All About Understanding Home Loan Transfer
Most of us opt for a home loan transfer in order to get benefits from the changing interest rates. The term refinancing or balance transfer can be said synonyms.
Presently, the Home Loan borrower who is in the loan term period from last 2 years with a lender, the dropping interest rates fail to procure all of the paybacks. The benefits of RBI have been continuously insisting on the fact that all the existing borrowers should also be allowed to get benefit from these lower interest rates but in reality it doesn’t happen.
With their bank on re-negotiating the interest rates and such individuals could discuss which is based on the superior refund track record etc. if the bank is not saying yes to their request, then offers a lower interest rate and better terms on Home loan they could move to a bank.
To start your Home loan process, the first thing you need to do is to submit a letter to the present lender demanding a loan transfer. Depending on your call, the bank will offer you a permission letter immediately or what is called a non-objection certificate (NOC) along with an official statement citing the outstanding total.
And the moment you are done with your legal procedures, your property documents will be handed over to the bank, and the outstanding PDC (post Dated Cheques) and ECS will get cancelled.
Your new lender will defiantly offer you Housing loan based on the current Home Loan rates.
Prepayment fee is charged according to the present lenders terms and conditions and varies anywhere between 2 to 5% of the outstanding loan value at the time when you request for Home Loan transfer.
However, some of the banks like ICICI and SBI and other NBFC’s have waived off this fee. Even some of the banks can still charge some penalty amount.
Along with all these steps, you should always keep in mind that you can always bargain on a floating loan because both RBI and NHB don’t support the prepayment fines charged on the floating loan interest rates. You can also negotiate from the new lender to give you some rebate on the processing fee. The fee ranges between 0.5% to 1% of the total applied loan amount. Some banks limit this amount to Rs. 5000.
Some of the points to be kept in mind for home loan transfer:
1) You can check your present bank for the extension of your loan period.
2) If the value of your Loan amount has been raised, You can ask for the top up from the lender.
3) If your bank refuses to do so, then you can search for the new lender and can start the process of Balance Transfer.
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