A "low interest" loan shouldn't mean you have very little interest in paying it back!
  • Real Estate Terms Every Home Buyer Must Know

    Buying a house is not exactly a walk in the park for many people, especially if home loans are involved. Many terminologies confuse a person to the extent that they may end up making a wrong decision with regard to purchasing a home, simply because they do not understand what it means. Mentioned below is a list of real estate terms that may come in helpful for a homebuyer.

    • Buyer’s agent – A buyer’s agent in other words is a real estate agent. The agent is in charge of helping you avail an ideal house. In return, the homebuyer pays the agent a percentage of the sale as fees.
    • Listing agent – A listing agent is an agent representing the seller of a particular house. They are in charge of selling homes. A listing agent in this modern day and age may also be online portals where one can list a house for sale.
    • Preapproval letter – A preapproval letter is a letter provided to you by a bank giving you an estimate of how much they will be able to lend you. This letter is usually sent out after one applies for a home loan. This letter, in a way, assures sellers that you will be able to avail the loan.
    • Listings – In simpler terms, listings is merely houses that are for sale. These houses may be listed in newspapers, websites, etc., therefore the term ‘listings’.
    • Appraisal – An appraisal is process of monetarily evaluating a house after a licenced appraiser has inspected it.
    • Fixed rate of interest – A fixed rate of interest is when interest rates on a home loan doesn’t alter throughout the entire tenure of the loan.
    • Floating rate of interest – Contrary to fixed rate of interest, floating rate of interest is when the interest rates on a home loan may vary from time to time during the tenure of a housing loan. These changes are in correspondence with interest rates that are prevailing in the market.
    • Margin – With regard to real estate, the term ‘margin’ is synonymous with the term ‘down payment’. In essence, margin is the difference between the total value of the property and the total loan amount that the bank provides towards the purchase of this property. As per the Reserve Bank of India (RBI), a bank may not provide more that 80% of a property’s value as home loan. The homebuyer must make a down payment of at least 20% of the property’s value.

      For instance, if an individual wishes to purchase a property/house worth Rs.80 lakh, the bank is allowed to give you a maximum loan amount of 80% of the value. The margin of 20% will have to be paid by the individual. This means that the bank is allowed to loan you Rs.64 lakh and the individual will have to make a down payment of Rs.16 lakh. Rs.16 lakh is the margin in this instance.

    • Offer letter – This is an official confirmation letter sent out by the bank recognising you as an eligible customer for a home loan. This is sometimes referred to as sanction letter. This letter is effective for up to six months, and in the occasion that an individual doesn’t receive a loan in these six months, the whole procedure to obtain this letter must be gone through from the beginning.
    • Post-dated cheque – A cheque that has been written out to a future date is a post dated cheque. This is common practice by banks to ensure timely EMI payments and these cheques cannot be presented ahead of time.
    • Disbursement – The release of the loan amount from the bank to the borrowers is known as disbursement. A loan is disbursed after it has been approved by the bank post document verification, etc.
    • Full disbursement – When a loan disburses the entire loan amount at once, it is known as full disbursement.
    • Partial disbursement – Partial disbursement is when a bank disburses a portion of the entire loan amount.
    • Advanced disbursements – When the entire loan is disbursed ahead of time, before the project is even completed, it is known as advanced disbursements. Advanced disbursements are made on request and the understanding that the project will be completed on time.
    • Equated Monthly Instalments (EMI) – EMI is the monthly payments that need to be paid by a borrower towards the loan obtained by him/her. The equated monthly instalments begin after the loan is disbursed and consists of interest and principal.
    • Pre-EMI – Under construction properties usually avail partial disbursement of loans. In this case, a pre-EMI is made towards the same. A pre-EMI consists only of interest payments. The principal will be paid off after the entire loan is disbursed.
    • Resale property – A property that is not bought directly from the builder is known as a resale property. It is a property that is already owned by someone previously.
    • Pre-approved property – Properties that have gotten an approval from lending institutions are known as pre-approved properties. However, this doesn’t mean that availing a loan for this property is certain. Each application has to be inspected even though it is pre-approved, and there is no certainty that a loan will be given out. Mentioned below are some other misconceptions of a pre-approved property:
    1. Timely project completion: Homebuyers often thin that since the property is pre-approved, builders will complete the project on time. Although a thorough background check is made on the builder with regard to his past records, etc., it is not mean that the project has to get completed on time. The financial institutions do not take action against the builder in case of a delay in completion.
    2. The project is compliant with the law: In many cases pre-approved properties are compliant with the law. However, there are instances where small banks have overlooked many legal aspects, making it risky for homebuyers to invest in these projects. Therefore, it’s always sensible to do some research on the bank and the project itself before investing in it. It is also important to note that a reputed bank is less likely to pre-approve a project that is not legally compliant.
    3. A home loan cannot be availed from other lenders: Merely because a particular project has been pre-approved by a particular lender, doesn’t mean a homebuyer has to obtain a housing loan from the same lener. This is a myth. The builder may convince you to do so. However, it is the homebuyer’s choice and he/she doesn't have to stick to the same lender that has pre-approved the property.
    • Credit Appraisal – The evaluation of a borrower’s financial status in order to assess whether or not he/she is eligible for a loan is credit appraisal. This is an important and mandatory system that a lender follows before disbursing a loan.
    • Security – Security, with regard to loans, is and asset provided by a borrower as collateral to the bank in exchange for the loan. If the borrower fails to pay off the loan, the asset may be auctioned to make up the outstanding unpaid amount.
    • Loan to value ratio (LTV) – LTV is the total loan amount against the total value of the house/property. If the total loan amounts to Rs.75 lakh and the house/property is worth Rs.1 crore, the LTV for the borrower would be 75%.
    • Interest – Interest is simply the excess amount paid by the borrower to the bank over and above the total loan amount. The EMI payable to the bank always consists of both the principal and interest, and initially the a larger chunk of the EMI would consist of the interest. But as the tenure phases out, the interest reduces while the principal simultaneously increases.
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    Home Loan Reviews

