Why You Should Review Your Home Loan Periodically?

January 10, 2022

When real estate prices are soaring high, thinking about procuring a housing loan is the most feasible option. It not only makes your dream come true but also offers a spectrum of benefits including tax deduction. Your role isn’t limited to making timely payments only since the market trends pertaining to home loans keep evolving. To take advantage of every inch of these trends you should keep reviewing your home loan periodically. Wondering how reviewing home loans can be beneficial? Well, here is a rundown of benefits you can avail yourself of by keeping an eye on changing trends.

Taking a housing loan is a big step and at the same time the largest financial decision of a lifetime. You have to pay the loan amount for years and you should never let it go with ease. Always keep an eye on changing trends and updated interest rates. Well, procuring home loans not only fulfills your dreams but also saves huge taxes. But it comes with a long-term commitment that seeks continuous inputs in the form of EMIs. In this tenure, the home loan undergoes a variety of changes such as new policies, changing market trends, changes in the interest rate, and many more things that are directly related to the availed loans. No matter at what stage you are within the repayment tenure, you can always access the associated benefits. All you have to do is be updated about them.

To have your own house in the skyrocketing real estate rates seems to be impossible. But thankfully the best home loans got it covered with various products. Now, you can enjoy that unbeatable joy of residing under your own roof through home loans. But, never put an end to the story just after availing of the housing loan. You need to keep everything within your knowledge and this can be accomplished with a timely home loans review.

Have you heard people saying you should periodically review your home loan, and you can’t decide why you should do the same? People usually think after procuring a home loan all they need to care about is timely payment. Well, there is a lot more to care about such as foreclosure, the requirement of a balance transfer, or the availability of a top-up loan. All such financial decisions are somehow dependent on period housing loan reviews.

Balance Transfer

Home loan interest rates are uncertain. Rates can be lower one day and after a period it can be skyrocketing. It is possible that you got a good deal while availing of your home loan, and over the years you run into lenders offering more favourable rates with superior services. It will be a thoughtless decision if you do not switch your lender in such a best-case scenario. When you get the best interest rate deals, without second thought switch to a new lender with the best home loan interest rates.

You must abide by advance specifically when you have a satisfactory repayment record in addition to an adequate credit score. All-important you just have to go ahead without hiccups with the balance transfer with requisites including KYC, documents for income proof, employment proof documents, papers of existing home loan, NOC, and repayment history. All these documents act as an eligibility criterion for a home loan and based upon the processing the balance transfer home loan is approved. The new home loan financier typically waives off the incurred processing fee, but it might vary from one provider to another.

When you periodically review your home loan, you get to know about the incurred interest rate by your current lender, new RBI charges, competitive interest rates. Based upon this information you can carry a home loan balance transfer.

Foreclosure

An unexpected windfall or an appraisal bonus adds to the foreclosure of a home loan. It can even help in making part prepayments of the outstanding housing loan amount. Part prepayments result in lessening the tenure and reduced EMI. The borrower can make part prepayments or foreclosure with utmost ease, by writing down an application for the same along with loan ID, proof of address in addition to loan sanction documents.

Several lenders charge a certain amount as a foreclosure fee. To know about the incurred foreclosure charges, go through the terms and conditions mentioned within the loan agreement. The key thing you should never skip is, apprehend the original papers of the mortgaged property from the lender at the time of home loan closure.

All you need to do is, keep reviewing your housing loan intermittently, know how much interest and principal component you are repaying, how much will you save with foreclosure, incurred charges, and then take the final decision of foreclosure. Before you make your mind up for foreclosing a Home Loan, don’t skip considering the tax benefits you are enjoying with the home loan in terms of principal payment together with the interest component.

Top-up loan

If the first-place sanctioned housing loan amount fails to meet the financial needs, you can pin your hopes on a top-up loan. To get a home loan top-up to fill the requisite form together with the KYC documents including PAN card, ID proof, address proof, income as well as employment proof.

Depending upon the opted lender, you may have to pay a processing fee. Consider a top-up loan similar to a personal loan in terms of interest rates. The top-up loan is provided with comparatively higher interest rates. Well, such loans are not limited to the existing lender as the borrower can avail loan top-up at the time of home loan balance transfer too.

Now you should be wondering what the roleplay is sporadically reviewing the home loans in availing top-up loans. Well, you need to know if you are eligible to procure a top-up loan or not. It is possible that at a certain time you are not eligible but after some time based upon timely payments and improved credit score you become eligible to avail the same. Thus, always consider reviewing your home loans systematically to grab ongoing benefits.

How Often Borrower Should Review Your Mortgage?

Well, life changes so does a mortgage. Nothing is certain. As a general home loan thumb rule, it is advisable to grant your housing loan a health check. Consider performing it once every year and ensure if it’s still the right product or right lender for you. We recommend doing the same at the beginning of the year as you can even know about the ongoing offers and new schemes. By looking into the best home loan deals, save a huge amount in interest charges.

