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19 November 2010

How to Calculate EMI?

This term EMI is very frequently used with regard to home loans. EMI stands for easy monthly installments. Any loan amount taken from private or government financial lenders has to be rapid according to a pre scheduled duration. This installment amount can nowadys be calculated very easily in the conforts of our home.
Many institutions have given online forms for calculating the monthly EMI's to be paid. It has become very easy for an individual to take a loan as ther procedures for procuring home loans have been made very simple. Easy availabilty of home loans and EMI calculators online has made the process of purchasing homes very convenient. The calculator has certain blocks where the individual going in for a loan has to fill in the amount. 1) The total loan amount 2) Loan period or duration of loan in years 3) Interest rates, and just on a click of the mouse one can get the monthly EMI amount.
Interest rates for the amount can be monthly or annually and this adds to the total amount of repayment. Some institutions also take advance one or two monthly installments at the beginning and then the regular repayment schedule begins after one or two months. The individual here gets the time to prepare for the amount and deposit it in the bank account.
Online calculators have made it very easy to calculate EMI's and decide to select the financial institution who offers best home loans. Even for car loans, property loans, second home loans as well as home renovation lons or personal loans one can calculate the EMI's easily and select the lender who offers best deals for the loans.

What is EMI?

EMI is a term often heard by us in regard with home loans. As the percentage of people going in for home loans is increasing so also is the availability of home loans becoming very simple and easy. EMI stands for "Equated Monthly Installment". EMI's are a term used not only for home loans but are used for any type of  loans example car loans, mortgage loans, business loans, second home loans etc.

The loan amount is decided according to the individual's financial capacity for repayment and the loan tenure, the period for which the loan has to be repaid. The amount of EMI is decided upon purchase of home and applying for a home loan. The total amount depends upon the amount of the property and the rates per square foot going on in that particular area. Taking of home loans is a long term decision and calculating per month the installment helps the individual to be prepared for the loan repayment schedule.
The term 'easy' is used as this amount is calculated according to the individuals capacity in repaying the loan. There are options where the borrower can go in for selected schemes according to their individual repayment capacity of the loan amount.
EMI"s vary from institutions either private loan lenders or government financial institutions and banks as this depends upon the property rates in that area and the interest rates applied by the lender. Hence it is not a universal amount for any house and one has to calculate the EMI"s before going in for a home loan.
When an individual considers buying a home and for this decides to go in for a home loan either from private lenders or government banks he has to pay a certain amount every month as part of repayment of the loan.

14 November 2010

Taking a Home Loan for House Under Construction.

Taking a home loan for house under construction can have various loop holes which come in the lime light only later. Homes are built by people and only houses can be built by builders. All of us understand that buying a new home is a very emotional aspect in an individuals life. Many of us consider taking a home but the finances are never sufficient as the rates of property are shooting up till the sky. Home loans came as a boon for us and we can think of purchasing that dream home with loan amount which other wise we would not have dreamt of.
The property under construction always has lesser per square feet amount than purchasing an outright  house. The booking amount is calculated per square feet according to the rate going on in that particular area. Loans can be taken according to this rate and EMI's calculated for the convenience of payments every month for the period or years decided according to the loan repayment schedule. Every thing is calcualted till the last detail and every month the purchaser goes and views the progress taking place in the construction. Many of the people may be staying in rented flats and also have to pay the EMI amounts along with their rent.
What happens when the building under costruction comes in some legal dispute?
well it becomes very difficult to pay the EMI's as well as the rent for an increased number of months. The customer is also very afraid about when the decision of legal matter will be settled and when they will take possession of their new flat. Definately legal battles take up much more time than expected and is always very stressful for the home loan borrower. Sometimes the whole propertyy is taken over by some other builder and they have their own terms and conditions. Here the customer has the option to take an amount offered by the builder and leave but it is always lesser than the house amount that can be got on purchasing the flat. If the purchaser goes in for continuing then they have to amend the rules and prepare fresh documents according to the hand over of property.
Hence it is very much advisable to go in for purchasing flats from a reputed builder. Find out about the reputation of the builder over the years. Observe their ongoing property projects. Also consider visiiting their successful and completed projects to have a view of how the final flat will look. Taking a bet on new builders may come at a reasonable amount and even lesser per sqare feet rate as also they may offer may latest amenities but it is always the insecure future that has to be considered before purchasing a new flat and going in for a home loan.

