Home Loan Rates Guide For First Time Borrowers In India

Home loan rates always befuddle the first-time borrowers in India. This complex compact has a multi-level impact of the home loan EMI and borrower. So, first time borrower must take all the time necessary to understand all the facets of home loan rates in India well enough. It will have a vital influence on their EMI as well as the cash flow available for the monthly expenses. So, here is what first-time borrowers need to know about home loan interest rates.

Types of home loan rates:

There are three types of home loan rates in India.

* Fixed
* Floating
* Hybrid

Current hot favourite among borrowers in India is floating home loan rate. But, every borrower should take time to analyse his or her own financial situation and choose the most suitable option. Therefore, you will need to know their advantages and disadvantages well.

Pros and Cons of home loan rates in India:

First of all, first-time borrowers must know that these merits and demerits are time sensitive. They are based on the rules and regulations applicable today. They can change tomorrow and so can their benefits and limitations. So, floating home loan rates offer the lowest rate of interest. In addition, it is much easier to prepay loan with 0% prepayment rate. Hybrid rates drag behind as a part of the contract does include fixed rate of interest. But, the biggest challenge is that very few understand this relatively new form of housing loan interest. Fixed home loan interest rates have the highest rate among the three. Additionally, a borrower will need to pay a prepayment charge. So, it can be considered a suitable option, who can afford to pay extra for the security of fixed rates.

Little secrets first-time borrowers don’t know:

A lot of borrowers plan to choose floating housing loan interest rates right at the top of their mind. But, first-time borrowers do not know some hidden secrets of home loans. Understand them today and take efficient decisions tomorrow.

* Floating home loan rates will change with the fluctuation in a base rate.

* The rules and regulations applicable to home loan interest rates can change very easily.

* The best home loan rates in India will be useless to you if the home loan EMI is more than 30% of your monthly income.

* Over-obsession over floating rates of interest is unfounded. Numerous factors can influence home loan EMI and lifestyle. You need to make well-informed choices. Understand the implications of terms and conditions. Then enter this long term contract carefully to protect your financial interest.

Understand the basics from this guide. Now you can move onto more serious documents for a further research.