Refinancing Of Home Loan-All's Well That Ends Well.

Many of us are in a hurry to take that home loan. As long as we can repay the home loan   All Is Well. What happens when we cannot pay back the home loan? What happens if I lose my job or if I am faced with a sudden illness and   I am unable to pay back the EMI Calculator?  Is this the end of the road for me?  If any of you have had such as experience what would be your response .Would you have panicked? It would be good to remember that this is not a rare situation. Here banks have customers who do default on their loans as well. Here it is in the best interests of the bank to restructure your loan, as if it fails to do so it would increase the bank’s nonperforming assets.

Which bank would want to see an increase in its NPA? Remember every cloud has a silver lining. I would like to remind all of you that the team of   Financial Planners at IndianMoney.com are always there for you to plan your Home Loan needs in a most efficient manner and are always willing to lend you a helping hand.

How to Refinance Your Home Loan:

• So what should   you do under such circumstances?  Let us consider that you are temporarily not able to settle your EMI Calculator due to a sudden illness. You should then approach the bank in order to restructure your loans. Let us say that you are paying an EMI of INR 8000 for 10 years, and then the bank may restructure it for INR 7500 for say a slightly longer tenure. Here the bank would not lose money as you would repay the amounts over a longer period of time. You are able to get that highly needed   breathing space maybe at a slightly higher cost. Everyone is a winner in this case. If you are stuck in such a situation negotiation with your banker is the best approach. However it is best to follow the prevention is better than cure approach by setting aside say 6 months of EMI Calculator installments in a highly liquid fund for sudden emergencies.

The Balance Transfer (Switch Your Home Loan Option):

What is Home Loan Balance Transfer?

• Here Home Loan Balance Transfer is a refinancing option to get the existing home loan in one bank transferred to another bank in order to avail the benefits of a lower interest rate. Here you can read up the website IndianMoney.com in order to understand your home loan needs.

Why Should You Opt For A Balance Transfer?

• Here the existing   home loan is set at a very high rate and despite discussions with the existing lender or bank there is no response. Here banks may not want to consider the negotiation options available to them and under these circumstances we might need to act in order to protect our interests.
• Here at the time the loan was first taken the options were limited. Now there is vast number of options available to us. We can avail of these options by using the home loan balance transfer option. Here the banking sector has undergone vast changes and we can tap into these benefits in order to avail loans at cheaper rates.
• In many foreign countries after 3-5 years it is very common to refinance ones home loans in order to tap into the benefits of obtaining loans at very competitive   interest rates due to prevailing market conditions. This also helps to pay off   home loans faster.

 Using the Balance Transfer Option as a Bargaining Chip:

• Let us consider the case in which the bank has reduced rates for new borrowers. You are an existing borrower with a high credit score. Here you can approach the bank using the switch your home loan option as a bargaining chip in order to secure a lower rate from the bank.
• Let us consider the case in which we have taken a loan of 15 Years tenure. We still have about 10 years of repayment left. Here the new interest rates offered are 1% lower than the rates offered by our bank. Here we have the Balance Transfer Option where we shift the outstanding loan from our lender to the cheaper lender. Here the new lender will check our repayment history and it is necessary to keep the EMI Calculator statements handy.
• Here as per the RBI circular all banks have waived prepayment penalty on floating rate home loans .Some of the banks have also waived prepayment charges on fixed  rate home loans. Another important factor we need to note is   the Foreclosure charge. These charges apply when a borrower wants to switch his loan from the existing bank to another bank offering lower floating rate of interest or if the person wants to shift to a lesser rate within the same bank. Here the RBI has directed banks not to levy charges for foreclosure of home loans taken on floating interest rate basis. As per the Damodaran Committee report the various banks did not pass on the benefits of lower interest rates to existing borrowers when the rates fell. Such rates were offered only to new borrower’s .Such a practice combined with foreclosure charges prevented existing borrowers from enjoying lower rates with the same bank or switching to a lower rate in another bank.
• Banks charge around 0.5% -1% of   the total home loan amount applied for as a processing fee. It is possible with hard bargaining with the new lender to bring this down or in some cases even waive off these home loan processing fees. Here it is right to remember the phrase ‘Strike When The Iron Is Hot’

 Drive A Hard Bargain:

·         Here it is good to drive a hard bargain by talking to the existing bank. Here we can meet the bank and state the reason for the switching of the loan. Here we state that the current floating rate is too high and I would like to lock- in a lower floating   rate due to my urgent financial commitments and I would like to retain the loan at the same bank rather than shift to another lender. Then settle for a round of discussion and negotiations.

