Striking Home Loan Features You Must Know

Everyone is a dreamer and everyone can be an achiever too! The fact even applies when buying your dream home. The financial implications behind unleashing this dream are way more.

Looking at the current real estate rates, homes are available for around INR 25 lakh-1 crore on average as per their size, location and the overall facilities associated with the same. However, home loans are available to buy a house of your liking.

For your support, banks and housing finance companies (HFCs) increasingly customise home loan features to grab your attention. Let's check out some of the striking features the loan comes with.

Explaining Home Loan Features and Benefits

Home loans are a head turner for borrowers owing to the convenience they offer to them. The ability to fit into the income of different individuals makes it the most preferred option for them.

Conversion of Tall Purchase Amount into EMIs

As stated above, homes can be bought for around INR 25 lakh-1 crore in the current scenario. Opting for a home loan will convert the tall amount into affordable Equated Monthly Installments (EMIs). For example, a home loan worth INR 50 lakh for 20 years at an interest rate of 8.50% will lead to an EMI of INR 43,391.

Different Types of Interest Rates Form an Integral Part of Home Loan Features

Floating home loan interest rates range from 8.50-9.95% per annum, whereas fixed rates tend to be around 13-17% per annum. Although most choose floating rate offers, some choose fixed rates under the impression of no change in the repayment structure regardless of the interest rate changes implemented by banks and HFCs over time.

Yes, the repayment structure will vary with the change in floating home loan rates. However, over the long term, it yields a lower outgo compared to when servicing a home loan at fixed interest rates. So, choose the floating home loan rate regime over a fixed loan.

Approval without Credit Score - One of the Stunning Home Loan Features

Banks and HFCs do check your credit score online when receiving your home loan application. They do it to assess your repayment behaviour based on a credit score that ranges from 300 to 900. A good score of 700 and above will result in lower interest rates, while a score less than 650 will likely lead to higher rates.

However, lenders don't deny home loans based on the score. The score plays a role in loan pricing only. This is one of the incredible home loan features many may not know.

It's a secured loan where your home is mortgaged. So if you fail to clear the dues for six straight months, the lender holds the right to seize the property for which you must have taken a loan.

Home Loans are Not Sanctioned 100% of the Property Cost

Now this is quite a revelation and something a prospective home loan borrower must note.

Home loans of upto INR 30 lakh are disbursed at upto 90% of the property cost. While those sanctioned above INR 30 lakh and upto INR 75 lakh will account for upto 80% of the property cost. Loans above INR 75 lakh account for upto 75% of the property cost.

So, as a home buyer, you need to pay the non-sanctioned amount to the seller in the form of margin money.

Processing Fee - A Home Loan Feature You Must Evaluate

Lenders charge a processing fee of around 0.25-1% of the loan amount plus GST on average. Now there's a catch! While some lenders may include legal and technical fees as part of the processing fee, some may charge all three separately. However, the overall charge will likely be around the percentage shown above.

Repayment Tenure

Home loans can be repaid over a term ranging up to 30 years. The extent of repayment tenure depends on the loan amount and the number of years left before you retire. All such calculations go into deciding this home loan feature for you.

Wrapping Up

So we saw some striking home loan features that borrowers must take note of. It's important to ensure a home loan comes at a price you can afford while allowing you to unleash the comfort you seek in your home. For more updates on home loans and other financial aspects, stay glued to zarooribaathai.in. It also offers insights into beauty, health, the economy, women empowerment and sports.