The process of home buying involves a union of factors. Finding the right home, getting the due-diligence done to researching for the best home loan! An amalgamation of so many things, so which one will you have to give due importance? Sometimes people have the money for the down payment to buy their own home; however, the mammoth task of paying the home loan makes them delay the decision. Even though it is a significant amount that you have to repay to the bank, you can still pay it off earlier than the tenure. Pay lesser interest and have your home loan secured. Here are some ways of making home buying and repaying the home loan EMI process easy.
1. Take the Loan for a Shorter Duration: These days there are options for taking home loans for an extended period like 30 years. However, in such a scenario the interest charged will increase drastically, and you will end up paying way extra for that house. While, if you take a home loan for 15 or 20 years, the EMI may increase marginally for now, but you will benefit by paying less interest. The EMI calculation is from the principal amount, and after its recovery, the payout will decrease.
2. Make EMI’s your Priority: As far as possible, try to schedule the EMI closer to your salary date and make payment of EMI your priority. Instead of splurging that bonus at the end of the year, try to put the extra amount in the EMI account. Besides, make it your goal to pay at least one additional EMI every year. This way you will be able to pay out the home loan sooner, and the principal amount will also keep reducing, lowering interest cost as well.
3. Increase your EMI Annually: Each year when you get your appraisal, increase the payout of your home loan EMI. If not complete, at least channelize half of the increased income towards your EMI account. This will help you to reduce the interest on your home loan and you can even pay it off faster.
4. Refinance the Home Loan: If you have opted for a fixed home loan as against the floating one, there will be fluctuation in home loan interests over the year. Besides, the government may announce new schemes and reduce the interest on home loan. You should keep a watch on it and try to take a credit from another bank at a lesser interest rate. However, do a proper cost-analysis by taking into account the legal fees involved and penalties if any, and then go ahead with refinancing the home loan.
5. Learn about Marginal Cost of Funds based Lending Rate (MCLR): All the banks have moved to MCLR post-April 2016. It allows borrowers to benefit from the changing rate of interest. Check with the bank, do a cost-analysis as they may levy a conversion fee of 0.5% on the outstanding amount. If it works in your favor, then ask the bank to switch your loan account to MCLR.
There are a lot of banks and financial institutions offering home loans. It would help if you try exploring different options and then choose the one that provides you credit at the lowest interest rate. Go ahead, take the plunge and gift your family the luxury of living in their own home. If you are still researching on the project in a city that can be ideal for your family and from your career point of view, then Bangalore can be a great fit. Growing at an exponential pace, it offers great career options, good academics and amazing weather all year round. Even regarding infrastructure and housing facilities, there are many options.
One such housing option that you can trust when it comes to your family is Valmark. Serving the families of Bangalore for decades, we know the value of a home for a family. If you are looking for high-rise living experience with amenities a galore, then check Valmark Orchard Square property in south Bangalore. It’s exquisite and practical design will make you fall for it in no time. Besides, you will not have to worry about finance. With our projects, you can get loans from the country’s leading banks and our team will be there with you throughout the process. Learn more about Valmark homes here and make your own home dream a reality.