Most of us do not understand how a home loan works. We know that there are hidden charges and fees and that we land up paying a massive amount towards interest. Apart from this, there are many other things about your home loan that your banker does not wish to tell you. Though banks these days focus on being transparent, there are a few information that they do not discuss openly. Some of them are as follows:
Front Loading Method: As soon as your home loan is processed and you start paying your Equated Monthly Installments (EMI), you may think that you have started repaying your home loan. However, under the Front Loading method, for the first few years, your EMIs are posted towards your interest rate and not the principal amount. None of the banks will have an open conversation with you regarding how your payments are posted. By posting your EMIs towards the interest rate, the banks make profits as home loans usually come with longer loan tenure.
Banks have some Preferences when it comes to your Occupation: Your occupation is one of the important factors that affect your home loan. Though you may think that you are in decent, high paying job, the banks may not prefer your occupation. Generally, banks prefer government employees over people working in private sectors as their jobs are comparatively stable. They also prefer doctors, engineers, lawyers, and other white collar jobs.
Your Employer Matters: Did you know that banks have categorized employers into different grades? Most of the popular companies like the TATAs and Hyundai fall under the top category and many small startups and small companies fall under a lower category. If you are employed by an employer who falls under the lowest category, your loan application may be rejected. If your employer has a history of not paying salary on time and downsizing the number of employees working with them, you will not be considered as a strong applicant.
The Location of your Property is Important to the Bank as well: Banks consider the location of the property when you apply for a home loan. Most lenders prefer properties that are located within the city limits and in a prime location so that the appreciation cost of the property is high. In case you default on your loan, the bank will be in a situation to sell the foreclosed property at a higher cost and manage their expenses. They do not prefer properties in other cities and in remote places.
Banks care about the money you are left with after paying your EMIs: You would have noticed banks asking you for information about your existing loans, credit card bills, and other monthly expenses. This is because the banks want you to have surplus money after you pay all your bills. If you are financially burdened every month and are barely making your ends meet, chances are that you will default on your loan easily. For this reason, banks make sure that you are financially independent after paying your home loan EMIs.
Ready-to-move Houses versus Under-Construction Houses: When considering your home loan application, banks note the type of the house you want to buy if your loan is sanctioned. A ready-to-move house is preferred as an under-construction house is usually risky as the builders can delay the deadline and fail to give you the keys to the house as promised.
Adding your Spouse as a Co-Applicant makes you look responsible: Having your spouse as your co-applicant not only increases your monthly income and the loan amount but it makes you look responsible in the lender’s eyes. It increases the stability factor and builds your credibility.
There are many other home loan charges and fees your banker does not want to tell you about. If you are planning on buying a house, check for these hidden messages before signing a home loan agreement.
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I have taken Home loan directly through Corporation Bank .I have applied for the loan amount of 12 lakhs for the tenure of 18years .More documents collected for this home loan and got the loan amount on time and it was really sufficient .There was no drawbacks faced so far .I am satisfied with the service .
I had applied for home loan with HDFC limited on few months before, they have sanctioned a loan for 22 lakhs but due to some problem of my builder from my end I kept on hold for the loan process. They have detected for the processing fee of 11 thousands but they refunded 9 thousands rupees. The tenure of 15 years. Interest rate was nominal of 8.55%.
With HDFC limited I have taken home loan on 8 months before which was processed through them directly. They have approved for 8 lakhs but as of now I have taken only for 5 lakhs remaining 3 lakhs I will get later from their end. Due to shop will come in commercial loan so I have split the loan amount to get it. For the tenure of 15 years. The processing fee for 5000 rupees. The rate of interest 8.8%, they have sanctioned the loan within one month.
I have availed Home loan directly through Punjab National Bank .The rate of interest and the processing fee was very high ,I have got the loan amount on delay basis and i have applied for 26 lakhs for the tenure of 15 years.I have not faced any difficulties until i have received the loan .
SBI Home Loan is excellent because I've a salary account with them. They offered me a interest rate of 9.5% approximately. I took the loan amount of Rs. 23 lakhs so far i have got only Rs. 16 lakhs since my building is under construction. My EMI is not yet started. They sanctioned the loan in 2 working days.