·         Here if we get a better rate in another bank we would like to shift our loan to this bank. We would require a   letter of consent from the existing bank to give the go ahead to shift to a new lender. Here you need to make sure that you get the necessary foreclosure statements, account statements and the list of property documents from your existing bank.

Keep Your Powder Dry (Always Look Out For Opportunities):

• Here when opportunity strikes we need to seize the moment .It is prudent to look around and lock-in the best possible interest rates using the Balance Transfer option. Here a change in the interest rates by even say 0.5% is quite significant over a vast sum such as INR 50 Lakhs. Here Mathematics   might not be the favorite subject for many of us, but a little homework   here can save us thousands of rupees.
• Here we need   to be aware of the lock in period of the home loans. Here banks have a loan disbursement date when they release the payments. For completed buildings this may not be an issue .For an under construction building the bank will disburse the loan in stages. It might take 2 years for the house to get constructed. Here we need to check when the disbursement dates are drawn. Is it drawn when disbursement commences, as disbursement is in stages or when the bank has fully completed the disbursement of the loan. This is very important to avoid loan penalty when refinancing the home loan.
• Do not seek additional sources of credit when your loan is being refinanced. If you require a new car put it on hold until your home loan has been refinanced. Here we need to set priorities in life. There have been cases in which refinancing of home loans has been scuttled because of poor credit scores. This is like jumping   into a river with weights tied around your neck.

Never Change Horses Midstream

Changing of jobs while refinancing of your home loan is like changing horses in the middle of a stream which might result in your drowning. Here we might get a lesser paying job which might scuttle the whole balance transfer process. Here if the pay increases then we might have missed a better home loan balance transfer opportunity or at the very least the whole tedious process might have to be repeated as you might have to resubmit income statements.

{Source: http://indianmoney.com/blogs/refinancing-of-home-loan-alls-well-that-ends-well}

EMI Calculator - Easy to Know your monthly loan payment.

There are times when you need financial help for which you can’t totally rely on your relatives or friends for the financial help because they have their own needs to meet. It can be your dream vacation or a medical emergency, which require a good amount of money and to get the aid quickly, you can possibly opt for loans because it’s one of the fastest ways to get the help. Loans are the financial help which you get from banks and no matter how much amount you need, loans can be veracious.

As they say nothing comes easy, loan is the amount you borrow form bank which means you need to pay it back with interest. Bank charge you an interest rate on the loan amount you borrow, which you have to pay along with the repayment of your loan. Interest Rate varies from bank to bank and it also depends on the type of loans you apply.

Loans are divided into several types to make it easy for you to get the help according to your need. Personal loans are the unsecured loans, which you can use for any legal purpose but the interest rate is little higher because there isn’t any collateral involved, which bank can have as a security. On the other hand, Home loan, Auto Loan and Loan against property are all secured loans because the property or vehicle work as the security and that’s why these loans come with less interest rate.

Nowadays, ecommerce has surely made everything reachable to the people, including the financial help. You don’t have to visit the bank anymore, to apply for the loan or to enquire anything regarding loans. You can do all the calculations and the comparison of CURRENT LOAN RATES IN INDIA, right at the comfort of your home. Now wouldn’t it better to know how much payment you’ll be paying monthly, before you actually take the loan, that too without going anywhere? Well, with the help of LOAN CALCULATORS IN INDIA you can calculate how much monthly EMIs you’ll be liable to pay. You just have to visit the online portals and everything will be right in front of you, whether you want to compare the interest rates or you want to calculate the EMIs.

How to use EMI Calculator?

Almost every financial online service provider offers this beneficial tool of EMI Calculator to its customers and it’s very easy to us. Just mention the loan amount, interest rate and loan tenure, it’ll show you exactly how much monthly payment you’ll be paying. If you want more specific results, then you can pick it according to the loan type, like to calculate EMIs on personal loan, home loan or auto loan. So take a smart move and check everything before you actually take the step.