    • review Home Loan
      "Very Good Service"
      0.5 4.0/5 "Great!"
      I had taken my Home loan a long time back and the process in getting the loan has been pretty good. The loan amount has been sufficient and the interest rate which they offered has been nominal when compared with the market rate. Their customer support team has also been helpful during the process in getting the loan.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Apr 23, 2019
    • LIC Housing Home Loan
      "Very good"
      0.5 4.0/5 "Great!"
      I have taken one home loan from lic housing finance last fouryears , and their allover service is good , my loan amount is 19L , and rate of interest is nominal , EMI amount is 19k , tenure is 15 years , I am satisfied with lic housing finance home loan ,
      Was this review helpful? 0
      , thane
      Reviewed on Apr 23, 2019
    • Indiabulls Home Loan
      "Very Good choice for housing loan"
      0.5 5.0/5 "Blown Away!"
      I do have housing loan with India bulls, the interest is normal. I took the loan amount of Rs. 25 lakhs now I need to pay only Rs. 2.5 lakhs. They quoted me the interest around 8.99% now they revised to 9.5%, I done lots of part payment without any charges. They are very helpful and supportive on the queries handling.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Apr 23, 2019
    • ICICI Bank Home Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      I had taken a HOME LOAN from ICICI BANK a long time back and the experience i had has been quite good. The loan amount has been sufficient and the interest rate with them had been less when compared with the other banks. There was no additional charges made by them. The customer support team of them had been very much approachable.
      Was this review helpful? 0
      , noida
      Reviewed on Apr 23, 2019
    • ICICI Bank Home Loan
      "Need transparency"
      0.5 3.5/5 "Pretty good"
      I found the interest rate is bit higher in ICICI compared to other banks, where it was 8.75% but have been charged 9%. Am still paying the premium for home loan and it was taken before 2 years. The total tenure is 20 years. My experience was good just documentation took lit longer. At the time of registration process, they failed to provide one document. There was a processing fee but they informed it will be waived off during the loan process and it does not happen.
      Was this review helpful? 0
      , bangalore
      Reviewed on Apr 23, 2019
    • Punjab National Bank Home Loan
      "BETTER"
      0.5 3.5/5 "Pretty good"
      PNB HOUSING FINANCE LIMITED is the finance limited where i have applied for the housing loan, the application process was not much user friendly but they have provided with nominal rate of interest added on that the loan amount is good. The service is good.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Apr 23, 2019
    • Canara Bank Home Loan
      "gOOD SERVICE"
      0.5 5.0/5 "Blown Away!"
      I took a housing loan from the CANARA BANK .The interest rate was nominal.There are no additional charges such as part payment charges. Overall it has been a really good experience. I got the loan amount sufficient and even the tenure period was fair enough .
      Was this review helpful? 0
      , mumbai
      Reviewed on Apr 22, 2019
    • IIFL Home Loan
      "Very faster response"
      0.5 5.0/5 "Blown Away!"
      When I am looking for housing loan, IIFL immediately responded to my request . I got a very good customer response for verifying my documents . They processed the loan within one month of time . They sanctioned the loan with the average interest rate for next twenty years .
      Was this review helpful? 0
      , new delhi
      Reviewed on Apr 22, 2019
    • LIC Housing Home Loan
      "Average service"
      0.5 3.0/5 "Satisfactory"
      Previously i applied for my housing loan with LIC HOUSING FINANCE , but i felt the rate of interest they are charging too high comparing to other bank, the loan amount was sufficient it was on my requirement i got loan. Even i am not happy with their service.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Apr 22, 2019
    • HDFC Limited Home Loan
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have done balance transfer from other bank to HDFC limited, i have taken home loan with them recently, the reason for doing balance transfer because of the less rate of interest they are charging, they have charged me up to 9.2% previously was 8.5% it is not fixed, Still this loan is running.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Apr 22, 2019
