Increased Home Loan Interest Rates Have Made People To Do Comparison On Different Banks

The interest rate on everything that we see today has been on an increase largely. The main factor behind the same is that the interest rate has risen to a good number and particularly the home loan interest rates. They vary in the range of 10% to 14% and this call for a good attention to be associated with the right bank. The prime reason for the same is that the repayment of the loan is never easy.

Home loan interest rates is varying in a good range as mentioned above that has made people more alert when they compare the interest rates of different banks.

Summary: The home loan interest rates increase has made people to be more aware on comparing the banks and then be associated with the best of the banks available in the market for the application of home loan.

Home Loan Calculator With Its Presence On Every Bank Website Helps Customers To Avail The Loan

Majority of the people around the world tend to live the dream of buying their own home. Though, there are various home loan schemes such as step up loans, joint home loans etc, but with the increase in the home loan interest rates, it makes them to re think on their decision. That is why it is recommended to make use of the home loan calculator. With the help of the device, you will be able to figure out how much emi you would be paying after availing the loan from a particular bank.

Home loan calculator is available on every bank website these days and one who is internet savvy can easily use the same. Hence go and get the best of the names of banks giving the loan at the lowest possible interest rates.

Summary: Home loan calculator has the ability to make aware on which bank is offering the home loans at the lowest possible interest rate.

Higher Home loan interest rates has forced the people to re-think on their decision to avail the home loan

Home loan is very difficult to avail these days considering the fact the interest rates on the same has been increased to a good number during past couple of years. No one would ever want to be linked to the bank that offers home loan interest rates at a number way higher than the other banks. You need to compare the procedures and policies that each bank follows to give out the home loan. The best way to do the same is to make use of the home loan calculator that is used to figure out which bank is offering the loan at a reasonable rate so that it is easy to repay the same to the bank timely.

Home loan interest rates are varying in the range of 10% to 13% these days and are considered to be a very high number considering the fact that the inflation rate has gone to a good number. With the so many comparator devices available these days, it is easy to figure out the rates of different banks and also one need to find out the processing fees that many vary from bank to bank. The rates at which the banks are offering home loan rates today are way higher than what it was couple of years back. It has made people to re-decision as to whether to avail the new home or not with the help of loan.

Though banks have been following the strict procedures, and they are very flexible in the repayment options for home loans these days, still there is a need to figure out the best of the banks from the list of all present in India. With the people diverting more towards the private banks these days for their flexible policies, the need for the nationalized banks is to be a little flexible as well to attract maximum of the customers by lowering down their home loan interest rates.

Summary: Home loan interest rates have been increased to a good number over past few years thereby making people to re-think on their decision to avail the home loan.

Home Loan Calculator Has Helped People In Determining The bank With Lowest Possible Interest Rate

Banks these days have come up with an ease for the people by making available for them the liberty of home loan calculator. With just sitting at home, people can make the idea as to how much emi they would be paying to the back every month in case they avail the loan from them. one just need to enter in the values of the fields such as how much loan they will be availing from the bank, after how much duration they will return that amount to the bank and most importantly the rate of interest charged by the bank from which they are availing the loan. As per the values filled in into these fields, the device will come back with an emi figure and this would be the amount that would have to be returned back to the bank every month.

Home loan calculator is present on each and every bank’s website these days. The rate of interest on the home loans vary in the range of 10% to 13%. Considering this range, it makes necessary for everyone to deploy the calculators to make people do a quick analysis job as to which bank is offering the best of the lowest possible interest rates. Also the calculators would allow you to keep a track on how banks are adopting the repayment options.

With the best of the devices like home loan calculator present these days on the bank’s website, it has become a real easy task for the people to determine which bank to go for to avail the loan. Also, a difference in few decimals even could make a lot of difference in the end when returning the loan amount thereby making it mandatory for everyone to creep in these devices and see how it could save your money.

Summary: Home Loan Calculator is present on each and every bank’s website these days and has made easy for the people to determine which bank they should go with to avail the loan at the lowest possible interest rate.

