housing finance

Balance Transfer and Housing Finance

By Addi Vardhaman

The Indian immovable property has come of ages. Consumer is the King now and gone are the days of monopolistic behavior. And definitely, if you are the one with sound financial background and impeccable credit record you can strike a better deal with the banks in terms of interest rates and other payment conditions and purchase your dream property without any hassle.

Interestingly, the same criteria is equally applicable on those, as well, who have already availed a loan from a bank. Near about all the major public and private sector banks in the Indian banking system are now offering the option of ‘Balance Transfer’ on housing finance. Often, banks in the housing finance sector tend to increase the interest rates when the benchmark interest rates increase. But, such alacrity is not shown by them in decreasing rates whether the Repo rate comes down or not. In such circumstances, balance transfer help the customer a lot. He can replace the higher rate loan and avail a lower rate one by paying some extra charges. These charges are lower compared to the total payable interest.

What is Balance Transfer and how is it relevant in the housing finance?

There are times you find that the interest rate on your home loan is at a higher level. Take an example. Suppose you were paying at the rate of 10.5 per cent per annum. This rate is quite high in comparison of 9 per cent offered by some other bank. In such cases balance transfer of housing finance comes into rescue. You can trigger off the balance transfer option with your existing bank or lending institution, under which the unpaid portion of your housing finance would get transferred to your desired bank, thereby taking benefit of the difference in the housing loan interest rate.

Things to take care of at the time of balance transfer:

* Tenure of loan amount should be taken care: Ideally, you should consider taking the balance transfer option when the remaining part of your payment period is more than 5-years and in such a case you have the time for speculative gains. There is no profit in transferring the home loan from one bank to another if you end up paying early payment penalty and other processing charges even more than the difference of housing loan interest rate and the amount you had to pay towards interest in the normal condition.

* Early Payment Charges associated with the housing finance scheme: Banks like State Bank of India, IDBI and ICICI offer benefits like exemption of the early payment charges to your existing bank if you transfer the balance. So you must confirm the same with the new lending institution that are they ready to deal with this matter. Otherwise, the deal is not profitable.

* Additional charges involved with the loan amount: You must confirm that the desired amount for your home purchase loan is perfectly at par with the balance you had in your previous bank. It may be the case that that your new bank pays all early payment penalties and processing charges on your behalf and later add the amount to the principal of your housing loan. So, in such case your total owing remain the same and the transfer is not profitable. In this situation, you have to suffer the impact of debt compounding, which does not favour you in the long run.

Seeking balance transfer as a burden reduction option needs the similar degree of caution and study that you undertake while taking housing finance. Definitely with balance transfer, you can save a considerable amount of interest charges under this option once you strike the right chord!

About The Author: For more information about home loans. Please visit our website: http://www.paisawaisa.com/

Article Source: http://EzineArticles.com/?expert=Addi_Vardhaman
http://EzineArticles.com/?Balance-Transfer-and-Housing-Finance&id=1337511

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housing finance

Housing Finance – A Revolution In The Market

By Aditya Jaiswal

The housing finance in India is growing at a fast pace. The home loans or housing finance is a huge industry in itself. A lot many people are trusting home loans in India to purchase property. This is the best and affordable way of realizing your dream of buying your own home. These finance options are open for all salaried individuals, self-employed individuals, partnerships, and even NRIs. The home loan can be availed for various purposes like loan for building a house, purchasing a piece of land, buying an existing house or apartment, and renovating a house.

The home loan can be availed for all kinds of properties like residential, commercial, and industrial. The loans for industrial and commercial property are of huge size and are normally taken by organizations. People also take home loan for the purpose of investment in property rather than for their own use. These properties are later on sold in the market at good profit.

Apart from a normal housing loan one can also get home equity loan, a unique concept wherein the borrower can mortgage his existing property to avail loan that can be used for any kind of purpose as desired by the buyer. Generally, people avail home equity loan facility for the purpose of marriage, education, or to meet medical expenses. The maximum loan amount that banks normally offer is about 60% to 65% of the market value of the property. The home equity loan is generally provided on difference amount of the actual market value of the property and the amount the customer already owes to the bank. At one time this concept of borrowing was not much known but today it has become quite popular as the funds can be put in use as per the wish of the customer.

The housing finance companies follow a very strict process while providing loans to the customers. The loans are disbursed in line with the credit policies of the bank and financial institution. As part of their process, banks verify the credit history of the borrower to ensure safety of the funds. It is important to check whether the customer is a defaulter with some other financial organization or if he has misused any of the banking products.

