Sunday, September 19, 2021

Home loan transfer: Factors to consider before shifting lenders

A home loan is a secured loan that requires the borrower to keep the guarantee with the lender. However, in the case of the home loan is the home itself for which the loan is borrowed. In case a person fails to repay the home loan on time, the lender has the right to acquire the property. The people who are eligible for applying for a home loan are 21 to 65 years old. The maximum loan term is generally capped at 30 years. Well, there is a difference between a home loan and a housing loan which is: A home loan is designed specifically for financing the purchase or construction of a residential property. Learn more about home loan balance transfer through this blog.

A mortgage loan, on the other hand, has no restriction on the usage of the alamo tunt. There are 8 types of home loans we can go for, and they are as follows: A 30-year fixed-rate mortgage, 15-year fixed-rate mortgage, an Adjustable-rate mortgage, FHA mortgage, VA mortgage, USDA mortgage, Jumbo mortgage, Interest-on mortgage.

An increasing number of borrowers are switching their home loans to more cost-effective lenders. People usually switch lenders to get better interest rates on their loans and get the benefit of lower or no prepayment penalties and processing fees and other goodies. To transfer a home loan from one bank to another, we can obtain all the necessary documents required to transfer your home loan balance from your current lender. Obtain a consent letter from the existing bank along with the outstanding loan amount. Providing these documents to the new bank that you wish to transfer the housing loan balance can help. Various banks provide the benefit of home loan transfer. Based on the comparison of home loan interest rates of all banks in India, SBI, HDFC, ICICI Bank, Axis Bank, Kotak Bank are the best banks to transfer your loan. Using the PMAY, you can also transfer your entire outstanding home loan balance from an existing bank to another bank depending on lower rates of interest. However, before doing so, it is recommended for you to approach the

existing lender and request a lower interest rate.

There are various benefits of a home loan transfer. They are as follows. The main benefit is saving on interest costs. After you have availed a home loan, if the lending rates in the economy fall and your existing lender is still charging you a high-interest rate, you can support your loan and choose a lender who offers a low-interest rate. This will help you save on interest costs in the longer run. Later if you realize that a floating interest rate mortgage would have been better, you can change the type of interest charged on your loan by refinancing it. Once you have accepted your home loan agreement, you cannot change the tenure of the loan. The tenure of the loan can be changed when you refinance your mortgage. If your financial position has changed for the better, you can choose to reduce the tenure. Apart from the interest rate, many other features must be considered when you avail of a home loan. Most people refinance their home loans to get better features such as nil foreclosure fee, lower penalties, or better customer service.

Also, there are a few factors that you must consider before you transfer your mortgage.

  1. The new lender’s credibility
  2. The remaining tenure on your existing loan
  3. Cost of refinancing your loan
  4. Terms and conditions of the new loan.

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