Home Loan Interest Rates Vary From bank To Bank Thus Requiring Good Comparison to Be Done

Are you thinking to buy a new home with the help of the home loan? Then you must know that home loan interest rates these days are varying in the range of 10% to 13%. Though this looks like a low number but one should take into account the fact whenever a person looks out to take the home loan that is always in a very good number and not in just thousands. So ultimately the summing up of interest would go up to a good number. Home loan interest rates vary from bank to bank irrespective of whether it is a private or nationalized bank. So get the best bank link with you to get the home loan from.

To get the best Home Loan Interest Rates requires monitoring around different banks to get the loan. Several banks are offering home loans these days, so the need for you is to get the best of the deals from the banks. Home loan interest rates can be determined based on several approaches. One of them could be to make use of Home loan calculator. The device will help you to determine how much emi you would need to pay after availing the loan from the bank.

Home loan interest rates are varying in the range of 10% to 13% thereby making it mandatory for you to dig into deep on the policies running around the home loans.

Summary: Home loan interest rates ought to provide you with a good high number these days thereby making it mandatory to do comparison around different banks. Home loan interest rates needs to be monitored carefully from different banks so that you get linked with the one that is offering the same at the lowest possible interest rates from all the available banks.

Central Bank of India to announce festive season rebate

State owned lender, Central Bank of India has decided to reduce the interest rates on home loans by up to 25 to 50 basis points. This comes after many public sector banks have announced some sort of bonus for the prospective home loans borrowers.

The bank has also waived off the processing fees on these loans. Home loans above Rs. 30 to 75 lakh would now be available for 10.65%; while loans above 75 lakh would cost 10.90%. The bank is offering loans up to Rs. 30 lakh at bank's base rate(10.50%).

The scheme would be effective from September 1.

PNB not to revise interest rates on retail loan; blames cost of funds

Punjab National Bank has released an official statement that it would not be slashing rates on retail advances until the cost of funds decrease.  Bank's retail loans are majorly comprised of home loans and car loans.

Bank's Chairman and MD Mr. KR Kamath added that the bank had already reduced the rates on housing finance before the RBI announced a 1% cut in statutory liquidity ratio (SLR). PNB's home loans are available at 10.75% for loans upto Rs. 75 lakh and 11% for loans above Rs. 75 lakh.

Mr. Kamath further added that the rate at which bank gives credit is a function of the cost of funds, and if the bank further reduces loan rates, it would not be able to attract more depositors.

Reduction in home loans was started by State Bank of India (SBI) which reduced their interest rates soon after the RBI announced SLR cut, which was followed by Central Bank of India which recently cut its rates. The two banks are offering home loans upto Rs. 30 lakh at 10.25% and 10.5% respectively.

Things to remember when buying new or switching existing home loans

Home loan market is very competitive with banks offering various deals for both new borrowers and existing home loan customers. There are various facets involving home loans and the customer must be careful to consider them while making his/her decision.

For prospective home loan borrowers, the most visible and important factor is the interest rates, in most cases the lower the better. The customer can also be lured by the banks by offering special schemes and loans with lower spread. Spread is the difference between the interest rate and borrower's cost of funds.

For existing borrowers, the decision is more on the opportunity cost of switching the home loan. Removal of prepayment penalty of home loans has resulted in easier choice for the customer. Since the customer just has to compare the interest rates and add the conversion/processing charges and evaluate the better of the options. 

Now there will be HOMES for urban poor

Prime Minister Manmohan Singh, on the eve of Independence Day, announces launch of new housing scheme. Under this scheme, home loans amounting less than Rs. 5 lakh will be given relaxation on interest rates. Also, in this scheme banks will provide all possible household benefits to the borrower in next two years.

While addressing the nation, PM said, “To provide housing for our poor brothers and sisters residing in urban areas of our country we will soon launch the Rajiv Housing Loan Scheme.” He added that in next two years government will achieve the target of an account of each household in banks.

Few years back, only 3 out of 10 homes were able to avail the benefits of bank’s services but now more than half of the rural households avail the benefits. Such schemes would be designed so that the pensions, scholarships, wages etc. can be directly transferred to bank accounts.

