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27 April 2011

Bank Teaser Rates and Home Loans

As we all know that as the rates of property are shooting up, at present the market for purchasing homes and applying for home loans is at a low stage. People are hesitating to apply for home loan as the prices of property are much higher and the builders are not willing to budge with the rates per square feet. All this leading to much higher rates of a small two bedroom hall kitchen or a one and a half bedroom hall kitchen costing a crore or more!
The market trends indicate that buyers are quiet and waiting patiently for the rates to drop. Financial advisors and managers are of the opinion that rates are not going to drop as the demand is always higher than the supply. It may be possible that the market for homes may stabilise and sales may pick up in the near future.
We often hear that RBI and other banks are offering loans and about their teaser rates. Many nationalised banks and other private banks are offering home loans at a very low interest rate. This offer is valid upto the month of May 2011. This may be an opportunity for buyers to make the move of purchasing a new home and apply for a home loan. Since nationalised banks are the best due to their low interest rates and stability in financial dealings many buyers opt for loans from these finacial instituttions rather than private lenders. Here they may get loans at cheaper rates but there is always unsure factor in case of delay in repayment or other problems coming up unexpectedly during the loan repayment tenure. Nationalised banks have rules for recovery and they may also help out individuals in case of default by recovering the loan amount by sale of property or other assets. Private lenders may offer loans at cheaper rates but they also may have unfair means of recovering the loans in case of default in repayment of the EMI. Hence the common man is much comfortable with home loans from nationalised banks as they are safe and secure and always follow certain rules and regulations.
Buyers after the 'wait and watch' and a slack of months according to market analysis, in the trend of home  buying, are more positive about the rates. I do not think there will be any more difference or fall in property rates. The offers are many and builders and loan lenders have saturated their options for offering homes and loans at cheaper rates. The buyer who needs a first home is at a tight spot since homes are becoming much dearer in terms of money and EMIs. It would be advisable to jump to this teaser rate offer in case you do have to purchase a home since if the decision has to be made, then it is better to watch out for best and cheapest home loans!

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