With the pandemic rising for the last two years, a lot of things are put to hold. Buying your dream home might be one. The winds have now changed and the markets are again recovering from the loss they suffered in the past two years. So, if you want to buy a home now, consider taking a home loan. Let us take a look at the article below to understand if borrowing home loans might be a good option right now!
Why Borrow a Home Loan Now?
It is believed that a current market is a good option and the gains of it might be very attractive. The funding that is available might be sizable and also your family home can easily be encompassed. Let us know the reasons
Home Loans are Customizable
A few years back it was impossible to imagine that home loans are customizable and can be availed as per your financial needs and requirements. Home loans were always seen as a commitment that is long-term and financially draining. This is no longer the case in the market as the competitors are many and the options available are also numerous.
The lenders make an effort to provide you with a tailor-made plan for buying your house. They consider your income sources, your current financial obligations, and a lot of other factors. The borrowers generally get ticket sizes that fit their repayment capacity and do not stretch other finances.
A lot of provisions are available for buying properties in rural areas or tier 2 and tier 3 regions.
Attractive Interest Rates
You can benefit from the low-interest rates if you apply for home loans now. Lenders are facing tough competition in providing low and attractive interest rates to borrowers. Thus, the interest rates are lower in the market today.
The interest rates pertaining to the market today are as low as 7% and are a complete contrast to the rates that were trending before the pandemic. Then, the interest rates had almost reached a whopping 12% per annum.
Since all lenders have an eligibility requirement that is different from the others, borrowers can take advantage of this competitive situation and apply for home loans. Most lenders will provide an easy way out and less demanding eligibility criteria since the competition in the market are huge between lenders. The lenders will evaluate only the basic criteria such as
- The credit score and the credit history of the borrower
- The repayment capacity of the borrower
- The income sources and their stability
- The work experience of the borrower
As the festive season is about to begin, lenders will have cutthroat competition amongst themselves. These lenders will provide the borrowers with huge discounts and offer to meet their targets. The offers might include a concession in the processing fees and the ancillary fees that are associated with the loan. The other benefits might include a moratorium period or interest subsidies.
On auspicious occasions, these offers may get lucrative for the borrowers. Thus it is advisable to keep checking offers on home loans if you wish to buy your dream house.
Some Important Points to be Considered While Taking Home Loans
Interest Rates are Negotiable
Whichever type of loan is chosen and no matter at what time, the interest rates are negotiable with the bank. It is true that the bank will always have the upper hand, but you can always ask for a good deal especially if you are an old customer and have a long-term relationship with the bank.
Switching Lenders Is Possible
A lot of people think that if they have borrowed a loan from one lender, they have to stick with the same lender for the entire term of the loan. This is not the case and switching lenders is always possible while you take a home loan. In this case, a lot of banks and lenders do not have a prepayment penalty and the processing fee is the only cost that one has to bear.
Longer The Tenure, The Costlier The Home loans
The RBI has been hinting at an increase in the base rates. For home loans, this means an increase in the floating interest rate of the loan. A lot of buyers will not be able to pay the hike in the EMI and will want to increase the period of the home loan. Increasing the period of the loan might be a temporary respite in the situation, but the payment made towards the loan will be more than earlier.
If you go by the current market scenario and the saying that the best time to start is now, you can avail of a home loan with decent benefits and begin buying your dream home. Home loans will help you save substantially and the benefits may be accrued for a long period of time. However before you take a home loan, determine your home loan eligibility. Go to home loan services and know the offers provided by various lenders. Then, choose the lender most suited for you.