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.
No comments:
Post a Comment