Expand your home with a home expansion loan

Spaces can get cramped easily. We live in a materialistic work where we buy new things almost every week, with every trip to the mall. But new stuff requires new space and that is something we cannot afford. Taking housing loans for a new home is not always possible, as they are a long term commitment. There are a lot of reasons why you may need more space. Some of them are, family expansion, inviting parents or in-laws to live you, or just a lack of space. A two bedroom home may have been okay when your kids where toddlers, but when they become teenagers, they will need their own separate rooms and more space. At this time, instead of buying new property, you can simply expand your existing home.

Home finance has created a lot of tools to help you arrange for money for anything related to your home. You can get a home renovations loan in order to expand or redo your space. This loan can still be taken if you have any existing home loans. You can simply avail of this loan through a top-up. When you take this loan as a top up the interest for this loan gets added to your housing loan interest and this way you only have to pay a single EMI.

If you’re in need of a home expansion and are in the process of seeking a loan, then here’s a guide to help you apply.

1.  What can I do with the loan: A home renovation loan can be used for building additional structures on your existing property, like a new floor, a new garden or a garage and redoing the existing property?

2.  How to apply: If your home is under a co-ownership then you should have your loan co-signed by the other owner.

3.  What about the tenure: The tenure for a home renovation loan is very flexible. You can get loan from anywhere between 12 to 360 months.

4.  What documents do I need: Both you and your co-signee would have to give your documentation, including your KYC, salary slips, bank documents, your house agreement, and the expansion layout that you want to undertake, a No Objection Certificate (NOC) by the municipal/building/ housing board. Make sure all your plans are authorised by your local authority.

5.  What about EMIs: If you apply for this loan as a top-up for your home loans, then the EMI will be added to your existing interest rate and you will have to pay only one EMI.

Housing Loans: Refinance House Loans For Home Improvements

Your housing loans can help you get your dream home. You live there for a few years, while still repaying those loans but after a while your dream home isn’t all that your dreamt about. Dreams change, even dreams about you home can change. A house needs improvements at regular intervals, and renovations to keep it looking as good as new. While you’re still paying your housing loan interest, it can be difficult to fund a home renovation.   

An easy way to fund your home improvements is by opting for a home loan balance transfer. Housing loan interest rates are seeing fluctuations lately. This can be attributed to the demonetization drive. With the huge amounts of funds deposited into banks during demonetization in India, banks have reduced their home loan interest rites a great deal.

By opting for home loan balance transfer, you can save on your interest and those savings can be used by you to fund your home renovations. If you’re considering transferring your home loans then here a few things you should know.

1.      Savings is the main reason for transferring home loans. But make sure that you opt for a home loan balance transfer only if the total savings in interest pay-out is substantially higher than the cost incurred while transferring the loan. Usually, the new lender will charge various fees, such as conversion fee, processing fees and administrative charges during the loan transfer.

2.      Transferring your home loan to a new lender is similar to availing a fresh loan, where the new lender will have its own set of terms and conditions. You can use it to re-set your loan EMI and tenure and top up as well. Opt for a home loan transfer if your existing lender is not allowing you to reset the terms and conditions of your loan.

3.      Usually banks and NBFCs provide top up loans to existing borrowers. These are just like personal loans but their interest rates are lower than a separate personal loan. One may require a top up in case of funds required for an emergency or in case of a home loan for renovations. Transfer your loan only if your current provider is not allowing you a top or if the new provider is offering you a better rate.

Transferring your home loan and saving on your housing loan interest can save you the trouble of getting a personal loan.

4 Things That will help you Pay your Home Loan even During Financial Crisis

What happens if a borrower is unable to pay his/her home loan EMI? This is a question that arises in the mind of every home loan seeker, but they’re too afraid to know the answer. Getting a home loan is a big step in everyone’s life. But what if, due an unforeseeable circumstance you find yourself in the middle of a financial crisis and are unable to pay your home loan EMIs? Will you immediately be termed as a loan defaulter? The answer is no. The process of becoming a defaulter is a long one. If a borrower is unable to pay his or her home loan instalment once, due to an unforeseeable expense or a financial emergency, the bank will not immediately term him or her as a defaulter. If you miss one EMI the most a bank can do is send you a reminder mail regarding the same. The bank may also call the borrower to ask about when the payment will be made.

