It Is Easy To Apply For Online Mortgage Loan

Before financial crisis people would felt free to walk into the banks even if they had bad credit rating to get their loan approved by banks. But now this can be no longer possible as the banks have increased their lending requirements in order to get the mortgages approved. There was a time when state mortgages were very popular but not anymore. You have to go through strict criteria to get your loan approved. These days you can apply for online mortgage loan which is a very easy and efficient way to get loans.

In case you have bad history like poor credit or past bankruptcy so you have to provide a lender with some extra amount of money for risk that he is taking by approving your loan. Usually people with poor credit rating have to face more defaults on loans and banks offsets the risk by charging more interest rate and fees. There are some lenders who take advantage of those with poor credit rates so for them it's good to shop around for a while before taking any decision.

If you choose short term mortgage in order to pay off the loan faster, then, you will have to pay higher monthly installments. Fixed rate home mortgages however are easy to pay as they are long term and installments that you pay are also less in amount.

An interest only mortgage loans also has many benefits. If you are finding difficulty in applying for online mortgage loans because of the rise in the prices of houses then interest only Loan on Property may be the only answer. There are many who do not know about interest only mortgages but they are getting increasingly popular day by day. Before considering they go through all the facts and details.

Mortgages with flexible rate of interest can be very tempting for a customer especially when the rates are low. But at the same time they are very uncertain. By opting for fixed rate mortgages one has to pay monthly payment which remains stable regardless of changes in the interest rates. All you need to be is little bit cautious and intelligent in your research, and you will be able to find a genuine online mortgage loan which will meet your all requirements and allow you to be a proud homeowner. If still confused, take help of professional expert who are 24*7 ready to help you to get mortgage loan. Check out the many online sites offering mortgages. If you have low credit scores it is possible to obtain a mortgage loan through traditional methods but unfortunately this service is not yet available through the online mortgage loan.'

[Source: http://www.sooperarticles.com/finance-articles/mortgage-articles/easy-apply-online-mortgage-loan-916332.html?]

Tips to Reduce Interest Burden on Home Loans

The biggest expenditure for most individuals is the monthly installment paid towards the loan taken for buying a home. This expense accounts for approximately 30% to 40% of a person's income. This makes it difficult for users to invest towards achieving other financial goals.

Reverse compounding effect

Investments earn higher returns when these are held for a longer period of time because of the compounding effect. Many homebuyers choose longer tenures with the objective of reducing their monthly outflows. However, when an individual takes a loan with a long duration, this phenomenon is reversed. They pay more interest in the longer period. In comparison, when a borrower chooses shorter home loan tenure, the principal repayment occurs quicker. Because interest is calculated on the outstanding principal balance, higher repayment reduces the absolute servicing cost.

Here are two ways to reduce the interest burden on existing property loan

1. Refinancing

Borrowers may consider refinancing the outstanding loan amount to decrease the home loan interest rate. With a lower rate, the monthly installment reduces, which may result in huge savings over a period of time.

Here is an example to understand the benefits of refinancing. As per the home loan EMI calculator, if the interest rate reduces from 10% to 9%, the monthly installment decreases from INR 45,435 to INR 41,960 on a loan of INR 50 lakhs. Over a period of 25 years, the total savings on the interest outgo is approximately INR 10.42 lakhs.

However, while refinancing, users need to consider pre-payment penalty, legal charges, and other fees that may be levied by the original lender. These additional costs may reduce the actual interest savings.

2. Repay principal faster

Repaying the principal amount faster reduces the interest burden on the borrowers. Individuals are advised to pay a higher amount than their regular equated monthly installment (EMI), which will reduce the principal amount and save interest.

Here are three ways to repay the principal faster

Pay an extra EMI

Borrowers may use their annual bonuses to pay an extra EMI over and above the existing installments. Using the above example, if an individual pays an additional EMI of INR 45,435, the home loan is fully repaid in 19 years and 1 month. The interest saved on the balance duration is over INR 62 lakhs.

Increase annual EMI

Most salaried individuals receive an annual increment to their incomes. Borrowers are recommended to increase the EMI on their loans by a certain percentage. This could be based on the increase in the average annual salary. If a borrower increases the EMI by 5% each year, the loan of INR 50 lakhs is repaid in less than 13 years. The home loan interest savings in this example is almost INR 45 lakhs.

Combine both

Borrowers may choose to pay an extra EMI each year as well as increase it by a certain percentage. When both these options are adopted, the entire home loan may be repaid in 11 years and 8 months, which translates into interest savings of roughly INR 39 lakhs.

Reducing the interest burden is beneficial; however, it is important to choose an option that will not result in financial distress. Borrowers must opt for an EMI that they are able to pay without facing liquidity crises. Failing to pay timely installments has severe outcomes and therefore, avoiding this is absolutely crucial.