12 November 2010

Attractive Home Loans Offers - All that Glitters is not Gold!

Attractive home loans offers can be noticed in the news papers as well as television and other medias. Full page advertisements are placed showing latest amenities as well as competitive lower interest rates. The customer always sees the best picture that is presented by the media and this may not always be true. Before going in for purchasing a new home and the applying for a home loan one must make a thorough survey of the market trends, area rates, and interest rates offered by private as well as government lenders.
Usually there are many loop holes in the offers that are not visible on the first sight of the offersd. The media always highlights few marketing points and cooly conceals some of the important points which may result in increased amounts for loan repayment. The customer is misleaded by the festive offers and now it is also seen that many exhibitions and property fairs end up only in bringing many buildres and lenders at one place. Where is the benefit for the customer? After calculating the total loan amount, EMI's are much larger comapred to the offered perks and goodies which are quite small. Still the lenders and house builders always unneccessarily create a hype and a false image of the offers and lure customers into the deal of procuring a home loan.
Well this doen not mean that home loans are bad. It is the best opportuinty that one can get to fulfill the dream of purchasing a new home and also at attractive interest rates. Go through all the clauses of the property as well as all the amounts to be paid as taxes, processing fees as also transfer and other administartive costs. Calculate accordingly and then consider going in for a home loan. Taking into consideration all aspects of the payments helps one to be prepared for the total down payment as well as the monthly EMI"s. It would be highly misleading to go in for an offer that publicizes only low interest rates as there may be other hidden expense and you may end up paying more than if you had considered the other offer of higher interest rates.
Property exhibitions and fairs bring many reputed builders as well as private, government and individual lenders under one roof. Pamplets are circulated and brochres are distributed. Before jumping on th decision it is better to learn which institutions are taking part and the availability of their offers. Usually there is acertain time limit given to customers for applying for a home loan at the offered rate. Maybe within a week or a month so you get the time to go through the brochures carefully and calculate the amount you end up paying for each offer. There may be benefits and losses with each offer and selection of a home and home loan lender  depends on the individual choice.

Do You Need a Home Loan? Are You Really In Need of a Home Loan?

As the trend is going on the newspapers and media advertisements are highlighting the home loans and their benefits. Every day we see 'cheap home loans' and each individual is tempted to go in for a loan as there is easy availability of home loans and the procedures for procuring home loans has also become very simple. But do you need a home loan? this is the big question asked and must be thought of  by everyone before going in for a home loan.
If you are purchasing a first home and have a reasonably fixed salary then it is fine to follow your dreams of buying a home or even a second home for investment. However much the attractive advertisements and tempting offers by the home loans lenders never ever forget that you always end up paying a much larger amount for the purchase as the loan amount  also adds interest money and it is a substantial amount. If it is possible one can encash certain investments to increase the down payment and go in for a smaller amount of loan. Consider your other responsibilities and financial liabilities before taking this step.
Best Home Loans Investment Second Homes

If you are going in for a second home it is advisable to survey the market and the interest rates as well as festive offers on the homes. Following the trend as your friends have taken a home loan is not a good idea as each individual has different priorities as well as different financial positions. You may not come to know about the pressures every month for paying EMI's on the respective dates unless you yourself are committed on a home loan.
Think according to your salary and how much money you can keep aside for payment of a home loan. Taking a home loan is the best opportuinty for many borrowers as the purchase of a home is done immediately as the processsing of home loans is completed. The dream can  be fulfilled and you can enjoy the new home over the years maybe ten, twenty even as the loan is being repayed. Many have benefitted with this opportunity and a new home which would otherwise be impossible to buy now has come within the reach of the middle class due to easy availability of home loans.
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