SBI is a best bank and they had a better option. There is only simple documentation required and executive came to my place for collecting all the documents. I got the loan within 7 days. SBI did not taken any processing charges and they gave better and cheap interest. They take minimal time and better response from the customer care so i had chosen SBI for my home loan.
My home loan was purchased from Central bank of India. The branch offer was approved the loan immediately and they had a good behavior with the customer. I got the better clarity about the loan process as well as the rate of interest in central bank of India is less than compared to others so i have chosen this bank and the Branch Manager helped me in a better way.
From DHFL I have taken a home loan almost more than a year. One of my cousin's friend working there he recommend to apply for a home loan. The process was smooth and sanctioned a loan within 6 days with sufficient amount of 20 years. The rate of interest was high.
ICICI bank has provided me a home loan at the time of i want on a immediate basis. Since the necessity is over they have provided me a timeliness loan. I taken the loan amount of Rs. 10 lakhs and the have charged me a higher interest rates which i'm not comfortable with.
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DIVYESH PRATAPBHAI FERFA
Reviewed on Oct 05, 2019
I have balance transfer for a home loan with existing finance to HDFC LIMITED. One month before only I have a transfer of a loan. They have outstanding amount of 10 lakhs for the tenure period of 10 years. The rate of interest is 8.6% only for mortgage charges for 8 thousands need to pay for it.
I have taken a home loan with SUNDARAM FINANCE on 10 years before which was processed through them directly. The amount which was given for 13 lakhs for the tenure period of 20 years. There was lot of issues I faced with them customer service is not good response. The rate of interest was high of 14% compare to other.
I have taken home loan directly through State Bank Of India .The rate of interest and the processing fee was nominal ,I have got the loan amount on time and got a clear picture about the loan process ,I have availed this loan for the tenure of 20 years .I have completed only 2 years of EMI so far .,
I have taken Home loan directly through Central Bank OF India ,I have got the loan on exact time ,The rate of interest and the processing fee was nominal ,I have got all the details about this loan very clearly through bank agent.The process was very easy and still this loan is active .
Nearly 11 years before I had taken a home loan with STATE BANK OF INDIA which was processed directly to them.The loan amount was sufficient for the tenure period of 15 years. The rate of interest and processing fee are nominal. They have sanctioned a loan within few days and the process was good.
I have just applied the home loan from Central bank of India. I had a reference over there hence i applied the home loan from Central Bank of India. Documentation process was hassle free. They have offered me a interest rate of 10.1% and the processing fee was 1% of the interest amount +18% GST charges. They have dispatched the loan 20 days. The staffs are so friendly
HDFC was the only bank which is offering for the home loan in the area where i have purchased the house so i opted with HDFC LIMITED. I had applied the loan amount of Rs. 28 lakhs and the given interest rate is 8.5% and they charged me a processing fee of nominal one. I took the loan 3 years ago and they took 40 to 50 days to sanctioned the loan.
I took a home loan with PNB Housing Finance Ltd because the terms and conditions are very liberal at that time, I have been expecting higher loan amount for my purchase. They have fulfilled my requirements and its more than 90%. The rate of interest is little bit higher and they are not following RBI guidelines. When interest rate is increased, they have started charging more but not reduced when it got reduced.
I have completed my home loan with HDFC BANK before 3 years ago. I did foreclosure and that time the interest rate is not much. I bought a residential property and the loan procedure is very easy because my papers are strong and clear to proceed faster.
I have applied for Home loan directly through Bank Of Baroda and got the loan on stipulated time .This loan was upto 15 years and got the loan amount on time ,The agent gave all the required information about the loan process .I have got all the required details about the loan process and there was no drawbacks faced as well.
I am not happy with rate of interest which was given by LIC Housing Finance. I have purchased the Flat in 2017August. The loan amount was 40L and its 15 years tenure. The processing fee is not applicable. The customer service is good. But every year, they are raising the interest rate which was not good.