The Benefits Of A Home Loan Balance Transfer
A home loan balance transfer is a mere financial service to avail certain advantages that you previously didn’t. Any smart borrower should be able to determine if the transfer is worth the expenditure. Otherwise, it may turn out to be a very expensive choice. This is a primary reason why financial experts do not suggest opting for a home loan balance transfer in the last 2 to 5 years of the housing loan tenure. Hence, every borrower must identify the vantage point for his or her Home Loan before considering a transfer.
Lower interest rates
When you opt for a housing loan with certain interest rates, you may gain an advantage by shifting to another housing finance company, which offers much lower interest rates. For most borrowers, who have made well-disciplined repayments, it can be a huge save. This kind of ideal home loan transfer is a profitable choice based on the home loan offer received. So, make your own calculation before making the decision, though.
No prepayment charges
A lot of borrowers do not want to pay the applicable prepayment charges for Home Loans with fixed interest rates. If the new housing finance company allows you to repay your loan in a lesser home loan tenure, you can save a substantial amount of interest. That can make it a smart move, based on the other costs incurred in the home loan transfer, though. So, you must calculate the savings against the expenses incurred before signing on the dotted line again. Most borrowers forget that this is the same home loan process – you will need to meet the home loan eligibility criteria, you must submit the documents required for home loan and you will need to pay the processing charges, service taxes etc. Hence, you must include all these expenses in your calculations.
Loan restructuring options
Some of the housing finance companies in India deny two types of home loan restructuring that you may need as a borrower; extra money for home renovation, and extending the home loan tenure as the current floating or fixed interest rates may be too high for easy repayments. Sometimes, housing finance companies fail to take this into account and make the necessary changes. It is perfectly alright to seek an alternate lender. Even if your current lender fails to offer the restructuring, you still will need to get a NOC (No objection certificate) from them, because no housing finance company will complete the home loan process otherwise. It is a much needed move; though, you must make it cautiously.
