Strategies For Deciding on Housing Finance Business


It is typically mentioned that obtaining a dream property requires enormous expenditure for most of the investors. Some folks commit a lengthy period of time, garnering their savings to fulfil this dream, though other people opt to take a loan (credit) to fulfill this dream.

Having carried out your self assessment about the repayment capacity, place of your dream house, amenities and other fancies that you would like your dream property to have. It’s time for some really serious exercise of picking your HFC.

Picking a HFC requires extreme care and appropriate consideration, and as a result following the under-pointed out pointer will make this physical exercise less difficult. Past record of such institutions ought to be adequately checked as it will be a lengthy term connection in between you and institution. Ensure that the complete process does not end up becoming a entire day headache or nightmare for you, thus prudent actions while deciding upon the financer.

1. Rate of interest

This is exactly where it all starts. Though the price of interest presented by most HFCs is much more or less the very same on paper, some degree of bargaining in most situations, leads to a lowering of prices by as considerably as .25 to .50 percentage points. More so if your profile occurs to match the requirement of the HFC. The lowering of interest rate has a considerable effect over the extended term despite the fact that the distinction is not so noticeable more than the near term. For instance, a .50% interest price ‘concession’ on an Rs 1,000, 000 loans over 20-year tenure will cut down your liability by upto Rs 72,000. But care requires to be taken to guarantee that the distinction is not becoming offset elsewhere by the HFC under the guise of other ‘charges’.

1 should also be cautious about teaser price present, as they are often truly teasing. They benefit you for a quick-term – say couple of years (till the fixed interest rate tenure), but later as floating price begins applying they dig a bigger hole on your wallet.

2. Calculation of the exact property loan amount

Right here, HFCs differ in their calculation of the loan quantity to be disbursed. Some HFCs calculate the amount to be disbursed on the basis of, say, the gross salary although some HFCs calculate it on the net salary. may well make a distinction to folks as the loan quantity and the EMI will vary across HFCs. One particular requirements to appear into this and get a comparative analysis performed across HFCs, to comprehend which HFC offers the finest deal. Also a single need to check irrespective of whether the HFC is offering pre-EMI and tranche primarily based EMI repayment selection. This will aid a single whilst taking loan for an under building house, as this gives them an choice to pay interest only on the portion of the loan disbursed or to select the instalments they wish to pay, till the time the property is ready for possession.

three. Right after-sales service

And you believed following-sales service was synonymous only with consumer durables! No – it applies to practically almost everything, and so also applies to HFCs. In fact, it is extremely essential while picking out an HFC. An HFC can differentiate itself with superb soon after sales. Take the example of post-dated cheques (PDCs). It is general practice to give 36 PDCs during the time the loan is disbursed. It is following 36 months are over that immediately after-sales will play a role. How diligent are the HFC’s adhere to-ups? Are they prompt? Are reminders timely? Additionally, through the monetary year-end, the HFC need to be punctual in giving the borrower interest paid certificate (components of interest and principal amount paid in the financial year) so that he can file the vital documents for availing tax positive aspects (under section 24b and 80C of the Income Tax Act) on home loans.

four. National presence

The HFC must be present across the nation or at least have branches in all major metros and towns. This delivers an person an much easier accessibility. This assumes significance if the present job of an individual is of a transferable nature (e.g. bank job, defence personnel) or if he requirements to make lengthy and frequent outstation visits (e.g. consultants, businessmen). The individual should not be place via the hassle of couriering his cheques to the property branch each and every time or contacting the household branch, each time he has a difficulty or a query. So it helps if the HFC is properly networked across the country.

five. Prepayment / Foreclosure rewards

For many individuals, this plays a significant part in their decision to go in for a certain HFC. For example, numerous salaried people know for a reality that their salaries would be revised every single year. This means that they can pay a greater EMI going forward. Some of these men and women also know that they would be finding a bonus, which they can utilise to pay off their residence loan (either totally or partly). Some banks do not charge men and women for producing a prepayment / foreclosing their account. Definitely such HFCs need to get preference more than other HFCs that do levy a prepayment charge.

6. Do your homework

A lot of individuals have a tendency to buy into ‘brands’ rather than going for what suits them most effective. It is not about how major the brand is it is much more about whether that brand suits your requirements and satisfies your criteria. Make a list of your needs initial and then household in on an HFC. Speak to people who have currently taken a loan from a distinct HFC and get their feedback.

Other aspects like documentation, processing fees, document storage facilities and time taken for processing the loan must also be viewed as. For example, men and women do not like it if the documentation is an irksome method or if the processing costs are exorbitant.

Apart from this, study all the terms and conditions meticulously and do not forget to take an expert assistance. Hence, as an alternative of reading on the lucrative provides of the company, it is crucial to study and realize the technical elements of the presents. So if you want to be in a win-win proposition whilst dealing with the Housing Finance Enterprise, the onus is on reading the fine print in the loan document and seeing by means of the maze of fascinating provides.

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