Feb 23, 2005 05:59 PM
7779 Views
(Updated Feb 25, 2005 02:02 AM)
WANT TO GET AASHIYANA-
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DO DIWANE SHEHER MEIN, Ratmein ya Dopahar mein, Aabudana Dhundhte Hain, Aashiyana Dhundhate Hain................. a beautiful song from ''Gharonda'', many of you must have seen this movie and song picturised on Amol Palekar and Zareena Wahab. What a appropriate song when a newly married couple starts hunting for their dream home. Very few of us must have been lucky enough to get their dream homes with quite ease i.e. in heritance. Many of us take thorough search through their city or town as the case may be, mind you, me not talking about google or yahoo search for some keyword sitting on comfortable chair under fan.
PERSONALLY, I have gone through all such jhanzat ( zamela i.e. exercise ) in my earlier days of marriage. Though ours was big old wada with only few cousins.living in it and no tenants, we understood the need to get home loan from Bank as nobody living there showed interest in renovating that old place but we were lucky enough to do job in Bank to get concessional rate of interest. Isn't it great?
NOW AT THIS JUNCTURE, we were searching for new apartment for my newly married cousin who is not serving in bank to get concessional rates. So, getting finance was different thing. Now a days, private banks follow the employees right from their appointment for opening various accounts, credit/debit cards and then home loans, car loans etc. We DID A LOT OF HOMEWORK once again to get known to the present scenario. Things have changed and we thought it must to check it out. So, here are few precautionary points reg. home loans found at PERSONALFN DOT COM who provide tips, news, latest things on various aspects of personal finance as the name suggests. I am impressed with this site..
FIVE IMP.POINTS TO PICK CORRECT HOME LOAN-
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The housing loan market at present is going through a phase where you need to do lot's of market research before opting for a loan. You should never get carried away by advertisements that offer you loans at 7 per cent or 7.75 per cent interest rate. The other terms and conditions like special interest rates for fixed tenure, hidden terms and conditions often come later. However, you should go for lowest EMI (equated monthly installments).
- Collect information on interest rates-
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Get interest rate information from more than one source, and get the same information from each so you can compare the offers. You will also have to choose between a 10-year or 20-year loan. In the long run, you'll be paying more for your house because you will be making more interest payments. Naturally, with a 10-year loan, the EMI will be higher but the interest rate lower; thus you'll pay less for your house because it will be paid off in a shorter period of time. The other factors like fixed or floating interest rate loan can also affect your total outflows. Try for best rates. If there is employer-lender tie-ups for discount rates then well and good. Also check out deals at property fairs and loan melas.
- Find about processing fees-
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Next, find out about processing fees, admn.charges and the amount of loan. Get from each lender a written statement of all fees connected to the loan. Then, ask each to reduce one or more of the fees. Negotiate with the other lenders..
- Get a pre-approval letter-
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This gives you substantial support. Sellers immediately see you as a serious buyer. Not only will you know the exact price range you can afford, you'll be able to negotiate a better deal and move faster when you see a house you like. For pre-approval, you will have to furnish the necessary income documents to the bank. After verification and preliminary checks, the bank issues a letter agreeing to finance you a certain amount. This letter will help you bargain with builders or sellers. Sellers too are more comfortable once they know you are serious about buying. Pre-approval also saves time since the primary paperwork is already covered.
- Negotiate your loan -
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Most lenders will reduce their printed rates for customers with a good credit record, so don't be shy about bargaining. A bargain deal will easily fetch a home loan at around 0.25-0.5 per cent lower than official rates. Home loan rates depend on a number of factors like general economic conditions, liquidity position in the money markets and the lender's cost of funds. At any point in time, these factors remaining unchanged, you will always get a better deal if you negotiate. Once you get what you think are the best terms possible, ask for a written rate lock. It will include the interest rate, how long the lock-in will last. A lock-in protects you from a rate increase if rates go up during the time your loan is being processed.
- Don't get yourself fooled-
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Don't play along with a sales person who asks you to include false information on your home loan application to get quick approval. Also don't get pressured into borrowing more money than you need or can afford.
I found this site very useful for my cousin's home loan. Further it gives you many more useful tips on latest things, comparative study-charts for stocks, mutual funds and on taxation and they provide you newsletter too. It's upto you how you get benefit out of them. Visit this site if you haven't yet.
© Mrs.Medha.
