When applying for a house loan balance transfer, the new lender/bank evaluates it similarly to a new home loan application, but with specific differences. This is because transferring your home loan balance to another bank is a form of refinancing your existing home loan, also known as ‘home loan takeover.'
A home loan balance transfer aims to save money on interest by transferring the loan amount to a lender or bank that offers a cheaper interest rate on house loans. When interest rates in the economy fall, not all lenders lower interest rates in the same way for various reasons –– which is why a home loan balance transfer might be a good alternative, especially if you're unhappy with your current loan. Get your home loan in Delhi through Finway.
Benefits of Refinancing a Home Loan
Interest rates are being reduced from high to as low as 8.05 per cent each year.
Depending on the rate difference, balance tenure, and EMI, monthly EMI can be reduced by 5%.
Option to take a top-up loan at the same rate as your house loan (8.05 per cent to 8.8%) if you meet the eligibility requirements and have a low loan-to-value ratio.
Another lender may provide lower interest rates and other benefits, such as no processing fees. You can choose between an intelligent saver home credit facility and a max gain facility to save money on interest.
For an easy experience, consult Finway for a home loan in Delhi.
Eligibility
If you have an outstanding home loan with one bank, you can opt for a home loan balance transfer. Age, income, work history, and loan-to-value ratio are the essential eligibility criteria. Other major eligibility requirements for refinancing a house loan include:
Application
The new lending institution will need a new house loan application. Some house loan firms allow you to complete the application procedure online.
Records must be submitted, including photographs, bank statements, photocopies of identity and residence evidence, and income documents. The following documents will also be required:
Existing Loan Foreclosure
For the existing debt, foreclosure procedures must be followed. To get the original papers from the prior lending institution, the new lending institution may pay the outstanding principal amount. A new loan agreement has been signed. The borrower and the new home finance institution engage in a new loan arrangement. Before you undertake a Home Loan Balance Transfer, keep the following considerations in mind.
1) Justification for Transfer
Most borrowers switch their home loans from one lender to another due to a considerable disparity in the rates charged to previous clients by their bank/housing finance business vs the rates charged to new customers.
2) Examine the rate
Check to see whether the bank you're planning to switch to has already raised its rates in response to the recent rate rises. If you switch to another bank and it hikes rates soon after, your move will be for nought. Only transfer if the interest rates paid by your present bank and those provided by the new one differ by at least 50 basis points—guaranteed low-interest home loans with Finway.
Conclusion
Transferring your house loan amount or refinancing is advantageous since it lowers your EMIs, reduces your total interest outgo, shortens your home loan term, improves your credit score, provides better service, and so on. Finway provides the best low interest home loans,
Before making a decision, make sure the advantages exceed the disadvantages. When considering a house loan amount balance transfer, it's critical to evaluate aspects like interest rate, outstanding home loan amount, residual home loan duration, transfer fee, and service.