The trouble begins if a Home Loan borrower fails to pay his EMI three months in a row. The bank will send him/her, a number of reminder mails and finally a legal notice. This is when the borrower is termed as a loan defaulter. The term can severely affect one’s CIBIL score, making it difficult for them to borrow in the future. If the borrower fails to respond to all of these notices and calls and still fails to clear his/her dues, the bank will send an officer to their residence to affix a notice on their door or even print a notice in the newspaper. In three months after this, the bank will declare the property as a non-performing asset. In two months after that, the bank will take possession of the property and if the borrower fails to clear his dues in six months the bank will auction it off.

No one wants to be in this situation, but the future is a tricky thing and the only thing you can do to arm yourself for whatever it throws at you is to be prepared. Here’s how you should handle your Home Loan EMIs while going through a financial crisis.

1.  Get in touch with bank and inform them about your problems, they may be able to give you some leeway or at least wave off the late charges on your EMI.

2.   Re-negotiate your loan by increasing the tenure, so you can pay smaller EMIs.

3.  Get home loan insurance in advance, so you don’t need to worry about your loan repayment.  

4.  Spend wisely, keep track of all your expenses, avoid unnecessary expenses and save up to pay your EMIs.

Why you Should Explore the Home Loan Top-Up Option

Buying a home and taking a home loan is not just a onetime expense. A home needs a lot of care and work. When you purchase a home, you also need to purchase with it all that goes into that space, from electronics to furniture, to lights and fixtures and even the tiles and flooring. These are not small expenses and a lot of times your housing loan alone is not sufficient to fulfil them. Even if you can afford all these things the first time, they can be a recurring expense. A home needs repair and renovations as regular intervals for it to remain nice and sturdy. And these expenses are not small either.

A top-up home loan is an exclusive option given to home loan customers that gives them the option of borrowing an amount additional to their existing loan. This money can be used for home improvement, repairs or any other thing you many need it for.

Here’s what you need to know about a home loan top-up.

1.  Eligibility: Top-up loans can be availed only by someone who has an existing housing loan. There are other preconditions too that you need to fulfil before you become eligible for such a loan. Here are some of the criteria that are taken into consideration.

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•    Minimum period: You need to have started repayment of your housing loan and paid interest for a certain period before you are eligible for your home loan. This period may differ from bank to bank.

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•     LTV limit: Loan-to-value (LTV) is the amount you’re allowed to borrow on your existing housing loan. The LTV ratio is fixed at 80-85% of the present value of your property. 

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•        Tenure: The tenure of top-up loan runs concurrently with that of your home loan. So if you have 10 years remaining for your home loan repayment, your top-up loan tenure cannot exceed the remaining term. 

1.  Benefits: The first and foremost benefit of a top-up loan is that you don’t need to manage multiple loans when you get a top-up. The top-up amount is simply added to your existing loan amount and the Top-Up Loan Interest Rates are also paid through a single EMI. There are no restrictions on the usage of this amount. You can use it for whatever you want. Be it renovation work, a new car or for your business or even healthcare.

2.  Best to opt for top-up loan: If upon buying a new home you require more money to purchase additional parking space, do get some renovation work done or to by something for your new home you can opt for a top-up home loan. If after a few years of paying interest on you Housing Loan you have a big expense coming that is related to your business or family, you can opt for a top-up home loan, instead of going for a personal loan.

Avail the benefits of the Pradhan Mantri Awaz Yojana

In a move to ensure that more and more people can fulfil their life-long dreams of owning a home, the Prime Minister of our country announced the Pradhan Mantri Awas Yojana, in the beginning of this year. This scheme is specially designed for the lower and middle income groups. This is an interest subsidy scheme that has been named as 'Credit Linked Subsidy Scheme for Middle Income Groups - CLSS (MIG)'. As per this new subsidy, middle-income groups with incomes in the eligible range will get a subsidy on their interest rate of three to four percent.
This scheme will ensure that more and more people are eligible for home loans and can fulfil their wishes of owning their own homes. Here’s what you need to know about this CLSS scheme and eligibility.