Battle for home loans market to get fiercer

With State Bank of India reducing its interest rates on home loans and car loans and National Housing Bank following the suit by reducing the refinance rates by up to 1%, the home loans market will see tough competition in coming times.

Refinance is the rate at which banks charge housing finance companies (HFC) for low income group housing , which form only a small part of bank's housing finance business. The move by the largest bank, and housing regulator is supposed to create a trend amongst HFCs to pep up the home loan market struck by high rates, increasing cost of property.

The recent cut in statutory liquidity ratio (SLR) and 1.25% reduction in cash reserve ratio (CRR) by RBI would create around Rs. 60,000 crore of liquidity in the system, and RBI wants the benefits of this reduction to be reflected in interest rates for benefit of the customers.

Credit score necessary for Home Loans – CIBIL

Looking to the increase in home loan enquiries in last few years which indicates the increase in demand for loans, CIBIL has now asked the customers to check their credit scores if they are planning to apply for the loan in near future.

Due to increase in the property prices and the affording capacity of the customers, the amount of the loans has also been increased in comparison to last fiscal. There has been massive increase in the value of the loans.

“More than one-third of borrowers sanctioned home loans in 2011 were less than 35 years of age and 70 per cent less than 45 years of age”, said Mr. Arun Thukral, Managing Director. Almost every bank now assesses the CIBIL report and CIBIL TransUnion scores.

Borrowers with the credit score of 750 and above are more likely to get home loans easily sanctioned.

Consumer lose confidence in economy, loans demand to fall

The current economic situation was already a matter of concern for the banking sector, a report from AC Nielsen has confirmed the reduced confidence of the consumers in the economy and banking sector, which migh affect the demand for home loans for the current fiscal.

This came as a result of uncertain econmic conditions clubbed with inflationary pressure, sluggish GDP numbers and towering fuel costs. This is for the first time in over 2 years that the country has seen a dip in consumer confidence.

Over the last 5 quarters, the demand for home loan has remained sluggish, the home loans grew by 12% in FY11-12 against 17% growth in FY10-11. There are similar concerns about growth of personal loans.

Due to uncertainties in job prospects, the consumer is getting more wary of his/her spending on clothes, electricity, gas and saving more for uncertain times ahead. However India is still the second most confident nation on consumer confidence index. 

Interest on home loan could soften

“Upward pressure on interest rates is not there. Housing finance companies have already cut lending rates by 25 basis points,” said the NHB chief who expects home loans to grow by 20% in FY13 as compared to 18% in FY12.

According to Mr. R.V. Verma, Chairman and MD, National Housing Bank, “housing finance companies should be outside the purview of the 5 per cent cap on bank loans to non-banking finance companies”. NHB plans to disburse Rs. 17, 500 crore as refinance in duration between July 2012-June 2012.

It also plans to securitize some portion of HFC loans, around Rs. 100-150 crore which will benefit HFCs to undertake fresh business and gain liquidity. The regulator and supervisor of HFCs will also be securitizing a portion of the disbursements it has made to HFCs and banks, said Mr. Verma.

Prepayment charges on home loans removed by RBI

After the recommendations of Damodaran Committee to relief the aggrieved customers by the prepayment penalty on home loans, RBI has announced to stop charging any penalty on the foreclosure of loans.

"It has...been decided that banks will not be permitted to charge foreclosure charges prepayment penalties on home loans on floating interest rate basis, with immediate effect," the Reserve Bank said in a communication to banks. 

 

This will prevent switching of customers from one bank services to another in lieu of lower interest rate and prejudices between existing and new borrowers."As such, foreclosure charges are seen as a restrictive practice deterring the borrowers from switching over to cheaper available source," the RBI said. 

 

"Though many banks have in the recent past voluntarily abolished prepayment penalties on floating rate home loans, there is a need to ensure uniformity across the banking system," it added.

Decline in home loan share in Bank’s Credit

RBI has observed continuous decline in the share of home loans in the bank’s credit in this fiscal despite the fact that total outstanding credit to home loans rose by Rs. 179,857 crore in last 4 years period. The reason may be the economic slowdown and the drastically growing real estate prices.