{Source: https://www.creditnation.in/creditwisdom/emi-calculator-easy-to-know-your-monthly-loan-payment}

5 steps to follow when your home loan is rejected.

Are you one amongst the many in India whose home loan has been rejected? Well, there’s no reason to be dejected as it is not going to help matters. When your home loan application reads as “no”, you need to read it as “try again”. There is no reason to feel dejected as you are just an approval away from purchasing your dream home. Below are 5 crucial steps that can help you get that dream home after your home loan lender has said no.

Dig into the details

Usually, the letter sent by the home loan lender conveying the rejection is a generic one. Do not let the cloud of disappointment blur your thinking. Instead, you must try to learn the reason for your home loan being rejected. If the letter does not specify the reason, call the concerned officials and try to understand the precise reason for the lender rejecting your loan application. This is very important as it helps you prepare better when reapplying for the loan.

Reduce the loan amount

While assessing your loan eligibility, a strong possibility of the lender rejecting your loan application is because your monthly income is not sufficient to support the required home loan amount. In such cases, it is recommended to rework the loan amount so that the debt servicing ratio can be corrected, which feel make the lender feel more confident in your loan repayment ability.

Pay off existing debts

If you already have multiple loans, the chances of your current payment obligations getting in the way of the home loan are high. This is because it leads to a higher debt to income ratio. Simply put, this means that your debt obligations and repayment commitments are higher than your existing income. And the lender feels that more debt obligations will increase the chances of your defaulting on the payment. The best alternative here is to pay off a few of the existing debts to rectify the situation.

Work on your CIBIL score

Lenders rely on CIBIL score and CIBIL report, as it helps them understand your credit behaviour and credit history. A delay in repayments and defaults result in negative impact on the CIBIL score and a poor score is most often the main reason for home loan rejection. In such cases, obtain a copy of your CIBIL score and seek professional advice on how you can improve it. Remember, it takes time for the revised scores to reflect, so the better you begin to improve your CIBIL score, the more favourable are your chances of getting a home loan approved.

Adjust to make it work

The home loan amount, rate of interest and loan tenure are the main factors considered when it comes to home loans approval. Your EMI is calculated on these factors. Now, for the EMI to be worked out for your income; either the home loan can be decreased or the loan tenure can be increased. Consider all available alternatives too such as another property that is more affordable or other home loans that offer better interest rates.

When applying for a home loan, the key lies in understanding the home loan lender’s requirements and working towards meeting it. A little bit of patience, financial discipline and determination is all it takes to get your home loan sanctioned with minimal effort.

{Source: https://www.indiabullshomeloans.com/blog/5-steps-to-follow-when-your-home-loan-is-rejected/}

Personal Loan EMI Calculator.

Use the interactive home loan EMI Calculator to calculate your home loan EMI. Get all details on interest payable and tenure using the home loan calculator.

EMI Calculator.

Use the interactive home loan EMI Calculator to calculate your home loan EMI. Get all details on interest payable and tenure using the home loan calculator.

Why Should You Use EMI Calculator Before Applying For A Loan?

Loans are an integral part of our lives today. They help achieve some important financial goals which would otherwise not be possible. Be it funding your child’s future education or arranging money for marriage, paying for your dream home or that much wanted car. Whatever the need be, there is a loan for every purpose. There are important terminologies associated with every loan. “EMI” is one such common term.

Loans are repaid in Equated Monthly Instalments (EMIs). Every month a stipulated amount is deducted from your monthly salary towards repayment of your debts. EMIs can either be paid through auto-debit instructions set up on salary accounts or the borrower can send cheques every month. In either scenario, the amount to be paid back is the same, month on month, for the entire tenure. This amount is officially referred to as EMI.

How EMI is calculated?

Primarily there are three factors that are taken into account when computing an EMI. They are:

1. Amount of Loan – This the total amount of money borrowed. In some cases, the loan may be sanctioned for a larger limit however; only a part of it is used so the EMI is calculated not on the sanction limit but on the amount of money actually borrowed.
2. Interest Rate – This is the rate of interest that will be charged by the lending institution on the sum lent. The interest is calculated on reducing balance.
3. Loan Tenure – This refers to the entire period for which the loan has been granted. The tenure in months is used for calculation purposes. Alternatively, this can also be called the number of instalments due.

