The financial schemes in India have come off age especially over the last 10 years. Housing loans have been segregated into host of other products such as:
- House construction loan
- Home top up loan
- Fixed home equity credit facility
- Construction cum home loans
- Loan against property
- Reverse mortgage, etc.
The complete details on home loan and related products is readily available on housing.com, the only web portal in the country that features more than 1.6 million verified realty assets. The users can get even the minutest of information associated with housing loan through this site – https://housing.com/in/home-loans
The ‘Home Loans Guide’ from housing.com is an ideal starting point both for an youngster who is looking to put the first step on property ladder or an experienced home buyer who regularly deals in realty. While, the new comer will get to know the basics of home loan before initiating the process, the experienced person can easily identify the loop holes and can plug them off with the help of this comprehensive guide from housing.com. Here are some important things to know in home loan which are also well documented in this guide from housing.
Down payment amount
Down payment or the margin money is the amount that needs to be paid upfront by purchaser before applying for home loans. This amount is 10% of the total cost of home for properties worth 30 lakh rupees or lesser and goes up to 30% for homes costing above 75 lakh rupees. Most banks or housing finance companies do not count the payment made towards stamp duty, registration, service tax and vat when calculating cost of home and hence customers need to add this amount to down payment money when making the upfront payment. It must also be noted that lenders only sanction loan on agreement value. Hence, if the buyer has made any cash payments towards home purchase those will not be accounted for, when calculating the loan amount.
Equated monthly installment (EMI)
EMI is the fixed amount that needs to be paid to bank each month towards the repayment of loan amount. It is made of two components – principal and interest money. Every month the part of money from EMI is adjusted towards principal and the rest of it is charged as interest. In general, the reducing rate home loans are best as in these products the outstanding principal is reduced by each EMI and the interest is charged only on the outstanding balance.
The interest calculation on most home loans is either based on floating or fixed rates. In floating rate home loans the interest amount changes from time to time and it can increase or decrease depending on the macro economic conditions. On the other hand the interest rates on fixed rate loan products are either fixed for the entire duration of the loan or a part of it depending upon the selected option. The fixed rate home loan products work best in low interest cycle.
The other things that prospective or existing home loan customer need to know includes:
- Pre EMI
- Base rate
- Debt to income ratio
- CIBIL score
- Balance transfer
- Pre closure
- Part payment
- Top-up housing loans, etc.
The complete detail on all of these is readily available on housing.com.