What should we know about our housing loan?

It is assessed on factors such as:

    1) Type of property
    2) Location of property
    3) Age of the borrower
    4) Income of the borrower

Generally the margin for the borrower (down payment) will be about 15% of the property as assessed by the bank/ lending institution. For mortgage loans the lending institutions will assess the value for the property based on the ‘Distress Sale Vale’ - this is the value of the property in case it is sold on an urgent need basis. This value can be much lower than the market value of the property.

When we shop for a home loan its good to research our financial institution well before opting to go with them. When we take up a housing loan, we deal with the lending institution we choose on a regular basis for a long period of time.

Therefore, we should also consider factors other than just interest rates like:-

    1) How professional is the financial institution in dealing with customers?
    2) Does it offer quality service in terms of efficiency and reliability?
    3) What are the available loan packages and which package suits you best?
    4) What are the various charges involved?

the financier(which company)  loan amount  rateo of interest  over duecharges pre closer charges

Reduce your current income by 20% to 30% while calculating what amount you should take as a loan, so that should your income decrease due to any unforseen circumstances, you will be better able to manage your financial commitments and live with lesser mental stress. Banks usually don't advise this because they want you to borrow more if you look like a person with a good & steady income.

Would like to bifurcate the important things one should care about while considering a house and housing loan

1. Property itself---- The most important thing is the choice of property. 

1A. Title of the property should be clear. Proper sanction plans approved from the authority (like BBMP/BDA in Bangalore).

1B. The value of property should be evaluated in detail.

1C. The resale value should be thoroughly considered (as you never know what contingencies may appear making you sell-You should never do a distress sale with losses).

1D. The facilities/utilities that the seller has proposed---Clubhouse/elevators/power back-up.

1E. The reputation of the builder/developer for apartment/layouts. The reputation of the seller in case of a plot/land.

2. The finance terms (housing loan)

2A. The terms of finance- interest rate (floating/fixed/mixed), how the floating rate will fluctuate.

2B. Loan to value (LTV) and your margin. Check out what all is considered in calculation of the LTV- car parking/electricity board deposit/etc.

2C. Pre-closure and prepayment charges/penalty, if applicable. Switch-over fees for floating to fixed rate and vice versa.

2D. Customer service- Should be customer friendly instead of you running around to get Interest certificates/statements etc. This is esp important if your job is transferable. Some financiers provide these facilities on internet. 

2E. PL READ THE FINE PRINT of loan agreements carefully.

many people only see physical attributes but not consider about inner attributes.

physical attributes says:

1. low rate of interest to attract people, 

2. faster service even door to door service.

3. higher loan eligibility vis-a-vis repayment capacity.

inner attributes:

1. analyse the financial strength of the customer and suggest accordingly.

2. financing pattern of the institution

3. accounting pattern of the institution.

most people attracts to the physical attributes but not ever concerned about the inner attributes of a institution for taking a loan.

I suggest not to attract like such, any institution you opt ask for their financing pattern and most important their accounting pattern. compare these patterns between the institutions and select the best one.  It will give financial advantage to the customer. after all we require saving our money rather than satisfaction on customer service.