Building or buying a house is no small task. Not only is the process time-consuming, but also quite expensive. Most people in India seek financial aid in order to get their dream home. Despite the widespread popularity of home loans, loan seekers often have certain misconceptions that can ruin their chances of obtaining financial help.
If you’re looking for some credit for your new home, you need to be aware of the myths Indians have about homes loans. Read on for some home loan myths worth knowing.
Myth 1 – EMIs Become Costlier When Interest Rates Are Hiked
When the bank’s base rate goes up, lenders usually assume that their EMIs will become more expensive as well. But it’s not necessarily the case. Instead of increasing your EMIs, your lender may just decide to lengthen your loan tenure. With an extended repayment period, your monthly spending capacity won’t be hit as hard as it would have been otherwise. Similarly, your loan tenure may go down if the base rates are lowered.
Myth 2 – Property Insurance Is Not Your Concern
This is a mistake that many homeowners make. In fact, if you fail to pay the insurance premium for a long time, the financial company can choose to do so on your behalf. The lender will continue to insure your property with money that’s debited from your loan account. It’s essential that you keep your property insurance when you’ve taken a home loan, otherwise you might just wake up one day to find a couple of extra zeroes in your loan amount.
Myth 3 – Fixed Interest Rates Are The Best
If you’ve taken a home loan with a fixed interest rate, then your EMI amount won’t change for the rest of the loan tenure. But this plan doesn’t always work out in your favour. For instance, if the base rates for home loans are lowered across the country, your EMI amount is still going to remain the same. On the other hand, a loan with floating interest rates will have reduced EMIs during such times. It all depends upon the prevailing market conditions in the future, so decide accordingly.
Myth 4 – Your Employment Status Really Doesn’t Matter
When you’re taking a home loan, you’ll inevitably be asked for your employment details. The loan amount you’re sanctioned depends on your income to a great extent. However, after procuring the loan, many think that lenders don’t need to be notified of future career changes. This is just another one of the common home loan myths that you need to be aware of. Your home loan agreement may have a clause which states that you would be required to keep your lender informed of any changes in your employment during the loan tenure.
By cracking the myths around home loans, you can make the most of your available financing options. If you’re looking to buy a house, you can consider the attractive Home Loans that Bajaj Finserv has on offer. These loans are not just for salaried and self-employed individuals, but also for firms and companies.