Nothing is more lucrative than the option to pay your home loan for less interest. You can also benefit from a top-up facility if you move to a home loan from lenders offering low-interest rates. So you can obtain the top-up amount without any additional documentation if you have transferred an existing loan.
However, Home Loan Balance Transfer should not be taken lightly, and you should remember some points before going for a home loan transfer.
Do you qualify for a home loan transfer?
The first step is to read the terms and conditions of your new loan carefully for policies that can get you lower rates and advantages. You may not be able to move the debt from one lender to another by some banks and policyholders. Then you have no other choice than renegotiating with your loan company.
Check the transfer costs and if it’s worth it
After a lower interest rate, you should not just leap to conclusions. There are some charges for the conversion of your home loan, including processing, application charges. Also, the majority of banks charge a transfer fee to be paid to the existing and the new lender where the loan is transferred. Ensure the costs involved are smaller than the amount of interest that you save.
Take into account the sum of your loan term
Switching in the second half of your loan is also considered unsuitable since much of the interest has already been paid out with EMIs. If you intend to transfer the home loan, make sure that you transfer it as early as you can in the tenure of the loan.
Some lenders give the option of loan repayment tenure for up to 300 months. Furthermore, you have the opportunity, without added costs, to pay the loan in part or prediction.
Make sure that you have all the documentation needed for the transition
If you want to move your home loan balance, you have to send your new loan provider a consent letter or a No Objection Certificate from your existing lender. The bank will only authorise your loan to the old lender after receiving this certificate, and the old account will be locked. All the property records are given to the new lender.
Before you plan to change, check the reviews for your new lender
Several banking institutions are available on the market to lend you money at lucrative rates. However, before you pick the move, you must learn about your new lender. A home loan is a long-term responsibility, and you will have a long-term contract with your current lender, so make sure you check the customer satisfaction level of your new lender. Check ratings and reviews to ensure the new lender is reputable.
Carefully check the new loan terms and conditions
Understanding that not all policy papers are the same is also significant. Read the fine print so that you not only glance at the low-interest rate and ignore clauses.
Whereas when cheaper interest rates are present on the market, nobody wants to pay different interest rates, all of these considerations should be weighed very carefully before deciding for a home loan balance. Make sure you profit from the transition in the long run.
Is PMAY for resale houses applicable?
The resale flats shall be entitled to a PMAY subsidy. If the claimant has no house under his name and complies with other conditions of eligibility, as stated in PMAY. In some cases, the bank may deny your request by claiming you already have a house, but they submit your case to the National Housing Bank (NHB) with the documentation. As part of the loan payment, the amount of the subsidy is changed.
Who is eligible?
Three groups: The Mid Income (₹six to ₹ eighteen lakhs), EWS (₹ three lakhs) and Lower Income groups ( ₹three to ₹ six lakhs) are all qualified for the PMAY housing scheme by 2022. The MIG and LIG categories can be used for the Credit Linked Subsidy Scheme (CLSS) component.
Slum inhabitants: A slum is an area of between 60 and 70 families, or around 300 individuals residing in dwellings with low structure. These areas are incredibly unhygienic and lack sufficient housing, water and sanitation. People living under these conditions can apply for the Pradhan Mantri Awas Yojana housing scheme by 2022
How to verify the status?
Steps to verify your status
- Log in to the official PMAY website – www.pmaymis.gov.in.
- Choose the tab “Citizen Assessment” at the top of the screen.
- Then, pick the ‘Track your assessment’ on the menu.
- To watch the status of your PMAY submission, choose one of two choices.
Conclusion: Having a complete understanding of some points is beneficial for borrowers as they can make an informed decision about home loan balance transfer. It helps you save extra and avoid extra charges.