 “While the slowdown in economy had its impact, high inflation ate into household budget and at the same time real estate prices went up sharply, leading to a slowdown in demand,” said Brinda Jagirdar, GM and head of economic research at State Bank of India. “RBI too played some role by tightening the prudential norms and enhancing the provisioning requirement so as to prevent a housing bubble.”

The data gathered by Department of Registration and Stamps, shows 18.5% decline in registration of new homes in Mumbai in 2011-12.

Home Loan demand rises according to CIBIL

According to a survey by CIBIL, credit rating agency, the home loan enquiries have been increased up to 18% in first quarter of year 2012. This proves that the demand for home loans is increasing. In last few quarters, it has been seen that home loans enquiries are rising continuously.

With the easing of monetary policy for loans in this segment, customers are increasing in number. Customers applying for loan amounting less than 5 lakh have decreased to 20 per cent from 41 per cent where as for loan amount more than 10 lakh, the increase is 55 per cent from 33 per cent.

Customers who got their loan sanctioned amounting between 5 lakh to 10 lakh remained around 25 per cent. Consumers are now more inclined towards seeking home loans to build their dream home.

RBI asks RRBs to stop foreclosure charges on home loans

After directing the commercial banks and move by NHBs, RBI has asked Regional Rural Banks (RRBs) to remove any pre-payment penalty on home loans.

"It has, therefore, been decided that Regional Rural Banks will not be permitted to charge foreclosure charges or pre-payment penalties on home loans on floating interest rate basis, with immediate effect," RBI said in a notification.

This step will help in spreading a uniform banking system across the sector and reducing discrimination between new and existing borrowers.

This move is a consequence of Banking Ombudsmen Conference which was held last year. There the consensus suggested that the banks should not impose foreclosure charges on home loans with floating interest rate.

“Not to permit” banks to levy charges has been proposed by RBI in the annual monetary policy 2012-13 for home loan segment.

Choose right insurer for your Home Loan

"If something happens to the main borrower and the family can't afford to pay the EMIs, they can be evicted from the house," says Suresh Sadagopan, a certified financial planner and founder Ladder 7 Financial Advisories.

You can cover your home loan by choosing one of the options: - Home loan Protection Plan (HLPP) and other is Pure Term Cover which is recommended by the Financial Advisors.

"HLPP, often sold along with the housing loan, offers a risk cover (sum assured) equal to the loan amount. As the outstanding loan amount reduces, the size of the cover also reduces," says Pankaj Mathpal, certified financial planner & Managing Director, Optima Money Managers.

In case of a term cover (of Rs 50 lakh), the family would get the entire sum assured of Rs 50 lakh. "Even after settling the loan amount, the family can still make a saving of Rs 9 lakh," says Pankaj Mathpal adds.

Prepare good financial budget for Home Loans

Your Home is the Heaven on earth. So do a good research and prepare a budget to enjoy the right deal for your dream home.

• Make a realistic budget by calculating your savings and investments. Check the current real estate prices.
• Prepare an action plan by interacting with brokers, visiting real- estate websites etc.
• Calculate the down- payment amount that is suitable for you.
• Calculate other charges like registration fees, processing fees, brokerage charges etc.
• Amount of loan you are eligible for based on your income and bank norms.
• Consider no pre-payment penalty on loan.
• Try to negotiate for interest rates or some benefits with your bank.
• Update yourself for interest rate schemes available.
• Decide whether fixed interest rate with fixed EMIs schemes suits you or floating interest rate schemes.
•  Finally, try to complete the whole procedure for approval of loans smoothly.

Home Loan Rates-Intensive Study required

Before you go and get yourself involved in the home loan market arena, it is necessary to get yourself familiar with the ins and outs of this field. You should be aware of the home loan rates each and every bank is offering. The ones offering a loan at low rates needs to be studied very carefully before actually going to finalize the deal with them. Often there are many things hidden behind such attractive offers which you need to clear out with the bank.

Home loan rates need to be very carefully understood by the consumer since it may vary from bank to bank. In case you want to take a loan for few years, the ones offering a floating or variable option to repay the loan will be best.

Summary: Home Loan rates need to be carefully studied by the consumer since there can be lots of flaws involved with it.