EMI is calculated as below:

EMI =    P * r * (1+r) n/ (1+r) (n-1)

Where,

P = Principal or Amount borrowed

r = rate of interest per annum

n = number of instalments.

Thankfully in this age of technology you do not have to indulge in manual calculations. You can make use of online loan EMI Calculator to instantly arrive at a possible EMI. Given the calculation above, it is aptly clear that EMIs are directly proportional to interest rate and principal amount, while it is inversely proportional to the loan tenure. In simple words, higher the amount borrowed or higher the rate of interest, the EMI will be higher too. However, longer the tenure, smaller will be the EMI.

For example:

For a personal loan of 1, 00,000 at the rate of 12% for 12 months, the EMI would be = 8884/-. For a personal loan of same amount for the same tenure but at rate of 15%, the EMI would be = 9025/-. For a personal loan of 2, 00,000 at the rate of 12% for 12 months would yield an EMI of 17,769/-. Whereas, for a loan of 1, 00,000 at the rate of 12% for 36 months would spell into an EMI of 3321/-.

Thus you can see how your EMI changes with a change in any of the three primary factors.

Why Calculating EMI is so important?

A lot of people are extremely enthusiastic about getting financed. While they plan extensively on what to do with the funds received, they often go underprepared from the debt-repayment perspective. Knowing what your EMI would be before you have applied for a loan would enable you to budget your monthly expenses accordingly.

People who have calculated their EMIs are prepared for what they are getting into, plan for how their lives will be impacted post the EMI and deal better with the burden of debt-repayments than those who don’t plan enough. Goes without saying, the difference of better planning often shows in better credit scores.

Comparing EMIs on loan offers by different lenders guides borrowers to better deals.

EMIs are calculated in such a fashion that with every installment, a part of the principal and a part of the interest is repaid. Interestingly, and contrary to popular customer belief, during the initial phase of the loan tenure, a larger portion of the EMI is allocated towards repayment of interest. Practically after half the tenure has passed, a larger fraction of the EMI is accounted towards principal.

More of this can be made clear through an Amortization Schedule. This is an important table that shows the break-up of your EMI into interest and principal components, month on month. You can either request for an amortization schedule from the bank you apply to or you can calculate the same using online loan interest calculator. This is another important document you must go through before signing any documents.

Why does the EMI change over the tenure?

Incase during the loan tenure, there is a change in any of the three variables that go into the calculation of the EMI, then the EMI might change. Some of the common reasons are:

1. Borrower prepays the loan – this means the principal amount will fall and therefore the interest calculated on the balance amount will change too. This will bring the EMI down.
2. Interest rate change – If your loan is based on flexible rate of interest then the EMI will be adjusted to account for the change in interest rate.
3. Borrower requests for restructuring of loan and an increase in loan tenure. This is will mean a lower EMI.

Summing-Up

Since computation of EMI is made easy with the help of online EMI Calculator, every person hoping to take an advance must make use of it. It helps in calculating your affordability by helping you understand on what will your left over disposable income ultimately. This in turn helps you to avoid poor credit.

EMI varies with loan tenure and interest rate. Amortization schedule helps the borrower see how much outstanding balance is left. It is especially helpful when the loaned wants to foreclose or prepay the loan. The bottom line of any loan is the EMI. Knowing the EMI keeps the borrower from hitting the bottom.

{Source: https://www.creditsudhaar.com/blog/2016/09/26/why-should-you-use-emi-calculator-before-applying-for-a-loan/}

7 Essential Tips For First Home Buyers.

Use the interactive home loan EMI calculator to calculate your home loan EMI. Get all details on interest payable and tenure using the home loan calculator.

Understanding Home Loan Eligibility.

Building a home incurs significant costs, and for banks to be able to lend to you the required amount for taking house loans, they have to be convinced that you have the capacity to repay what you’ve borrowed with interest within the stipulated time period. A measure of this ability is known as Home Loan Eligibility.

People from different levels of income are eligible for different amounts of loans based on their salaries and expenses. It is calculated on the basis of multiple factors including monthly income, fixed monthly obligation, current age, retirement age etc. Basically your home loan eligibility can also be considered an indicator of your home loan affordability.

You can get a rough idea of your Home Loan eligibility through a home loan eligibility calculator that is available online. By entering the required details, you can find out the amount of loan you are eligible for, the interest that will have to be paid, and the tenure of loan.

