Is This A Right Time For A Home Loan Balance Transfer?
After the significant drop down in the Home Loan rates, many people are seen to shift their Home Loan accounts from one lender to another. The reason behind this transfer is that existing borrowers still have to pay the old interest rate. Being this the situation of existing Home Loan buyers, new investors have become keen towards allocating their funds in real estate properties.
The changes occurred in the real estate sector, after demonetization as well as after the announcement of the budget 2017, has seemed to please the investors as many new policies and schemes have been introduced. If you are an existing borrower and are regretting about investing in a housing property in the past, then a Home Loan balance transfer can relief you a little. You definitely cannot change your past or benefits from the old real estate schemes, but you can surely gain advantages from the new interest rates offered on Home Loans with the help of balance transfer.
What is a Home Loan Balance Transfer?
Transferring your existing Home Loan account from your current lender to another financial institution is known as Home Loan balance transfer. Generally, a balance transfer takes place if the applicant finds another lender offering better Home Loan rates than the existing one. But before transferring your Home Loan account, it is important that you plan it accordingly as you don’t end up in a debt situation.
Here are some things you should be careful about while opting for a balance transfer:
Research well:
Before opting for a balance transfer, it is necessary that you study the market conditions well. Although you are familiar with the Home Loan process, there might be some things that you are unaware of. Transferring your Home Loan account is similar to availing a new one. Thus, it is important to choose a lender who not only offers a good interest rate but also provides better services and schemes.
Documents:
Although the loan process is not new for you, you still need to keep a check on all the documents. The new lender might ask for an income proof, No Objection Certificate (NOC) and a copy of IT returns. The documents asked can also be different from the existing financial institution. As the process of Home Loan is totally a new one.
Negotiate:
Try negotiating with your existing Home Loan lender. Suppose you need a Top Up Loan and your current lender does not approve it, then you can ask him for the alternate solution to approve the loan. But, if it does not work, then you can consult another financial institution and get a balance transfer.
Tenor:
In case, you are left with a less tenor period then it is suggested to continue with the current Home Loan lender only. As you will end up increasing your tenor period and also have to pay a high processing cost. In case if you are left with a loan tenor ranging around 10 to 15 years, then availing a balance transfer can be an ideal option as you can benefit from it.
Before going for a Home Loan balance transfer, it is necessary to take a careful look at the benefits that you can gain from. If you feel the schemes and benefits are not pleasing you, it is suggested to either find another financial institution or continue with your existing lender. Also, when availing the balance transfer, it is advised to check the processing fees or else you can end up paying more for it. However, a balance transfer is a good option only if you can make the most out of it.