Are The Teaser Home Loans Good For The Borrowers?

The demand for the home loan in India is witnessing a steep fall mainly due to the rising home loan interest rates

. The people in India generally have a very low or average annual income and they do not wish to spend so much money on the things that they cannot afford. Same goes for the home loans also; they will not apply for the home loans if the rate of interest is on the higher side. To ease out this problem of the people and with the sole motive to provide the borrowers ultimate relief, the home loan companies in India have come up with the teaser home loans.

In the teaser home loans, the home loan amount is offered at much lesser rates i.e. the rate remains unchanged (Which are initially fixed) for some two to three years, but after that the fixed rate is changed to the floating rate. If one has to say, then this type of the loan is usually good for those people who earn a very average amount of the income.

If we need to better understand the concept of the teaser home loans, then let us look after its advantages as well as the disadvantages. The major disadvantage of this type of the loan is that it is more or less affordable for the prospective home loan borrowers in India. This loan can also turn out to be advantageous if there is any sort of likelihood of any increase in the home loan interest rates in the near future.

With the growing number of the home loan companies in India offering the teaser home loans, the Reserve Bank of India (RBI) has taken this into the account. One must not forget that this type of the loan is basically an attempt by the home loan companies or the financial institutions to woo the prospective home loan borrowers and nothing else. As you all will be very much aware of the fact that the economic situation in all the geographical corners of the world is not that robust and this type of the loan can create a lot of implications for the borrowers.

The RBI is worried because when the home loan rate changes after the two or three years, then it may create a lot of trouble for the borrowers who are unable to pay the amount and furthermore, there is no guarantee that the shift in the rate of interest will be according to the desired levels as stated by the RBI. In such a sort of the situation, the home loan borrower may end up paying the higher home loan amount. Therefore, it is necessary that the new home loan borrowers must take enough care and get the desired information before applying for the teaser loans.

by: tomleen

POST COMMENT

Simple Tips To Make Your Child's Glad To Following Homeschool Applying For Home Mortgage Loans: What You Need To Know Nursing Homes As Senior Home Care Providers Perfect Contemporary Home Design Moving Your Aging Relative To A Care Home Establish Your Priorities Before Selling Your Home Newington Ct: Best Towns In Connecticut For Your Home Rental Homes Are In High Demand In A Down Economy Digital Art- Enhance The Splendor Of Your Home Let Your Pictures Tell Your Story At Home Or At Work Home-based Gyms Are Now The Trend In The Market Decorate Your Dwellings & Add Character To Your Home How You Can Test For Asbestos In Your Home