These calculators can also be used as a housing loan EMI calculator, as most Home Loan Eligibility Calculators today will tell you the amount of payable EMI as well. Your home loan eligibility can also be helped by having a good CIBIL score. A CIBIL score is a three-digit numeric summary of your credit history derived using the credit history found in the CIR. A CIR is an individual’s credit payment history across loan types and credit institutions over a period of time.

Home Loan Eligibility Criteria:

Different banks have different criteria for deciding an individual’s eligibility for a home loan of a certain value. Hence there is no standard calculator that can give you an all-round eligibility, across all banks or the economy. However, there are certain common factors that decide your eligibility that are common all across.  These include:

1.  Deposit amount
2.  Credit history- This is where your CIBIL score that was mentioned previously comes into play. The  more regular you were, in paying off mortgage of previous loans, the better your loan history is  going to look and hence the better your chances will get in getting your new loan approved.
3.  Income- The amount of loan you can get from a bank is directly proportional to the amount of  monthly or annual income you have, as this directly affects your loan affordability and your ability to  repay said amount. 
4.  Financial stability- The type of employment also plays a factor here. A self-employed individual who would have different earnings in different months would find it more difficult to get a loan. However, this again is dependent on the amount of average monthly income that the borrower earns.
5. Debts- The amount of debts that one has racked up and is pending to be paid off will have a great impact on his/her home loan eligibility. The more the amount of pending debt, the lower the eligibility for another loan.
6. Value of your home (if any)- Every loan requires the borrower to mortgage an asset as collateral, in case he/she is not able to pay back the loan amount with interest. An already existing home can act as a great collateral for a home loan. Hence, the higher the value of said home, the better your eligibility for a home loan.

Getting a house loan requires you to convince your bank that you can afford to repay the amount with interest. If the said parameters work in your favour, getting a home loan is just a matter of paperwork and approval.

{Source: https://www.indiabullshomeloans.com/blog/understanding-home-loan-eligibility/}

Tips for Getting a Home Loan.

Use the interactive home loan EMI Calculator India to calculate your home loan EMI. Get all details on interest payable and tenure using the home loan calculator.

HDFC Home Loan Closure Procedure

Use the interactive home loan EMI calculator to calculate your home loan EMI. Get all details on interest payable and tenure using the home loan calculator.

A Guide to Secured Loan For Home Owners

When you're looking for a loan, it can often be difficult to decide what sort of loan you should get; after all, there are a number of options available. Unfortunately, not all of the options that you might find will be appropriate to your needs; if you own a house, then you might be best served looking at some of the available secured loan for home owners.

By considering secured loan for home owners, you might open yourself up to lower interest rates and better loan terms than you previously thought possible. Best of all, you'll likely be able to find some secured loan for home owners that will give you a good rate regardless of any credit problems that you've had in the past. To assist you in your search, here are some basic facts about secured loan for home owners that should help you to better understand how these loans work and how to find your best deal.

Why Is Home Ownership Important?

Obviously, when you're looking for secured loan for home owners it's important that you actually own a house. The reason for this isn't that lenders are trying to be elitist, but instead that they offer specialized loans which are based upon the value of the equity you've built up in your house. If you don't know what equity is, don't worry; it's simply a measure of how much you've paid into your mortgage in relation to the total value of the house. Because of the higher value of equity in comparison to many other forms of collateral, lenders are generally able to offer loan rates and deals to individuals who would otherwise not be able to get them.

Does the Mortgage have to be paid in Full?

No, your current mortgage doesn't have to be paid in full for you to qualify for secured loan for home owners. The loan is based only on the equity, instead of the full value of the house... and your equity is only representative of the amount of your mortgage that you've paid. When you take out an equity loan, you likely won't be able to borrow more money than you have equity built up for this reason. If you borrowed more, then you would be borrowing against value that was already tied up in the mortgage.

Do Interest Rates Vary Among Lenders?

Yes, interest rates can vary greatly among different lenders who offer secured loan for home owners. This is the reason that it's important to take your time and select a lender that's truly right for you, meaning that they offer you a good interest rate and flexible loan and repayment terms so as to keep your payments low and manageable. When taking out larger loans or using high-value collateral such as equity, it's important that you always take a little bit of extra time to search for the best loan that you can get.

