an insufficient amount of funds in the bank. They provide the loan amounts you need at interest rates you can afford. Therefore, if you’ve got plans to get a home loan, you are definitely headed in the right direction.
However, there are a few things most first time borrowers and people in general do know about housing finance. Considering that complete awareness is a pre-requisite when opting for a home loan, this article will highlight some of these lesser known facts to ensure you make the most of your loan.
1. There are different types of interest rates.
Most borrowers obsess over how high or low their interest rates are. However, not all borrowers are aware of the fact that Apnaloan home loans come with different types of interest rates. They are fixed, floating and semi-fixed. Floating rates are subject to market sentiment and start-off much lower than fixed and semi-fixed rates. Fixed rates stay constant throughout the tenure and are usually on the higher side. Semi-fixed rates adopt fixed characteristics for the initial few years before changing to floating rates.
2. Women get lower rates.
That’s right, women borrowers get preferential rates. This is because they are considered as safe borrowers who usually never default on payments. Keeping this in mind, lenders charge 0.05% less than usual rates. Off the bat, this discount might seem like next to nothing. However, you need to add-up the savings of a 0.05% reduction on loan amounts that are usually in lakhs every month to get a proper understanding of the savings at hand.
3. Even men can enjoy these lower rates.
Don’t feel left out; you can also enjoy the rates women borrowers avail on home loans. All you have to do is add your wife, mother, sister or daughter as co-borrower. This will get you the discount in addition to higher eligibility if they have their own line of income.
4. You can switch lenders at any time.
Not knowing this fact, most borrowers will stay tethered to their lender even if they are providing higher rates than other or if they are providing them poor services. However, you should know that you can switch your lenders at any time. The process is known as balance transfer or refinancing and is applicable on all home loans. It can also open the door to lucrative benefits such as lowered rates & longer tenures!
5. You can get further financing later on.
After a few years, if you need more financing, you can approach your lender and ask for what is known as a top-up. This is amount can be as much as 40 lakhs can be used for whatever needs you have, not just for buying a home or home-related expenses. It’s like a personal loan, only at rates much close to the rates applicable on home loans.
These were some of the lesser known fact about home loans you should know about. We hope these pointers will help you enjoy the most benefits from your housing loan. Good luck and all the best!