Mira is working in a multinational company for almost five years. She decided to apply for a home loan after getting her second promotion & a handsome increment. The lowering house loan interest rates encouraged her to get her own home, where she could stay with her family without any hassle of monthly rents, agreement renewal & other things.
She was planning to buy the home for a long time, so she squirreled away much money to make the down payment comfortable. The lowering interest rates were icing on the cake for her, so she decided to move ahead with the plan of purchasing her own house.
Before selecting the property, she decided to choose her lender and get her home loan per-approved. After comparing the house loan interest rates of various lenders, maximum tenure for repaying the loan & their terms & conditions, she selected her lender.
The lender which she selected offered her home loan advisory solutions. It helped her to choose the property from the authorized builder network project, which had affiliation with the lender. After selection of the property, the next step was getting her loan approved. While submitting the application, she had to select from the available home loan interest rates, which were:
- Fixed home loan interest rates are constant in nature, if the borrower opts for this rate then she/he gets around twenty years or more to repay the loan amount. For the whole tenure the rate is fixed and is unaffected by the market fluctuations & government policies. It is higher than the adjustable rates.
- Floating rate of interest is adjustable in nature; it keeps on fluctuating with the market condition & government policies. The borrower gets almost thirty years to repay the debt. Floating rates are lower than the fixed rates.
- Semi-fixed rates are a combination of two types of interest rates. In the initial years the rate fixed for a stipulated period, after which it automatically converts into the adjustable rate of interest.
Mira opted for semi-fixed rate of interest, as she was having much time to repay the debt and was in the initial phase of her career. Though she had steady flow of income, but was not confident enough to take risk with the fluctuating rates. She was ready to pay more in the initial phase, than adjust with the fluctuations.
As the home loan interest rate she opted for was a combination of two types of rates. After five years of fixed rate it would be converted to adjustable rate. She chose five years of fixed house loan interest rate because after five years she expected a handsome income to adjust with the fluctuations, in case the rates increased.
She got a concession on the interest rate for being a woman borrower, which she further got negotiated owing to her impressive credit score & affiliated property.
She paid the margin money, after which her loan amount was disbursed by the bank to the builder. Once the formalities were over she got the keys to live in her own house with her family.
Before getting the home loan and joining the bandwagon of borrowers, take the important decisions of selecting lender, house loan interest rates & tenure. It’s better to do online research & get help from the home loan advisories like Mira, before filing your home loan application.