The housing finance sector is being promoted in a big way in India. The banks and financial institutions are offering home loans at attractive terms. Even people find it advantageous to purchase property by availing home loan as they get tax benefits and easy repayment options. This is the best way to buy a property especially if you belong to service class. The banks and housing finance companies are also being professionally managed. They are always ready to assist the customers regarding queries related to the prevailing rate on interest, the various tenures available for repayment, conditions or the eligibility criteria for various categories of customers, the documentation required etc. It will not be wrong to say that housing finance in India has caused a revolution in the market and has motivated purchase of properties.

Aditya Jaiswal, advisor of home loans for NRIs, is an associated editor with the site: www.guide2homeloan.com The site is an online portal to provide home loan advice on home loans in India including types of home loans in India, home loan interest rates in India provided by home loan providers in India.

Article Source: http://EzineArticles.com/?expert=Aditya_Jaiswal
http://EzineArticles.com/?Housing-Finance—A-Revolution-In-The-Market&id=397589

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housing finance

Minnesota First Time Buyers Financing Options

Minnesota First time buyers financing options include- FHA, VA, conventional, special down payment assistance and bond funding

First time homebuyers in Minnesota may feel a little scared about whether or not they will be able to obtain the loan they need in order to secure the home of their dreams. Often times first time homebuyers are young couples who do not yet have a lot of work or credit history to look back upon. This makes them a risk according to many lenders, which can make it somewhat difficult for people to find the loans that they need to get the home they have been eyeing up for some time now. Since there are so many roadblocks up against first time homebuyers, one may think that they just do not stand a chance.

Luckily though there are a lot of program out there designed specifically with the first time homebuyers in mind. Such programs would include that of FHA, VA, special down payment assistance, bond funding, and conventional loans. These finance options are out there for the taking but you will want to take a special look at each one of them in order to make sure that you are going with the one that is right for you. Minnesota housing finance is something that scares a lot of people who have gone through the process before. As long as you are working with skilled professionals there should be no reason to be worried.

Those you are working with will know that you are a Minnesota first time homebuyer. You are looking at a vast majority of Twin cities homes and it is important to make sure that you are getting the best for your money. That is why some of the programs require the Minnesota home to pass their own criteria of home inspection qualifications. This is to protect the best interest of not just the lender but the customer as well. Since first time home buyers are new to the whole thing, they may need that little bit of extra guidance to make sure that everything goes smooth and that they are not ripped off.

The Minnesota housing finance that is the least popular for those who are first time homebuyers is that of the conventional loan. There are a lot of hoops to jump through and a lot of qualifications a buyer must meet in order to make the cut. Although conventional loans can offer great rates, that is not the only type of loan out there that can give you incredible rates. Since FHA and VA loans are designed to give people a break, they will generally offer incredible interest rates as this will help to make sure that the new buyers will have very little problems making their mortgage payments. In some cases, the interest rates given through an FHA or VA loan is better then what could be offered through a conventional loan.

If you are ready to buy a home but feel as though you do not have a lot of money for a down payment you could find help with that. Some people may not have any money at all for a down payment but that does not mean that there is not assistance for that out there. The government wants people to be homeowners and that is probably a big part of the reason as to why there are so many programs out there is help give down payment money. Generally, the down payment money is given from the program or the sellers of the property. It raises the principal balance by that amount of money. All it means is that you are paying the down payment money throughout the course of the loan instead of upfront, as this is the easiest way to look at it.

Bond money can also be an option if you qualify. There is a lot of money set aside out there for people who need help with down payment money. The key though is to make sure that you are really looking over all of your options in order to make sure that you are making the right decision for you and your family. There is nothing wrong with wanting to come up with the down payment money on your own, but if there is assistance out there for a Minnesota first time homebuyer then you should look into it. You could always use the money you have set aside for moving expenses or to do some minor repairs to the home once it is yours.

Make sure that you contact a realtor as soon as possible in order to review all of your options. As long as you are going with an experienced realtor, he or she should have no problem walking you through the process and providing you with all of the money you would need to check into a FHA or VA loan. Even if you qualify for the first one you look into, make sure that you are exploring all of your options. By not doing so, you could very well find yourself wasting hundreds, or even thousands, of dollars that you could have otherwise saved and put towards something else.

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