1. People whose incomes fall in the range of 6 lacs to 18 lacs are eligible for this subsidy under the CLSS.
2. People whose housing loans were approved and those whose home loan application was in review since 1^st January 2017 are eligible for this subsidy.
3. Peoples who have an annual income of 12 lacs are eligible for a subsidy of four percent on their home loan of up to 9 lacs. People who have an annual income of 18 lacs are eligible for a subsidy of three percent on a home loan of 12 lacs according to the Prime Ministers’ address on the eve of New Year.

Here are the income slabs for the CLSS eligibity under the Pradhan Mantri Awas Yojana.

1. People with an annual income of Rs.6 lacs and below can avail of loan of Rs.6 lacs at an interest of 6.5% for tenure of 20 years.
2. People with an annual income of Rs.12 lacs and below can avail of loan of Rs.9 lacs at an interest of 4% for tenure of 20 years.
3. People with an annual income of Rs.18lacs and below can avail of loan of Rs.12 lacs at an interest of 3% for tenure of 20 years.

Here’s how this scheme will affect home loan interest rates.

1. The interest subsidy of four per cent under CLSS (MIG) will bring down EMIs of borrowers by Rs. 2,062 per month and Rs. 2,019 per month on a housing loan of Rs 9 lakh and Rs. 12 lakh respectively.
2. The total interest subsidy accrued on these loan amounts will be paid to the borrowers up front in one go. This in turn will reduce the burden of EMI on the user.
3. The tenure of these loans has been specified as 20 years or as preferred by the borrower, whichever is lower.

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Everything you need to know about the Pradhan Mantri Awas Yojana

In his much-awaited address to the nation on the eve of the New Year, the Prime Minister of our country announced the Pradhan Mantri Awas Yojana for the middle-income groups. This is an interest subsidy scheme that has been named as 'Credit Linked Subsidy Scheme for Middle Income Groups - CLSS(MIG)'. As per this new subsidy, middle-income groups with incomes in the eligible range will get a subsidy on their interest rate of three to four percent.

The Pradhan Mantri Awas Yojana is mainly focused on home loans for the middle-income groups. Here’s who is eligible for the subsidy under this scheme:

1. People whose incomes falls in the range of 6 lacs to 18 lacs are eligible for this subsidy under the CLSS.

2. People whose housing loans were approved and those whose home loan application was in review since 1st January 2017 are eligible for this subsidy.

3. Peoples who have an annual income of 12 lacs are eligible for a subsidy of four percent on their home loan of up to 9 lacs. People who have an annual income of 18 lacs are eligible for a subsidy of three percent on a home loan of 12 lacs according to the Prime Ministers’ address on the eve of New Year.

Here’s is how home loan EMIs and interest rates will be affected under the new scheme:

1. The interest subsidy of four per cent under CLSS(MIG) will bring down EMIs of borrowers by Rs 2,062 per month on a housing loan of Rs 9 lakh and interest subsidy of three per cent would lower the EMI by Rs 2,019 on a loan of Rs 12 lakh, if the normal housing loan interest rate is taken as 8.65 per cent.

2. The total interest subsidy accrued on these loan amounts will be paid to the borrowers up front in one go. This in turn will reduce the burden of EMI on the user.

3. The tenure of these home loans has been specified as 20 years or as preferred by the borrower, whichever is lower.

Under the guidelines of this scheme, preference will be given to women. Widows, single working-women, persons belonging to scheduled castes and scheduled tribes, backward classes, differently abled and transgender people will be given more preference.

Non-banking finance companies and micro finance institutions are also recognised under this scheme in order to ensure that maximum number of people can benefit from it.  

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Is Your Home Loan Interest Rates Too High With Existing Lender?