[Source: http://www.tatacapital.com/blog/home-loan/tips-to-reduce-interest-burden-on-home-loans.htm]

How to manage your finance with the property

            Loan Against Property

How Loan Easy Simplifies Online Loan Comparison & Calculating Home Loan EMI

We hate online login/registration as much as you do. All known websites gather user data by voluntary submission of personal details. However, some of the existing Loan Comparison Portals require you to mandatorily key-in all your personal contact details before revealing any valuable information. EMI Calculation and Home loan comparison is devoid of any login information from the end user and is completely based on self-solicitation.

There are very few inputs required in reality, to give a comprehensive loan comparison across all banks. Loan Easy is simplifying the process in to a three input method:

First Input – Net Monthly Income

This is your monthly take home salary or the in-hand salary. The field works out your Loan Amount Eligibility and EMI Repaying Capability, and then presents a comprehensive list of Loan information for all banks and the related Rates of Interest.

Second Input – Existing EMI

This input captures one’s ongoing loan repayments for any other loans like Personal, Educational & Auto Loans. Your loan eligibility is affected by existing installments/EMIs. Banks only consider a part of the Salary minus Existing EMIs, as your repayment capacity. If you do not have existing EMIs, Well Done!

Final Input – Select Loan Period

The retirement age is considered as 60 Years. If you subtract your present age from the retirement age, you arrive at the maximum loan tenure available to you. Pensioners are considered till 70 years of age. The longer the tenure, the lesser is the EMI. It is advisable to select longest tenure and to plan for early repayments.

How to Interpret the Given Data

1). Estimated Home Loan EMI

This information Calculates home loan EMI payable to the bank on a monthly basis. You can compare loan offers from all banks; sort them from lowest to highest EMIs, using the arrow buttons. The EMIs vary due to different interest rates of banks. It is advisable to choose an EMI amount that best suits your pocket and your requirements.

2). Interest Rates

The current Property Loan Interest Rate of all banks is displayed with the option of sorting the lowest from the highest. The calculated home loan EMI is worked out on the average of minimum and maximum interest rates across all the banks. What the banks market and actually offer to individuals depends solely on their credit history. Each case is then allotted a personalized interest rate.

3). Processing Fee

Processing fee is charged by banks for sanction or approval and credit history checkup. Processing fee varies from 0.25-1% of loan amount or not exceeding predefined capped value. Using the table above you can compare lowest to highest processing per bank. Negotiating with banks always brings down the processing fee. The banks will not bring the processing fees down if you don’t ask for it.

[Source: https://loaneasy.in/emi-calculation-home-loan/]

More and more Indians with loans against property are failing to pay back on time

A new bad-loan problem is brewing in India.

Borrowers in Asia’s third-largest economy who have taken loans against property are increasingly falling behind repayment schedules. Over the next four quarters, these delinquencies could rise by as much as by three times over those in fiscal 2014, according to a study by India Ratings and Research, a credit-ratings agency.

The delinquency rate—the portion of loans on which interest or principal payments are due for more than 90 days—could inch above 5% over this period, the study added.

The loan against property (LAP) is a high-risk segment for most banks and non-banking finance companies (NBFCs). The size of the loan is usually bigger than a traditional one, and the Property Loan Interest Rate is significantly higher. People who typically borrow do so to expand their business or to start one. Most borrowers use LAPs during distress to pay off another loan or to meet urgent expenses.

The LAP market is worth some Rs2.5 lakh crore, and a large chunk of borrowers comprises micro, small, and medium enterprises (MSMEs) with limited financing opportunities. The delay in payments may well be a result of the cash-flow crunch these enterprises are currently facing. Some 1,000 MSMEs holding debt of less than Rs10 crore, which India Ratings investigated, had single-digit revenue growth in fiscal

Meanwhile, lenders are also being increasingly careless, the study indicated.

To meet targets, many lenders are accepting non-residential properties as collaterals—these assets are valued lower at the time of liquidation, compared to residential properties. Besides, property valuation is often outsourced to a third-party value and, hence, may have discrepancies.

Already most Indian banks are battling bad loans, which are eating into profits. Former Reserve Bank of India governor Raghuram Rajan had introduced a framework to free the banking system from these toxic assets. But there’s still a lot left to be done. This new problem among NBFCs and banks alike will simply add to the burden.

[Source: http://qz.com/802023/more-and-more-indians-with-loans-against-property-are-failing-to-pay-back-on-time/]

Are you eligible for a home loan? Top 4 points to know

ACQUIRING a home loan can be an arduous task as each lender has its own criteria for evaluating a loan application. Here are a few factors that almost all lenders consider.