    • Canara Bank Home Loan
      "GOOD"
      0.5 4.5/5 "Excellent!"
      I have applied for the housing loan with the CANARA BANK the documentation process was simple and i got the loan on time with hassle free process. They have given the satisfactory loan amount added on that the rate of interest was 8.8% and using from last 2014.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Apr 22, 2019
    • DHFL Home Loan
      "Not satifactory service"
      0.5 1.0/5 "Really Bad"
      I got home loan with DHFL FINANCIAL INSTITUTION . I am not happy with the services even the customer service response is not so good . The loan amount which they gave was good but they charge very high rate of interest . Overall it is fine experience .
      Was this review helpful? 0
      , mumbai
      Reviewed on Apr 22, 2019
    • IDBI Home Loan
      "GOOD"
      0.5 5.0/5 "Blown Away!"
      I have applied for the housing loan with the IDBI BANK the documentation process was quick and done on time. They have given the good loan amount the rate of interest was 8.7% which was a fixed. There was a processing fee, the duration for repaying is for 15 years.
      Was this review helpful? 0
      , chennai
      Reviewed on Apr 22, 2019
    • LIC Housing Home Loan
      "Should be transparent and prompt"
      0.5 1.0/5 "Really Bad"
      I have housing loan from LIC, the interest is high. My property located in lucknow but I am staying in mumbai hence for the balance transfer its very difficult they need lots of loan documents. Without proper notification they increased the interest but for the reduction they have lots of procedure and I need to pay Rs.1000.
      Was this review helpful? 1
      , mumbai
      Reviewed on Apr 22, 2019
    • HDFC Limited Home Loan
      "Excellent"
      0.5 5.0/5 "Blown Away!"
      I took one home loan from HDFC LTD , and their allover service is good , my loan amount is 30L but this time only disbursement amount is 3L and rate of interest is 8.95% IS nominal , and EMI is 3400K rest amount after some days I take it , I am satisfied with all thing their service.
      Was this review helpful? 0
      , kolkata
      Reviewed on Apr 22, 2019
    • ICICI Bank Home Loan
      "Good service"
      0.5 5.0/5 "Blown Away!"
      I have taken home loan through ICICI BANK . This is one of the good experience i had and would suggest everyone to go for it if you are looking for any Home loan., because they have the reasonable interest rate. When i had gone to apply home loan they sanctioned the amount in just few days .
      Was this review helpful? 0
      , hyderabad
      Reviewed on Apr 21, 2019
    • HDFC Limited Home Loan
      "Very Good Service"
      0.5 4.0/5 "Great!"
      I had taken a Home Loan from HDFC LTD a long time back where the process in getting the loan was good and the disbursement was on time. The interest rate and charges which they had made has been nominal and there has not been any sort of extra charges which they had made and the loan is still running.
      Was this review helpful? 0
      , new delhi
      Reviewed on Apr 21, 2019
    • LIC Housing Home Loan
      "Good service"
      0.5 5.0/5 "Blown Away!"
      LIC HOUSING FINANCE has also offered me a home loan. The process was quick and I got the loan on time. The rate of interest is and there were processing charges as well both are very nominal compare to others in the market . The tenure period is 10 year and it is sufficient .
      Was this review helpful? 0
      , vadodara
      Reviewed on Apr 21, 2019
    • review Home Loan
      "Average service"
      0.5 3.0/5 "Satisfactory"
      I have SHAMRAO BANK i have took home loan from this bank . Their service is better, Overall the whole loan process was easy and hassle free. Only the rate of interest were high with this bank. The processing fee is nominal with this bank . And the loan amount is not satisfactory .
      Was this review helpful? 0
      , pune
      Reviewed on Apr 21, 2019
    • HDFC Limited Home Loan
      "GOOD"
      0.5 5.0/5 "Blown Away!"
      HDFC LIMITED is the bank where i have taken the housing loan the loan amount they have offered was good and satisfactory added on that the documentation process was simple and pretty simple documents. I got the loan within one day, the rate of interest was nominal.
      Was this review helpful? 1
      , bangalore
      Reviewed on Apr 20, 2019
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