subject: Housing Loans in India [print this page] Housing Loans in India Housing Loans in India
Housing Loan is a crucial aspect of Real Estate in India. Owning a house is determined as a dream fulfilled by us all our life. The job to buy a home can be a little bit difficult in the absence of economical guidance.
However, one needs to have adequate funds to buy houses or rent apartments in any decent locality. Since, availing mortgage loan in India have got much simpler, it is easy to opt one for, we can avail bank loan at convenient and best interest rates. Be it home loan or any other loan, many banks offer housing loans or mortgage loans at convenient rate.
The fantasy to opt a home seems to be execute in our life.
Once you have planned to take a Home Loan, the next thing you worried about is the interest rate.
So, to sort out your problem here is the three most common types of Home loans:
Fixed Rate Home Loan:
If you have made up your mind that you will buy a home and plan to stay in it till you pay the loan entirely then a fixed rate home loan will probably benefit you.
Under this of loan, you will be designate a fixed interest rate, and then the given rate will not change for the life period of the loan. There may be a situation that interest rates has increased but under this scheme your rate will not change. But if rates go down even then you will be paying the higher rate.
In this case you have a choice of refinancing to benefit paying low rate.
Floating Rate Mortgage:
Apart from the fixed rate home loan, the interest rate under this scheme increases and decreases with the market.
In simple words, if the interest rate is low, the rate on your home mortgage will be low and if it's high, you have to pay according to the higher rate. You are left bewildered at the rapid changes in the interest rates because at the time of paying dues you do not know what the current rate of interest is going on.
This type of loan doesn't suit all.
Balloon Mortgage:
In this type of loan, Interest rates are much lower than fixed rate or Adjustable Rate.
Under this scheme, you will pay monthly dues for a specific amount of time, with a fixed interest rate. The difference is that at the end of the payment schedule, you will owe the unpaid balance in one lump sum. The major disadvantage of this type of loan is that there is a huge payment due at the end. But its auspicious if you are planning to hold the house for a short period of time.