Disposable income

Your disposable income is one of the most important parameters for vetting your home loan application. It is derived by deducting your statutory deductions, monthly expenses and existing EMIs from your gross income. A lender will expect your loan EMI to be within 40% of your monthly disposable income. However, some lenders consider your gross income for judging your home loan. If your disposable income is comparatively low and you wish to opt for a higher loan amount, you may consider adding working members of your family, like your spouse or children, as co-applicants.

Credit history

Lenders judge your creditworthiness through your credit score. A low credit score may reduce the chance of getting a home loan or can lead to a higher interest rate. Don’t apply for loans with too many lenders within a short period as it can pull down your credit score. CIBIL classifies a credit score of over 770 as a good credit score. However, other credit bureaus may have different scoring patterns and yardsticks for a ‘good credit score’.

Compliance with legal norms

Lenders verify details of the property for which you are taking the loan. They provide loans to house properties that have been cleared by local authorities and have clear and valid title. Some banks offer special loan packages on properties listed in their database of approved projects. Properties in their database are considered reliable as they do the due diligence of the projects themselves.

Occupation stability and continuity

Lenders prefer to give home loans to people with a stable job or income source. They also consider how long you have been working with your present employer. Switching too many jobs during your career may create a negative impression. Government and PSU employees are the most preferred ones followed by doctors, chartered accounts and employees of top private-sector companies.

Age of the applicant

Your age plays a major role during the approval process of the home loan. Although home loans carry maximum tenure of 30 years, banks prefer borrowers to finish repayment by the time they are 60–70 years of age. Thus, people in the 25–45 age groups are preferred as they have more than 20 years of their working life to pay off their home loans.

Generally, public sector banks are the most stringent when it comes to loan approval process. However, their Property Loan Interest Rate is also the lowest. The reverse is true for housing finance companies and other NBFCs. Approach the NBFCs if bigger banks refuse to finance your home purchase. You can transfer your home loan later. While most of the factors that banks consider have to do with you, the legality of your house property is something that is beyond your control.

Thus, always ensure that the property has all the required clearances before making the final decision.

[Source: http://www.financialexpress.com/personal-finance/are-you-eligible-for-a-home-loan-top-4-points-to-know/414658/]

Checklist for first-time Buyers

Buying one’s first home can be a trying experience. Getting confused or feeling lost is only natural, unless you have a ready reckoner close at hand. Today we take you through all the information you need to have when you are buying your first home.

Get online

In this highly digitized world, the search for everything from groceries to gadgets happens online and real estate is no different. Most buyers in the 25-35 age group begin their search online. Has made it easy to filter searches according to your requirements, budget, and location preferences. It is a good idea to go through all of these portals and shortlist properties that you would like to see personally.

Once you have zeroed-in on the properties that you would like to visit, probe further and read up on the developer, its reputation.

Check out things like delivery time, payments, and delays it has been responsible for. Use your networking skills to reach out to recent buyers in the properties that you are interested in and get their opinion as well.

Making the choice

While visiting the shortlisted properties do a thorough check of the neighborhood.

If you have young children or hope to have a family in the near future, check out education facilities in the area. Proximity to hospitals, schools and colleges, market areas, amusement and entertainment options should be considered. The other important factor to consider is the distance from your workplace, railway stations, and airport.

Budget requirements

The first things you need to remember while buying your first property is that you should not under any circumstances overshoot your budget.

Its human nature to be aspirational, but make sure that your loan does not become a burden for the rest of your life. Ideally if you are planning to buy a house, you should have been saving up for its down payment at least three to five years ahead.

For young people who harbor dreams of owning a home, start investing in equities in order to get the best inflation adjusted returns. If you do not have the time or expertise to invest in equities by yourself, it is best to take the mutual fund route and link your investments to a goal like down payment of your first home. This will keep you focused on your goals and help you make disciplined investments towards reaching your aim fruitfully.

While saving or investing for a house, you also need to bear in mind that you need to maintain a good credit history as your credit score will be taken into consideration, when the lender assesses how credit-worthy you are.

Maintain a good track record of servicing your previous or current loans and make it a habit to repay all your credit card outstanding within the billing cycle.

EMI factor

Further, when you are taking a home loan, make sure that its EMI does not exceed 40-45 per cent of your monthly income. Aim to increase your EMI repayment over the tenure of your loan as your capability rises with an annual increase in your salary.

Maintain a contingency fund that will take care of your Mortgage Loan EMI for at least 3-6 months in case your cash flow is interrupted by an emergency.

Paperwork

Once your financing needs are taken care of, it is time to be aware of your rights as a prospective home buyer. The recently passed real estate Bill safeguards your rights as a consumer and ensures efficiency in all property-related transactions with the mandatory registration of all projects with local governing bodies and the establishment of the Real Estate Regulatory Authority (RERA) that is expected to ensure timely completion and hassle-free handover to the end customer.

[Source: http://www.thehindu.com/todays-paper/tp-features/tp-propertyplus/checklist-for-firsttime-buyers/article9170022.ece]