02 August 2011
What your Lender will not tell you
With many finance companies and banks willing to lend money for home loans the borrower has to decision the make the right choice. The right lender will depend upon individual situations and preferences for repayment. Let us discuss what your lender will shy away from mentioning in front of you when you make a deal for home loans.
You know the interest rate the bank is offering you loan on. This is calculated and your monthly take home income is also considered, and you get eh amount you can afford as EMI every month. This will allow the lender to offer you a home loan of the amount for which you can pay every month the amount decided as EMI. Your lender will not tell you that this interest rate is negotiable! Start here with the negotiations and if you have a good qualification and are in age group of 25 to 30 then the lender will definitely make way for you.
What documents are required from you may be mentioned umpteen times but still unexpectedly the lender comes up with insurance, account in the same bank so you have to open and account and deposit money for the same! Some banks request you to take shares of the bank and here again you who have come for a loan have to deposit money to begin the process of getting a loan! So this all means that ‘hidden costs’ also add up to a substantial amount in the processing and approval of home loans, be prepared and talk clearly before hand to the lender.
Calculate after the lender has given you the figure. Why I mention this because you may be seeing the low interest rate written on paper and the concessions that the lending institution is giving but all this is oral conversation and the lender will take all this into account but write a figure in which they gain maximum profit. And here you come home feeling that you have got a good bargain but in fact the opposite is true, the lender wins!
So however much the lender shows that you are gaining remember that there are no profits and losses. It always goes according to the laws of nature. You pay and you get the service and nothing is free! So see which offer is best for you and go in for it and not the one that shows you are saving money from you home loan! because you don’t!