When you locate a lender who is willing to offer you a cheaper interest rate than your current one after paying back your housing loan for a few years, transferring your balance makes sense. You could thus lower your EMI and the interest on your home loan by moving to the new lender.
However, a few criteria will determine whether it delivers savings. Below is a quick explanation of each.
What things need to be taken into account while transferring a loan balance?
You gradually raise your credit score after a few timely payments on housing loan repayment. As a result, you qualify for a low interest rate on the specific home loan needed. You choose a home loan balance transfer to a lender with better terms and interest rates as a result, which will lessen your financial burden. However, bear in mind the preceding before doing so:
What things need to be taken into account before transferring a loan balance?
You gradually raise your credit score after a few repayments on housing loan repayment. As a result, you qualify for a low interest rate on the precise home loan in India needed. You choose a home loan balance transfer to a lender with better terms and interest rates as a result, which will decrease your financial burden. However, bear in mind the follows before doing so:
overall fees
The process of transferring a home loan entails a number of fees, including prepayment of the existing loan, stamp duty fees, processing fees for the new loan, legal or other professional fees, etc. Therefore, consider if these layers of additional costs will offset the benefit of the lower interest cost prior to the transfer. If so, the transfer’s intent is negated.
Lend term
There is no use in moving the home loan balance if you are close to paying off your mortgage. Avoid the transfer if you want to sell the property following clearing. It would be a terrific choice if you took out a house loan top-up loan, though. A top-up loan can help you in various ways. It means a longer the loan’s term and lessens the interest payment.
As long as the terms and conditions are fair, applying for a property loan does not put financial strain on borrowers. Choose a home loan balance transfer instead if you don’t have the preferred terms. However, the next section will discuss whether or not you qualify for a house loan balance transfer.
What are the requirements for a salaried person to transfer a home loan?
You should be sufficiently briefed about home loan balance transfers before transferring. However, the eligibility quotient should be thought of as the main factor. Which are:
Country of origin: India
Age range: 28 to 58 years Employment status: You should have at least three years of experience
Minimum income – city-specific
CIBIL score of at least 750
Loan information: It must fit your financial position
What paperwork is needed to apply for a mortgage?
A few documents are needed for both the balance transfer and the home loan for salaried individuals. These include the following: employee ID card, last two-month wage slip, last three-month bank account statement, property documents, and existing loan documents. KYC documents include a driver’s licence, passport, voter ID card, and Aadhaar card.
In addition, if you want to transfer the amount after receiving a home loan, you must obtain the following paperwork from your current lender.
- Notification of No Objection (NOC)
- Letter of approval
- Letter of foreclosure; property records
- mortgage statement
- check post dated notes
After a few housing loan repayments, you may find that new lenders have joined the market with a better rate, prompting the requirement of a home loan balance transfer. The EMI is decreased and the interest rate is reduced by switching to a better lender.