Home Loan – Gateway to your Dream Home

Everyone dreams of owning a home whether he has the capacity to buy or not. Usually dreams know no limit, so one can dream of owning any house, even the one beyond his buying capacity. But, some rational people dream of what they can achieve only. This is true for their home too. They dream of owning a home to fulfill their requirement and the one which falls within their buying or say repaying capacity. Because a home can be, and usually it is, bought through a home loan. This is really an attractive facility which has helped many realize their dreams. Home loans are these days available in easier terms than they used to be a few years back. The good thing is that it is available at lower interest rates than the loan on any other thing, and often is available for much longer repayment terms so that one can easily repay it while leading a normal life.

There are many banks and financial institutions offering home loans these days. One can acquire as much as upto 90% to 125% of the total property value as home loan. If you are the sole or part owner of the property, you can avail home loan for your share. Many people who even if have got sufficient money to pay for the desired house, prefer to buy it through home loan. This is because of low interest rate which it is often available at.

There are two types of interest rates prevailing in the market. They are Fix interest rate, and floating interest rate. Some financial institutions leave it up to the borrower to decide which type of facility he wants; while some other keeps this right with them only. If you get a deal finalized at fixed interest rate, the interest rate will be kept same throughout the entire tenure, which can vary from 3 to 30 years or so. While a floating interest rate changes every time with the fluctuation in loan market. It often changes when RBI suggests any change in the basic rates for banks and institutions. These floating interest rates might seem lower initially, but may be raised anytime, to any extent in future, depending upon the circumstances in highly volatile economy.

The volume of the amount you can borrow from any bank or financial institution for a desired property depends upon two factors: value of the property, and repaying capacity of the borrower. Value of the property is judged by an independent assessor whom banks or financial institutions might have appointed to do the job on their behalf. Sometimes bank ask the borrower to get the property evaluated by any certified professional. The repaying capacity of the individual is assessed by the proof of his income for last 3 or more years. The same can be presented in the form of income tax returns, salary slips, balance sheets, or bank statements of stipulated period. Sometimes people manipulate these documents to avail higher amount as home loans but this is not always a favorable tactic.

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