Moreover, when you read about changed interest rates, through news, or other platforms, consider it as the best time to review your continuing home loan. The best part about periodic reviewing is there is no dearth of possibilities to choose from as the rates vary from one to another finance provider.

No matter what you are looking forward to, either a floating or fixed rate home loan or a split-interest rate mortgage, surely there will be a finance product that best fits your needs. The regular review of home loans is one of the best commitments you must be bound to. Such commitments help to know whether everything is appropriate as per the changed circumstances and fluctuating trends.

Ideally saying, the borrower must review the home loan annually. Not every year you will choose to change or shift your home loan yet considering the current market in addition to available products as well as the prevailing rate of interest is a good initiative.

To decide how often one should consider reviewing a home loan, stick to a couple of things:

Any Transpose in Borrower’s Circumstances

Any notable change in borrowers’ circumstances can result in unexpected changes. For instance, a loan that was suitable for you earlier isn’t fitting for you now. This can be due to a changed job or salary. Another reason can be overall debt on you increased due to purchase of a car or other appliance. Change in financial goals thought of foreclosure or part prepayment. All such things justify that you can avail better products with a suitable debt structure. To make such decisions you will need to be updated with basics and for that, you will have to review your home loan from time to time.

Drastic Change in Interest Rates

Haven’t reviewed home loans in the past 12 months? Do it now!! Late is better than never. Interest rates might have dropped which means you could be already paying EMIs induced with higher interest rates. A minute reduction in interest rate results in translating a huge amount into savings. Know existing and current trends, how much more you are paying monthly, and stick to balance transfer with lower home loan interest rate.

Why Should You Periodically Assess Your Mortgage?

With numerous banks and financial institutions, you can access a variety of home loan options. Well choosing the best home loan amongst available products, can be a bit daunting. But figuring out an optimum product offering a cost-effective solution to reduce mortgage repayments is crucial. It can be possible that the previously available products have become obsolete till now and have got better replacement through competitive products.

Consider having words with a mortgage broker. They can help you out in analyzing the current mortgage plan as per the recent RBI charges and current deals. You should never overlook such aspects as they can secure a hefty chunk in terms of monthly EMIs.

Whatsoever the reason might be, take out some time at least once a year to get in touch with the mortgage. He might have better leads for you and can help you out in making some extra savings.

Moreover, let us go through certain benefits you get while periodically accessing your home loan.

Possibility of Getting Lower Rate of Interest

It is possible to bring down the correlated interest rate by systematically reviewing your mortgage and switching to lenders offering a lower rate. Not only through a balance transfer, but you can even look into what the existing finance provider can do. Keep yourself informed to avail advantage of lower interest rates and other opportunities. Additionally, if you earlier opted for floating rates then opting for balance transfer is easier compared to fixed rates.

Improved Circumstances

In case of changing circumstances such as enhanced credit score, better financial stability, timely repayments make your application more considerable. With stable financial condition comes better products at lower interest rates. Doors of more lenders with better opportunities open up with improved circumstances. So, all you need to do is make timely visits to your lender and review your home loan and home loan interest rate.

Unexpected Changes

If any professional change encounters it reflects on the overall financial situation of the borrower. In such circumstances, you must review your home loan in advance. Based upon the expenses you may opt to reduce EMIs. Such changes put a negative financial impact on the borrower and result in the non-eligibility of loan approval. The only thing you can do to come out of these unexpected circumstances is to review your home loan and plan in advance. You can consider things that will not negatively alter your scenario keeping your current eligibility locked.

Introductory Interest Rates Do Come to an End

In numerous home loan disbursements, the borrowers are offered housing loans at introductory rates. When you initially access your home loan, you get the most appealing interest rates for the initial years. This tenure ranges from two to three years. Such offers are great for early years but soon come to an end. Moreover, with the switch of introductory offers to normal home loan products you have to pay a comparative high home loan interest rate. During the introductory period, try reviewing your housing loan at least two months prior to the end date. This will prevent you from moving towards a higher interest rate.

To Avail Better Housing Loan Benefits and Incentives

Who doesn’t dream of a great and stable future? People might not think of home loans loaded with bells & whistles, yet it’s an open door to fantastic features. For pre-eminent marketing and creating unique presence lenders offer cash backs/ incentives of a notable amount such as $4,000. Furthermore, you can avail of offset accounts, redraw facilities for easier and effortless management of finances.

Wrapping Up

Reviewing your housing loan becomes a cakewalk with a mortgage broker’s assistance. Reviewing home loans periodically with a mortgage broker, put in your knowledge everything around which the home loan orients. Know your current market trends before jumping into unplanned decisions. Compare versatile options as per today’s trend and make optimum decisions to save a huge amount. Get flexible financial products as per your enhanced eligibility. Reviewing home loans periodically helps in making planned financial decisions which further results in accessing the best deals to save money.

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Category:Home Loan

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