All about home loans

After a person is done with the identification of the property the next big challenge for the customer is to go for home loan. There are a lot of home loan schemes available on the market and that is why sometimes a customer can be confused about what find of loan scheme to go for or which one will be more suitable for him. The lenders not only provide loans for purchase of property but there are also several other kind of loan schemes.

Lenders provides various kind of home loans like for construction or buying a new home, home repairs and renovations, purchase of plots, against mortgage of property. There are bridge loans that are like a make shift arrangement between selling the old place and buying the new one.

There are home conversion loans for people who are moving homes, in this case the existing loan is transferred to the new home after calculating the extra cost of the new house and no repayment of the previous loan is required.

The other thing that a borrower needs to take care of before he applies for a home loan like cost of processing fees, pre-closure penalty etc. the tenure of home loan can vary from 5 to 15 years depending on the lender and primarily on the age of the borrower.

Then there are the interest rates types. Basically the lenders offers two types of interest schemes first is fixed and other is floating interest rate scheme but recently the lenders have started offering another kind of interest scheme known as teaser loan scheme where the interest rate is fixed for first few years and then it goes floating.

After that it comes to EMI, different banks have different loan calculators to decide the EMIs. Some lenders calculate interest on the yearly reducing principle where the principle amount reduces year wise but in some cases the lenders calculate interest on monthly reducing principle. It can vary from bank to bank but a borrower must go through all the conditions to analyze which one to opt for.