Although, the financial policy group of the Reserve Bank of India (RBI) publicized an increase in the repo percentage by 25 basis points to 6.25%. This hike in the repo percentage by the Reserve Bank of India has followed the duration of four and a half years. The past time repo proportion was increased was in January 2014, earlier Prime Minister NarendraModi-led BJP government now approached to power. The current modification in repo percentage has directed to a hike in home loan interest rates also, which is really a main concern for the home loan debtors as they are beholding a hike in the rate of home loan EMIs.
The growing home loan interest rates are seeing to be a load for the prevailing home loan debtors. Any surge in the home loan interest rates will mean a maximum interest disbursement for the home loan defaulter. Many persons who feel the interest is excessively higher or the EMI is excessively to pay for and can easily use the home loan balance transfer option and move to several creditors. If you feel that the current alteration in repo proportion will enhance your home loan EMI load, and then you can choose a home loan balance transfer to benefit lower interest rates offered in the market, therefore providing the EMIs reasonably priced. But, first of all, let us define what exactly home loan balance transfer is all about.
What is Home Loan Balance Transfer?
Home Loan Transfer is provided by several banks and financial organizations which assist in conveying your existing home loan balance from present moneylender to new creditor. Transferring your home loan to a new creditor assists you to obtain special offers and lower interest rates which decrease your home loan responsibility too. The home loan transfer service assists you in evading maximum interest rate of your home loan provider and offers you the facility to move to a new moneylender who provides a lower rate of interest.
Home Loan Balance Transfer Process
For a lower rate of interest and other great advantages, consumers tend to choose a home loan transfer for the unsettled amount to another bank or financial organization. The new creditor will pay your current lender the owing amount outstanding on your home loan after which you will be indebted the unsettled amount to the new moneylender. To successfully transfer your home loan, you just require following the steps given below:
Make a home loan application to the new lender: You have to take a fresh home loan application that must be done to your new home loan creditor. Some home loan creditors also offer online application services to do the entire processes.
Submit your Documents: Documents such as a photograph, bank statements and photocopies of identity and address proof, income documents are mandatory. Your bank might need the following documents also:
A letter on the letterhead of your current bank or financial organization stating the list of property official papers held by them
Most recent owing balance letter from the loaning institution
Photocopy of property papers
Foreclosure of presentloan: When you would like to make a home loan balance transfer, you must have to complete foreclosure procedures for the current home loan. After the foreclosure procedures, the new lending bank or financial organization might make a payment of the unsettled amount to the prior creditor to issue the original documents.
New Home Loan Contract: After all the procedures are implemented successfully, a new home loan contract will be done between you and the new lending bank or financial organization.
What should home loan borrowers do?
As home loan interest rates are growing after the current alteration in repo percentage, home loan debtors can seek out other banks and financial institutes offering a lower rate of interest on home loan. If you have benefitted home loan in recent times, then you must wait till your change date. Once you cross your reset date, you must like the lending rate with other banks and financial organizations to benefit the top interest rate on your home loan. You must also analyze the possible savings by transferring your home loan to assist you with your calculations.