How Do You Find the Best Loan?

In order to find your best loan, you'll have to shop around at a variety of different lenders and request quotes for secured loan for home owners. Visit several different banks, mortgage lenders, finance companies, and even online lenders, and begin comparing the different quotes that you've received based upon the interest rates and loan terms that each offers. This will likely show you a range of loan offers, and you'll be able to easily pick the offer that has the best rates for you and your new loan.

{Source: http://ezinearticles.com/?A-Guide-to-Secured-Loans-For-Home-Owners&id=1138930}

An online guide to simplify your home loan emi calculation

Use the interactive Home Loan EMI Calculator to calculate your home loan EMI. Get all details on interest payable and tenure using the home loan calculator.

Getting a Home Loan

A 'home loan' or 'secured home loan' is one where the borrower pledges an asset, in this case - your property (or in some cases a car) as collateral for the loan. When getting a home loan remember that the loan is secured against your property. If you cannot keep up repayments the lender will, in some cases, take possession of the asset. A home loan will usually offer a rate of interest and terms which is more favorable than an unsecured loan, because the lender is relieved of most of the financial risks involved.

Getting a loan can be a somewhat tedious process at times. Be aware that not every lender is the same, so ensure that when getting a home loan to check the terms of each one before your make your choice. When making your search remember to compare details such as loan repayment period and interest rate before committing to any decisions.

One of the first things that you will probably be comparing when getting a home loan is the interest rate of the loan. By no means is this the only thing which you should consider, but it is a very important part of choosing a loan. Over the period of the loan, even a small difference in interest rates could mean hundreds or thousands of pounds. Compare the interest rate of each lender along with other factors prior to getting a home loan. Remember not to choose a company who charges an interest rate which is higher than others.

The next thing you should look for is the repayment term; some people consider the repayment term to be equally as important as the interest rate. When getting a loan, lenders will vary on the length of time they will allow you to repay the loan. For instance, say you wish to borrow £5,000 - the first lender may have the lowest interest rate but will only allow you two years in which to repay it. This may not be to your needs. Your best option when getting a home loan is to make use of the tools and sites online and go with a loan which you feel most comfortable with.

Processing fees are charged by certain lenders. Be wary of these, as sometimes lenders will use them to offset a lower interest rate. In most cases, they will be tied to your credit worthiness. You need to be clear about which fees you will be charged prior to getting a home loan.

The most common way for people who are getting a home loan to pay is through having their bank accounts deducted on a monthly basis. However, many online lenders will still offer a variety of payment methods. Some people prefer to use credit or debit cards to complete the transaction. There are also minorities who wish to use a personal cheque, and lenders will still offer this - for now.

The bottom line is that when getting a home loan; select a lender who will offer you your preferred method for making payments whether it is cheque, direct debit or credit card.

Also, be aware that some companies may charge an early repayment fee. This means that when you pay your loan back earlier you may be hit with a charge. If you think that there's a chance you could repay your loan earlier than expected, be sure to check the terms of the loan. Use a price comparison site, or broker to ensure that you get the most competitive deal when online.

{Source: http://ezinearticles.com/?Getting-a-Home-Loan&id=3610820}

Lesser-Known Costs Associated with Home Loans

Loan For Home Construction - Go with HDFC home construction loan and you can build your home your ways. Visit us to know more about HDFC construction loan.

Obtain a Governmental House Loan

In today's market, purchasing a home can be an intimidating process - especially for the first time buyer. Interest rates are at an all time high and owning a home can often seem like a far-fetched fantasy for many prospective home buyers. Fortunately, government house loan can make that dream a reality and obtaining a loan is easier than ever. Government house loan are available at the Federal and state levels.

Federal government house loan are administered primarily through the US Department of Housing and Urban Development. The Federal Housing Authority, an arm of HUD, has been around since 1934 and provides incentives for private lenders to provide mortgages for people who otherwise wouldn't be qualified. The FHA does this primarily by backing the loans with Federal money, reducing the risk of loss to the private lender. The end result is that it becomes easier for someone who has little or no credit history to receive a loan to purchase their home because the FHA provides the mortgage insurance on the home themselves.

