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Home Loan - No Daunting Task

Author: Aditya Jaiswal

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The housing markets have picked up considerably in recent years and hence made property search in India, a daunting task indeed. According to the expert Indian Property Consultants, powerful demand stimuli have caused shortages in almost all cities, pushing up residential property prices. On the supply side, too steep rises in energy prices and, more importantly, accelerating land prices are fuelling the cost of property. This has ranged an alarm bells in the ears of real estate agents across the country. When talking about the ten most important cities, residential property prices have jumped up by around 25 percent in 2005. But fortunately these increases do not automatically impose heavier burdens on the households. For one thing incomes for skilled employees have soared. In addition, financing rates are still well below their 1990’s highs. Although the experience of buying a home on loan can be little daunting, but it is worth the effort.

To shoulder the relief, there are number of finance companies offering housing loans. Some of the top finance companies are ICICI Bank, HDFC Bank, State Bank of India, Bank of Baroda, IDBI, Punjab National Bank, Central Bank of India and the list goes on. There are number of nationalized banks, Private Banks which offer home loans at a low interest rate. The Finance Authority of India usually sanctions the interest rate. Although the lending rates did go up early this year, however fearing an impending slowdown in home purchases, banks and financial institutions are set to cut home loan interest rates by 0.25 to 0.5 percentage points. The fear that the home loan industry will not peak last years growth figuring 30—35 percent the industry besides cutting is ready to extend the repayment period upto 30 years, retirement age permitting . Competition has compelled housing finance companies to consider flexibility in disbursement to suit the requirements of its customers.

There are some fundamental differences between the various rates on offer that individuals must appreciate before opting for a home loan. To begin with, there are two basic types of home loans based on the interest rates - fixed rates and floating rates.
Fixed rate home loans are loans available with a fixed rate of interest for a given period of time. Floating rate home loans are linked to the prevailing market rate of interest. Floating rate loans are therefore subject to change at periodical intervals.

About Author

Aditya Jaiswal, advisor of home loans for NRIs, is an associated editor with the site: http://www.guide2homeloan.com . The site is an online portal to provide home loan advice on home loans in India including types of home loans in India, home loan interest rates in India provided by home loan providers in India.

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