Home Loans Expenses – Effects of Increased Rate of Interest
We were curious to know about the decreased interest rates, but it did not match up to our expectations. In the first quarter, the increase in finance for housing loans companies was 18 percent, which simultaneously got up to 19 percent in the second quarter.
The fact behind this is simple; buying your own house is something that falls under the category of a person’s basic requirement and necessity. Without a house no one would really be able to survive. A house is a very basic need of human kind. To get yourself a house of your own, you need to have proper funds available with you.
In case you fall short of cash, you will have to find options to help yourself fulfill your needs. Home loans are the best proposed plan that can literally pay off all your money and help you buy your dream house. The most important part to consider in any mortgage or loan is the interest rate.
If the interest rate is low you will save more. It will be an advantage to your home loans. If the interest rate in home loans falls in the category of 9 to 11 percent, it means that the interest rate you have chosen is low.
In the current scenario, what constraints do creditors depend upon? Do we find any innovative or customized scheme?
Here, we talk and discuss about the Indian market where the financial markets are completely commoditized, whereas in Australia and other British countries, it is a different picture although. Indian creditors don’t scrutinize small information about the loaners.
It’s just for the formality procedures that these creditors consider the tenure of the amount, the sum of amount, the capacity of the owner of the loan, turnaround time for repayment, which is again in the favor of the borrower. Not only home loans but all different types of loans have same procedures which include such statements.
Also in India, there are many newer products added up along with the loan facilities. Some institutions provide overdraft facilities in alternative of short or long term loans, which makes a better finance option for borrowers.
Many of the home loan products and assets have also been highlighted during marketing home loans. While planning for homeloans, the property will be expensed as loans. If at all you go in for home loans, the down payment have to be made which has to be given from your investment amount.
E.g., if you apply for home loan of 50 lacs, consider 20% of 50 lacks as down payment. In the near future if at all there is a market rise, and the price rise takes place, you will get great benefits from your own investment. So here there is no risk or loss.
Housing Demand Must In India
As we all know India is a developing country with huge residential and commercial projects coming up. As the population is also increasing, Indians are more towards buying independent new houses in the city.
According to a survey, it is observed that in 2025 the percentage of housing loans, need and demand for houses will increase from 20- 40 percent. Cities are growing, everything is rising here.
According to a professional survey, it is observed that interest rates for house loans have reached a high, when will the scenario change from increased interest rates to decreased rates? Are the 5 years fixed rate products designed by creditors really worth the buy?
RBI has updated interest rates for housing loans. Inflation rate is growing high. There are many factors at play, and in near future there is no such observation about the interest rates going down at any cost. The very first thing we know is the European crisis, due to this Indian banks are generating less money as compared to other countries, and the other factor that is highlighted here is the fall in rupee.
So, in future we would expect the rate of interest to reach up to 11%. For fixed products, 5 years would be a long tenure. If this term would be decreased to 2 years the interest rate would be changed to a quarter of 1%. For products that have fixed long term the rate of interest, the risk is borne by the creditor.
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