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Dec 8

Retail Home Loan Borrowers Can Consider Fixed or Floating Rates

A home is the most precious thing for all class of families, where we create many sweet, sour, memories with our parents, children and siblings. . A home is that placed where we feel most protected, safe and relaxed and enjoy our past memories and create new memories. A home is the most important thing for every individual and family.

Buy Your Home with Easy Home Loans

In the past, buying a house was not that easy for the salaried class or middle class families. But there is another easy and suitable option for many people to own a 1BHK, 2BHK, 3BHK, penthouse or a flat/ apartment in an affordable housing cooperative society and that is with the help of a housing loan provided on certain terms and conditions.

Staying in a rented house for long is not at all recommended. Every individual or family should strive to own a house at a convenient location within his/ her budget. Today, there are many private sector, public sector and non-banking financial companies available in the market ready to help you buy your dream house on easy terms. One can easily apply for a home loan online 24×7 or alternatively visit the physical branch or NBFC office to borrow home loan on fixed or floating rate of interest as per the convenience. Home loans are offered at comparatively low interest rates and with a long tenor and repayment structured as equated monthly instalments (EMI).

Cut in Repo Rate – the Best Time to Apply Home Loan

Obtaining a loan today is not a big challenge for a regular earning individual. A person can easily raise fund as an independent applicant or can also apply with his working spouse as joint applicant. There are a number of the benefits you can enjoy on raising a home loan along-with getting rid of paying monthly rental. Moreover, there has been repeated cut in the repo rate resulting in the decrease of interest rate charged on home loans. It is the best time for the people to grab the opportunity and rush to apply home loan on fixed rate of interest in-stead of staying on rent.

A buyer can alternatively also prefer to apply home loan online on floating interest rate round the clock. Our Indian government has also taken the initiative to provide support to the citizen/ family on buying an apartment/ house through various schemes aimed at promoting affordable housing so that every family can buy their own place of residence.

The Key Home Loan Benefits on Fixed or Floating Interest Rates are:

TAX benefits:

Today there are several banks providing home loans with easy EMIs and at a low interest for the common families. If you purchase your own home the bank will completely help and support you in buying your dream home.  According to the Income Tax Act, a home loan borrow can take the benefit available in the form of various deductions (like interest serviced and principal repaid on home loan upto a certain threshold).

Improve Your Credit worthiness:

Regular and timely payment of home loan EMIs helps you gain the advantage of good banking, credit score and increases your credit worthiness in the future also.

Save for Contingencies

It is too much important for every class of family to save their extra money in their hand so that it is easily available in the emergency situations. It is never a good idea to spend all yours saving in one thing.

Apartment/ house generally increase in value over time. Once the loan outstanding comes down (due to regular repayment over time) reducing your loan to value ratio, you would always have the scope to obtain top-up loan or increased limit against the same property (for any permitted financial requirement) thereby providing you with much needed financial flexibility.

Having your own home typically increase your value in society, build equity bring respect, and provide a nest egg for the future. Your costs are more stable than renting because they’re really ideally based on fixed rate mortgage. Be the owner of your own house and creates a tie knot with your community.  Of coure raising home loan on fixed or floating rate is an ideal option and decision to fulfil the dream of owning a house. Each has its own importance.

Fixed or Floating Interest Rates

When it comes to the question of deciding whether to get the home loan under floating interest rate or fixed interest rate, one has to consider various factors like the outlook with respect to future interest rate scenario. If one feels that the interest rate would increase in future, then it would be advisable to obtain a fixed rate home loan. Also, if the market interest rate subsequently comes down (while his/ her loan is locked at higher interest rate) then he/ she would have the option to shift the loan to another lender who might be offering lower interest rate at that time. Thus it is always advisable to monitor the prevailing interest rate of the home loan and compare with available offers from other lenders. Contrary to the perception, it is not difficult to shift the home loan from one lender to another. However, in most cases the fixed rate of interest offered by a lender is higher (considering the risk that a lender carries for probable increase in market interest rate) compared to floating rate loan. If the differential (in interest rate between fixed rate and floating rate loans) is too substantial, one may take a view that it is better to obtain floating rate loan which is more easily sanctioned by the lenders now-a-days.

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