A government house loan can be a great way to secure a mortgage for your first home. There are also loans available to renovate your home to make it more environmentally friendly or for assistance when purchasing a "fixer-upper." When obtaining a loan for a fixer-upper, the government will allow you to include the cost of renovations in your original mortgage amount. An FHA loan also provides several benefits over a more traditional loan, such as lower monthly payments, interest rates, closing costs and reduced credit history requirements. In order to obtain an FHA backed government house loan, one must contact an FHA lender.

{Source: http://ezinearticles.com/?Obtain-a-Governmental-House-Loan&id=1924022}

9 Myths About Home Loans Exposed

Use the interactive house loan EMI calculator to calculate your house loan EMI. Get all details on interest payable and tenure using the home loan calculator.

EMI Calculator for Home Loan

Purchasing a house would be one of your most cherished dreams. And a home loan can help you fulfill that dream faster. So whether you are buying a plot for house construction, building a house, purchasing an apartment, buying a resale property or even re-modeling your current home, you can get the loan you require without any hassles. Now when you take a loan, you need to repay it back - by regularly paying EMIs.

What is a Home Loan EMI?

Home loan EMI is the fixed monthly payment that you need to make to repay your home loan as per a given schedule that can be calculated using a house loan emi calculator. EMI stands for Equated Monthly Installments.

Why should you calculate home loan EMI beforehand?

All loans have their own set of eligibility criteria that the applicants have to meet. Apart from that, you yourself need to know how much you are comfortable paying as EMI every month. This is the reason that calculating EMI using a housing loan emi calculator, even before you actually apply for the loan helps in getting a rough idea about your future monthly obligations.

How to calculate Home Loan EMI?

Calculating your EMIs is very easy. Just use the home loan EMI calculator given on this page. You only need to provide the following inputs:

·         Loan amount

·         Loan tenure

·         Interest rate

As soon as you press the submit/calculate button, the Home EMI Calculator will tell you the loan EMI, interest payable and total amount to be paid.

An EMI consists of two components - principal repayment + interest payment. Each and every EMI goes towards repayment of a part of the principal amount and also towards paying interest due on the outstanding loan amount. During the initial part of the loan tenure, a large part of EMI goes towards interest payment. But as the loan progresses, the EMIs contribute more towards repayment of principal amount.

Tata Capital Home Loan Features

This is a unique feature of Tata capital home loans. We understand that every borrower's needs and circumstances are unique. Some are comfortable paying more during later part of the tenure while others are looking to pay the same amount throughout the tenure.

Tata Capital's home loan allows you to structure the loan repayments as per your current and future expected financial situation. So if you think you can pay higher EMIs in future (in line with expected increase in your income), then you can do that using the step-up option. And that is not all. You can choose a tenure that suits you - starting from 12 months to as long as 360 months.

The amount that can be availed also ranges from a small Rs 2 lac to a much higher Rs 10 crore.

The rate of interest is the most important factor while making the choice of a loan. Tata capital offers home loans at attractive interest rates of as low as 10.15%. So to understand the impact of low interest rates on your EMIs, you can try out using different rates in the emi calculator for home loan.

Part Prepayment of Loan

When you take a home loan, you are almost always short of funds after you pay your EMIs every month. But as time progresses, your income also increases. This means that you can comfortably pay an amount that is even more than your regular EMI. Isn't it?

This is the reason that lenders now allow the option of making part-repayment as and when you are comfortable. Using this, you could opt to pay a monthly amount in addition to the EMI payment.

Tata Capital allows you to make penalty-free prepayment of upto a maximum of 25% of principal outstanding in a year. The benefit of part repayment is that it reduces the outstanding loan amount, which in turn reduces the interest amount due. So without changing the EMI after making the part-prepayment, the contribution of EMI towards principal repayment increases and the loan gets repaid faster.

Foreclosure of Loan

We at Tata Capital understand that in future, you might be in a position to clear off your entire loan. For this, we provide you with competitive and borrower-friendly foreclosure options. We do not put any foreclosure charges on floating rate loans sanctioned to individuals or on fixed rate loans being pre-closed out of borrower's own sources.

{Source: http://www.tatacapital.com/home-loans/home-loan-emi-calculator.htm}

Tax Benefits of Home Loan

Use the interactive House Loan EMI Calculator to calculate your house loan EMI. Get all details on interest payable and tenure using the home loan calculator.

