"Sharp MCLR Cut brings relief to the home loan borrowers" read one of the news posts. On top of it, the senior management of the banks appealed existing home loan borrowers to shift to MCLR to take advantage of MCLR cut. I received large no of queries on my blog on how to take benefit of MCLR cut. In certain cases, wherein i suggested the readers that they will not be benefited immediately, i received some angry reactions :). The readers thought that i am trying to mislead them. But once they approached the bank and clarified the points shared by me, their apprehensions were gone :). Let me ... Read More
Home Loan Conversion Fees – 7 Myths Every Borrower Should Know
Home Loan conversion fees is one of the mysteries for home loan borrowers. I receive multiple queries wherein borrowers paid Home Loan conversion fees multiple times but still their home loan interest rate is more than the interest rates offered to the new borrowers. I have covered this topic in my post, Why higher interest for existing home loan customers? The problem here is that existing borrowers have NO other benchmark to compare. I also agree that home loan interest rate offered to new borrowers should be the benchmark for existing borrowers. Let me share an interesting case in this ... Read More
Why Banks Are Forcing Existing Home Loan Borrowers To Switch to MCLR
In recent past, some of the readers of this blog posted queries on a switch from Base Rate to MCLR (Marginal Cost of Funds based Lending Rate). The queries were similar in nature i.e. credit/loan manager of the bank suggested them to shift from base rate to MCLR. These are the borrowers who availed home loan before 1st April 2016 linked to base rate. The home loans availed on or after 1st April 2016 are by default linked to the MCLR. Therefore, this post is relevant only for borrowers whose home loan is linked to the Base Rate of the bank. It is observed that the loan manager of the banks ... Read More
Joint Home Loan – 5 Most Common MYTHS
Joint Home Loan is one of the best-marketed product by banks and HFC's. Through Joint Home Loan banks hedge their mortgage risk. These days almost all the banks insist on Joint Home Loan even if the property is bought in a single name. Quite interestingly even if the wife is non-earning/housewife then also banks insist on Joint Home Loan. The biggest carrot to SELL Joint Home Loan is Home Loan Tax Benefits. I agree that if both Husband and Wife are availing tax benefits then it makes sense to avail Joint Home Loan else it's a BIG NO. Recently, one the readers of this blog complained to RBI ... Read More
Home Loan Tax Benefits – A Mirage or Reality
Home Loan Tax Benefits is one of the key reasons to avail home loan. In other words, it is a motivational factor to buy a property on home loan. In my opinion, it is more of a perception that may or may not be true always. This perception is so deep rooted in our minds that it has become a sort of universal truth. Whenever we decide to purchase a property through Home Loan, our friends and relatives remind us about the attached Home Loan Tax Benefits. The million dollar question is Have you did financial calculations on Home Loan Tax Benefits? Based on my experience i can say that in 99.99% ... Read More
Home Loan Eligibility Value – What is Your True Worth
Yesterday while watching TV, a commercial caught my attention. The commercial was by Aditya Birla Finance Home Loans - Know Your True Worth. The advertisement emphasized how you should find your true worth as a borrower for property purchase. In layman terms, home loan eligibility value should reflect the true worth of an individual. It helps the borrower to buy the dream house of his/her choice. Take a look at the commercial below: https://www.youtube.com/watch?v=rzq89PNXkRM In the past, I have shared a couple of posts on home loan eligibility value. In one post, How Home Loan Eligibility ... Read More
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