home loan

Home Loan Guide 2022: How Do Lenders Define Loans?

For potential home loan buyers, choosing a mortgage loan is an important step in their home buying process. With so many banks and financial institutions in the market today, choosing the right lender is not an easy decision. Often times, a borrower may be more inclined to choose the lender that offers the lowest interest rates. However, there are other important factors to be considered to ensure a comfortable loan repayment experience.

Emphasizing this idea, experts in a webinar organized by Housing.com asked: ‘How do the lenders and your mortgage loan deferral work?’ You have shared valuable information to help people make an informed decision about choosing the best lender and home loan tenure. (See the webinar on our Facebook page.) The webinar panelists included Sanjay Gairyali (Head of Business – Emerging Markets Home & Mortgage Finance, Kotak Mahindra Bank) and Rajang Stood (Head of Business – PropTiger.com). The session was moderated by Jhumur Ghosh (Editor-in-Chief of Housing.com News) and a co-brand of Kotak Mahindra Bank.

Where can I get a mortgage home loan?

Speaking about the importance of preparing a mortgage home loan, Garialli said: “A key parameter is the credibility of a financial institution. A mortgage loan may not be the only product a customer can request from a financial institution. It is Important to see if the lender offers visibility to multiple products, the customer can later change the tenure and rate, choose a reload plan on an existing loan, or look for another loan from the same company. So, while choosing a mortgage, don’t just look at the interest rate on the home loan.” Generally, one can choose to get a home loan from a bank where they are already a customer.

For repeat customers with a good track record, banks may also offer flexible options for future rates. It can be a private bank, a public sector bank or an NBFC that one can consider for a loan with a mortgage rate. In detail, it remains to be seen whether the company is able to meet the multiple needs of the long-term customer, he said. Highlighting the long-term relationship between the home borrower and the lender, Rajang Stood said: “Buying a home is one of the most important decisions in a person’s life. One of the important decisions in this regard is choosing the lender for the mortgage loan.

However, decisions about choosing a lender, especially for home loans and other financial products, may be made in future, but not separately. Firstly, another important consideration for borrowers is the loan amount for which they are eligible. , as decided by the lending institution, there are other things to consider, such as faster turnaround times.

Transitioning to a Digital Experience on the Path to Mortgage Lending

Focusing on the digital preparedness of financial institutions and banks, especially in the current pandemic situation, Jhumur Ghosh said: “Mortgage loan applicants do not want to go through a lot of paperwork and want the process to go smoothly. Today they choose banks that are digitally ready, which makes their lives easier when choosing a mortgage loan.” Gariyali agrees that banks are taking steps to make things easier for customers. He also highlighted emerging industry trends in lending mortgages and secured loan support visits, where customers seek personalized assistance and face-to-face interactions with their lenders.

According to Stood, in the past, homebuyers’ preference for digital media has increased in three to four years. “With regard to the pre-qualification process for credit, most of the customers prefer the online mode and. Financial institutions are focusing on innovation to provide digital experience to the customers. About 50% of the total home loan process is done online. If a financial institution can grant policy approval based on the information provided by customers online, the interest in closing property transactions increases significantly. However, the entire home loan process is not completely digital. and customers like it to be a useful part of the process.

What do buyers like?

Typically, real estate developers contract with financial institutions to provide mortgage loan solutions to their clients. Gariali notes that savvy homebuyers who are digitally aware and have access to information online prefer to talk to developers about property rates when weighing their options on their lenders, who do their best. Offers home loan options. Admitting that homebuyers view these aspects differently, Interest shared that many homebuyers prefer this type of linkage as it reduces their efforts to find a lender independently. Ghosh suggested that home buyers should keep their options open and take a decision after analyzing various situations. See also: href=”https://housing.com/news/tips-to-plan-your-finances-for-buying-a-home/” target=”_blank” rel=”noopener noreferrer”> your financial Tips For Planning For Home Buying

Will you opt for short term or long term loan?

Though choosing the right lender is one aspect of the home loan process that borrowers face, many are unable to determine the ideal home loan tenure. Keep in mind that while taking a loan for a longer tenure helps to pay off the long term loan, the EMIs are quite affordable. On the other hand, a shorter loan tenure will have higher EMIs. According to experts, maturity is an important factor when choosing a mortgage loan. Opting for a relatively longer tenure will help you get a higher loan amount for the same salary. The panelists suggested that choosing an appropriate mortgage loan term generally depends on an individual’s financial situation and needs.

Things to consider when choosing a mortgage home loan

According to experts, many homeowners consider taking a home loan as an effective option as it offers a variety of tax benefits. Home loan recipients are eligible for deduction for payment of principal and interest component and other tax benefits while taking a combined home loan. Experts recommend keeping these points in mind when choosing a mortgage loan. Sharing more about home loans, Gariyali talks about how lenders treat salaried and self-employed people differently while assessing their eligibility. “About 75% of the mortgage loan market is made up of salaried class clients and the remaining 25% belongs to the self-employed department. It is easier for the salaried people to qualify as they have a fixed income from their salary. In contrast, self-employed people For this, the organization has to go through the examination of verifying various sources of income and certain other aspects, which takes a long processing time on the part of the lender.”

Fixed Rate Vs Floating Rate

According to experts, some banks and financial institutions offer a fixed rate for mortgage loans for a fixed period. However, this can mean a premium over traditional floating rates, which may not make sense financially for borrowers. On the other hand, the floating rate does not depend on the external environment but varies according to the RBI repurchase rate. Under the current regime, experts believe that since home loans are tied to the benchmarks set by the RBI, this should give consumers the confidence to opt for floating interest rates. See also: target=”_empty” rel=”noopener noreferrer”> All About Fixed Vs Semi-Fixed Vs Floating Mortgage Loan

Pre-approved loans: are they beneficial?

A pre-approved loan is when a lender approves a loan for the borrower before selecting a property. According to Gharial, pre-approved loans can be useful to simply zero in on a property and ascertain one’s eligibility for the mortgage loan amount. Interest notes that pre-approved loans help prospective homebuyers by instilling a sense of confidence and familiarizing them with the entire home loan process. In response to how long low interest rates can last, Garialy discusses the effects of retail inflation and home loan interest rates. He added that interest rates may rise and borrowers need to assess the situation and decide whether this is the right time to take a home loan. interest indicates that.

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