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Should you invest your money or use it to prepay home loan?

If you have an outstanding home loan, and happen to have just received an annual bonus or any other lump sum payment, should you use it to prepay your loan? Or, should you invest it to meet some other goals? Assess the following conditions to arrive at the right decision.

The first variable to be considered is psyche: some people may not be comfortable with a large housing loan and to reduce their stress they may want to get rid of the loan burden at the earliest. For them, settling the question of how to use their bonus is simple: just pay off the loan. Gaurav Mashruwala, Sebi-registered investment adviser, categorically states: "You should pay off the home loan at the earliest. Several unfortunate happenings— job loss, death of the earning member, serious illness, etc—can cause trouble during the 10-15 year loan period. Treat it as a mind game and not a numbers game."

Tax benefit is the next variable. If a home loan does not seem like the sword of Damocles hanging over your head, it makes sense to continue with the regular EMI schedule. This is because of the tax benefits that a home loan offers. The principal component of the EMI is treated as investment under Section 80C. The interest component is also deducted from your taxable income under Section 24. The annual deduction in respect of the interest component of a housing loan, for a self occupied house, is limited to Rs 2 lakh per annum.

You won't be able to claim deduction on interest paid above Rs 2 lakh. So, if your annual interest outgo is higher than Rs 2 lakh, it makes sense to prepay the loan, and save on future interest payment. For example, the annual interest on a Rs 70 lakh outstanding loan, at 9.5%, comes out to be Rs 6.65 lakh. After taking into account the Rs 2 lakh deduction under Section 24C, the interest component will fall to Rs 4.65 lakh, and bring down the effective cost of interest from 9.5% to 8.64%, even for the people in the 30% tax bracket.

You can, however, optimize the tax benefits if the loan has been taken jointly, say, with your spouse. "If joint holders share the EMIs, both can claim Rs 2 lakh each in interest deduction," says Harsh Roongta, Sebi-registered investment adviser. In case of joint holders, there is no need to prepay if the outstanding amount is less than Rs 40 lakh.

There is no cap on deduction in lieu of interest paid on home loan, if the property is not self-occupied. "Since there is no cap for interest on loan against second or rented out homes, there is no need to prepay it," says Naveen Kukreja, CEO and Co-founder, Paisa Bazaar. Bear in mind, by prepaying your loan, you may also forego future tax benefits. For instance, if by prepayment, you bring down your outstanding loan amount to Rs 20 lakh, your annual interest outgo for subsequent years may fall below Rs 2 lakh. Thus, you won't be able to avail of the entire tax-deductible limit and, in such a scenario; prepayment may not be a good strategy. Also, building an emergency fund, if you don't have one, should take a priority over prepaying the housing loan: "Make sure that you have a contingency fund in place before opt for prepaying your home loan.

The third key variable is returns from investment of the lump sum at hand. As a thumb rule, you should go for investment, instead of prepayment, only when the post-tax return from the investment is likely to be higher than the effective cost of the housing loan. For investors in the 30% tax bracket, and whose outstanding home loan balance is less than Rs 20 lakh, the effective cost of loan is only 6.65%. Since there are several risk-free, tax-free debt options such as PPF, Sukanya Samruddhi Yojana and listed tax-free bonds, which offer higher annualized return than this, it makes sense to invest in them.

All the debt products mentioned above are long-duration products. If your risk-taking ability is higher and time horizon is longer, you can consider investing in equities, which can generate better returns "It's sensible for long-term investors (five year-plus holding period) to go for equities, provided they are savvy and understand the risks involved there.

There are some home loan products that provide an overdraft facility of sorts and help you maintain liquidity. All you have to do is to park the surplus money in these products and not bother with whether it's a prepayment or not. It's like prepayment with the option of taking out that money, in case you need it in future for personal use or for investment purpose. The strategy of maintaining the housing loan interest close to Rs 2 lakh per annum can also be managed by these special loan products. And even if you are going to invest, the SIPs can go from this account.

"I park my bonus and do SIPs in equity from the loan account," says Kukreja. Most banks charge more for these special loan products. "Though the stack rate differential is more, you can bring it down by bargaining with the banks.

{Source: http://economictimes.indiatimes.com/wealth/plan/should-you-invest-your-money-or-use-it-to-prepay-home-loan/articleshow/52161038.cms}