A housing loan helps fund a major portion of the money required to buy a home. A home is a sign of stability for most of us. It is also one of the biggest investments thereby ensuring financial security in the longest run. Availing housing loan also gives you the benefits of saving your taxes. These benefits along with their clauses are guaranteed under section 80 CC, 24, 80 EE of the Income Tax Act.

The principal i.e. the amount your lender lends you, home loan interest rates on that amount and the tenure of the loan are some of the important aspects. These components help you make your decision. With several banking and private financial institutes in the market, you have a wide option of lenders to choose from. With a stiff competition among them, they vie for your attention by offering you the lowest housing loan interest rates and special offers which may include great extent of personalization for you. 

Interest rates may be of two types – fixed rate and floating rate. Fixed interest rate implies that your home loan interest rate remains constant throughout your loan tenure. In the floating type, the interest rate fluctuates in tandem with the market. Fixed interest rates are generally higher compared to floating ones. Floating interest rate is believed to be less expensive as compared to its counterpart. With several financial companies, you have an option to switch between either of the interest rate types. You need to understand your financial situation well before you can decide the type of interest rate that best suits your requirement.

The interest rate offered in the market as of today ranges between 9.50% and 12.50%. There are some companies providing rates as low as 9.15% to 9.30%. You have all the tools available on the internet to help compare between the interest rates offered by the best of companies. Opt for the one that offers you a low interest rate and perfectly accommodates your financial requirements.

You can also make use of other tools like eligibility calculator and EMI calculator that are easily available on the internet for your disposal. These should be conducted as part of primary research once you start hunting for your home loan lender. Your monthly income, age, existing loans, CIBIL score are some of the factors that determine how much loan amount you get. The internet gives you access to a lot of information and details to help get started on procuring your housing loan.

How to apply Home Loans in Mumbai?

Every family in Mumbai wishes to own a home they can call theirs. One of the best ways to do so is apply for a home loan. Here are the top 6 factors that one needs to consider before applying for a housing loan.

1) Obtaining a credit report:

Apply along with your finance organization for your own credit report. Check your credit report totally to identify errors. If need be, use our informatory services on CIBIL report back to get any errors corrected. keep in mind any errors in your credit report will scale back your probabilities of obtaining a decent consumer credit supply. This report is probably going to be accessed by the bank's credit department once you apply for the house loan for inputs on your credit history.

2) Finalize property 1st before you finalize and apply to your loaner.

Lenders reserve their best rates for immediate disbursement customers and thus customers United Nations agency have finalized property get the most effective attainable consumer credit offers. additionally if they need any problems along with your property it'll get highlighted before you incur an excessive amount of effort and prices. Some lenders might not be comfy with you purchasing a plot and self constructing on that. Some lenders won't fund beneath construction property unless the developer is pre-approved with them. heaps of lenders will have problems if the property you're shopping for is over 15-20 years recent.

3) Be ready to lose out on the process fee.

Most corporations charge a non-refundable process fee with the house application which cannot be refunded even though you opt to not use the loan sanction. The lenders incur prices for sanctionative your loan and thus in most cases this is often non refundable. If anybody is promising you that the process fee cheque won't be place in while not your previous approval or that the process fee are refunded if at doing not settle for the sanction the possibilities are that he's lying.

4) Fixed Rates or Rarely Fixed:

Understand the interest rates chargeable to you. The fixed prices quoted are unremarkably fixed just for a amount of twelve to sixty months and can be revised thenceforth. Understand the rates chargeable to you by seeing our elaborated home equity loan comparison table and decide.

5) Create a provision for higher deposit :

Lenders do Associate in Nursing freelance valuation of the property being bought and that they can fund around 80-85% of the valuation quantity as determined by their valuers. These freelance pricers unremarkably are conservative and value the property (especially property bought on resale) much less than what you may actually be paying for it. whereas you'll be able to provoke a second valuation (at your cost off course) you must be ready to allot the distinction between the particular value being paid by you and also the valuation created by the bank over and higher than the 15-20% down payment needed from you.

 So if you're basing your call on any such promise make sure you keep a record of the same.