New player in the Home loan segment

After the two years gap, Hudco is all set to enter the home loan segment again. “We are planning to launch our retail home loan product Hudco Niwas during this year,” said the Hudco Chairman and Managing Director, Mr. V.P. Baligar.

The company is waiting for the board approval. The company recorded net profit of Rs. 550.03 crore in the last year and a growth of 14% in this fiscal with net profit of Rs. 629.18 crore.

With regard to the asset quality, Mr. Baligar said, the gross non-performing assets of the company stood at 6 per cent while the net NPA was 1.35 per cent at the end of March 2012. “We have sanctioned a total loan of Rs 20,511 crore, in 2011-12, which is the highest so far,” he added. The company’s focus will be reducing NPAs and recovery in this fiscal.

Prefer Floating Interest Rate Home Loans

With the inflation moving up and slowdown of the economy, owning a Dream Home has now become a dream not easy to turn into reality. Even if all the documents are in place, the whole procedure completed and loan is approved by the bank to fulfill your dream, you will be one step away. It is difficult to decide whether to opt for fixed interest rate or floating interest rate.

In the Fixed rate, one has to pay fixed EMIs whether the market goes up or down. You can’t enjoy the benefits of decreased lending rates when market goes down.

While opting for floating rate, if the lending rate decreases, EMIs goes down and vice-versa follows.

Both have its pros-cons but floating interest rate is always lower in the initial years of loan. So it is better to enjoy low EMIs for first few years.

Removing penalty on foreclosure of Home Loans unlikely to affect Banks

RBI stopped prepayment penalty on home loans since last week. “I welcome this decision because home loan is a national priority and customers stand to gain,” said Mr. M. Narendra, Chairman and Managing Director, Indian Overseas Bank.

“The customers were chased for retail loans earlier and there was enough liquidity in the market. But today, that situation is not there, and the costs are not cheaper for any bank. Hence, the waiver of penalty will not trigger any big shifts in the market,” Mr. Narendra said.

This move has tempted customer for foreclosure of loans and opt for loan-swaps scheme offered by banks often.

According to experts, very less proportion of customers opt for foreclosure. Hence, this step will enhance competition among banks and better setting up of floating interest rate home loans.

Home loan EMI calculator makes you search easy to explore trustworthy bank

Are you looking for the bank with the least interest and hence the lower EMI on the home loan to be availed by you Then you should visit each and every bank’s website and look out for their Home Loan EMI Calculator. There would be provided with ample amount of options to fill I which will make your understanding more clear on how you can get rid of your home loans easily and what will be the total amount you need to pay each month if you opt to avail loan for a definite amount of time.

Each bank’s website lists the Home loan EMI calculator so that you should have clear understanding on which bank provides you an option for lower EMI and that too at an interest rate within your reach.

Summary:  Home loan EMI calculator provides you an option of ease to go with the trustworthy bank

Home Loan is no more a Nightmare

Are you also one of them who is looking for Home loan but tends to get scare with the complexities involve behind it? If yes, you need to revisit the latest trends happening around this domain since getting the loan whether it is required for home equity or mortgage stuff is no more a complicated task. No doubt, everyone dreams to have the home of their own but due to the cost factor involved with the same, people tend to take a step backward.

Banks are always there to fulfill the needs of a luxurious home that you have been waiting for years. Get yourself familiar with the different banks and their policies related to providing home loans. Your dream home is just a step away. Go and chase your beautiful house with minimal formalities required.

Summary: Home loan is no more considered a nightmare and complex activity when it comes to own a house of your own.

Important to know for a home loan seeker

A home loan includes great deal of intricacies which are often include arcane terms and hence making it difficult for a commoner and even difficult for the first time borrowers. Most of the loan applicants do not take the matter seriously and hence are likely to suffer set backs in the later part of the loan tenure.

While sanctioning a loan, lenders are more concerned about the future aspects as they do not want a customer who would default on his loan. To keep things simple they want to make sure in the beginning itself whether the applicant would be able to manage his loan or not, if an applicant does not satisfy a certain criteria then the lenders reject the proposal straight away.

To avoid rejection an applicant must check his loan eligibility before he applies for a loan, which in turn is decided by a number of factors. Loan eligibility of a particular borrower is the maximum amount that he can borrow; it mainly depends on the income of the borrower.

A borrower must have an idea about his monthly expenses so that he can get an idea about the amount that he can pay as the monthly installment for his loan. An applicant must borrow an amount which he can repay easily and it also helps him to avoid the risk of rejection.

Credit score is also an important factor, lenders wants the applicant to have a high credit score as it gives the lender and idea that the person does not default much and can expect that he will not do so with him as well.

The nature of job can sometimes also play a deciding role, a person working with a reputed company is likely to face less difficulty in finding a lender as compared to a person working with a lesser known company. Also, if a person is a constant job hopper then it can also add to certain disadvantage for the applicant.

Prepayment penalty of home loans likely to go

Finally, after initial resistance, lenders have started to waive the prepayment penalty in home loans. The banks used to levy penalty on the customer that borrowed money from some other lender to make the prepayments. However, such a penalty was not applicable to a customer who is making prepayments solely through his own resources.

The Reserve Bank of India was never in favor of this practice which was followed by majority of the lenders. Setting an example for the other lender, the largest lender in the country State Bank of India earlier has waived the penalty for the new customers and now has exempted the existing customers from the penalty.

“Banks have already agreed, but they are not issuing the guideline (to their branches) that you cannot charge prepayment penalty. We are not clear why banks charge the prepayment penalty,” said Mr. K C Chakrabarty, Deputy Governor of RBI.

The Chairman and managing Director of Punjab National Bank, Mr. K. R. Ramath said “If the regulator ultimately wants it, we need to fall in line. The prepayment penalty is not an avenue for bankers to make money, but a mechanism to recover costs due to mismatch in assets and liabilities. If RBI feels we have to do away with that, as bankers we will have to find a way to recover the cost.”

Some other public sector banks including Bank of India, Indian Bank and United Bank of India have also waived prepayment penalty on floating rate retail loans and more lenders are expected to joint the group soon.