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Home loan is one of the biggest financial decision in our lives.Before you choose your Bank get information on current interest rates from all Banks. Get to know how much each bank can give you i.e. Eligibility from Govt Banks and Private Banks.Fixed rate or Floating rate /Prepay or Balance transfer we try to make your journey simple by giving your unbiased information.To find the lender for 20 years term go through the fine print and save for years to come.A perfect Home loan is loan which gives you lowest rates throughout the tenure, has part payment options and allows you to balance transfer if you wish to
The Home loan rates will change in 20 years so thinking to start a loan at a lower rate has no relevance.
The right time to take a Home loan is when:
- The Property you intend to buy is good and cannot be missed or it is expected that the price of property will rise.
- The Emi that you have to pay per month is above your monthly expense budgets etc.
Home Loan Latest Updates as on 2 june 2015
Effect on Home Loans: At the starting of the year RBI repo rate was at 8%. Now, Rbi has reduced the repo rate 3 times in past 5 months. In january, repo rate was cut by 25 base points, In March it was further reduced by 25 base points to 7.5% and now it has been cut to 7.25%. So the repo rate has reduced by 0.75% in this year thus, far. However, home loan interest rates have been changed only once. In April, all major Home loan banks and corporations reduced their interest rates from 10.1%-10.25% to 9.85%-10.1%. We believe, due to RBI's monetary policies bank's hands are a bit forced to reduce interest rates and home loan interest rates will fall by atleast 0.25% in the immediate future.
The first step involved in the process is to find your property which is followed by the verification of property documents, post that the documents are examined & simultaneously you can start searching for the lender who can offer the BEST Home Loan Deal after checking your eligibility criteria.
Know the Home Loan Eligibility: Banks offer the loan amount based on your Income and the property value .They will give you max amount in which your emi of Home loan and others loans is 50-60% of your income.
Other factor is that value of property.
Select the Best Home Loan after evaluation: Comparing home loan interest rates is the primary feature in the home loan selection, however other fees & charges like Application fees, processing fees, legal charges should not be neglected when comparing various loan offers. To check the interest rates & other charges incurred by various banks, Deal4Loans has brought in a Home Loan Comparison Chart across various Banks.Banks offer Fixed and Floating rates in Home loans.
Most customers choose Floating rates
Applying for the Loan : After you have selected your lender, you have to fill in the application form wherein the lender requires complete information about your financial assets & liabilities; other personal & professional details together with the property details & its costs.
Documentation & Verification Process: You are required to submit the necessary documents to the bank which will be verified together with the details in the application.
Credit & default check: Bank checks out the borrower’s loan eligibility (through repayment capacity) & the amount of loan is confirmed. The borrower’s repayment capacity is reached which is based on the income, salary, age, experience & nature of business etc. Bank also checks credit history through the Cibil Score which plays a critical role in deciding & approving your loan application. Low Credit Score implies that the bank upfront rejects your application on the basis of earlier credit defaults; on the other hand high credit score gives a green signal to your application.
Bank sanctions Loan & Offer letter to the borrower: After the credit appraisal of the borrower bank decides the final amount & sanctions the loan, the bank further sends an offer letter to the borrower which constitutes the details like rate of interest, loan tenure & repayment options etc.
Acceptance Copy to the Bank: The borrower needs to send an acceptance copy to the bank after the borrower agrees with the terms & conditions in the offer letter.
Bank checks the legal documents: The bank further asks the legal documents of property from the borrower to check its authenticity so as to keep them as a security for the loan amount given. The next step involved is the valuation of the property by the bank which determines the loan amount sanctioned by the bank.
Signing of agreement & the loan disbursal: The borrower signs the loan agreement & the bank disburses the loan amount.
- Income
- Age Proof
- Address Proof
- Income Proof of the applicant & co-applicant
- Last 6 months bank A/C statement
- Passport size photograph of the applicant & co-applicant
- Income
- Qualifications
- Age
- Spouse’s income
- No. of dependants
- Stability and continuity of occupation
- Assets/LiabilitiesM.
- Savings history.
The most important concern of banks in determining your loan eligibility is that whether or not you are contentedly able to pay off the amount you borrow.
The Second factor is the value of the Property
Banks are okay to fund 75-85% of property value but with the condition that you have income capacity that you can pay its Emi each month.
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