21 August 2011
Many people are not aware that insurance cover has become mandatory for approval of home loans. Lenders do take care of their large sums of finance offered as loan by making it compulsory to insure the home that has been taken on a home loan. With so many options of lenders private as well as nationalised banks offering home loans many of these financial institutions have made tie-ups with certain insurance companies.
When the lenders get a customer who requires a home loan one of the documents to be processed is the insurance cover for the property or flat. Though the insurance companies offer an cover over natural or other hazards there is always a limitation on which hazards they cover. The borrower has to find out and read all the fine prints before selecting an insurance company for their home. Usually many lending institutions have an understanding with some insurance companies. Like the ICICI home finance have a tie up with ICICI Lombard. Also mentioning another finance company, HSBC has a tie up with TATA AIG for insurance cover policies regarding home loans.
The borrower can also opt for a policy of a larger amount that will cover all the other aspects of his life. Like sickness, accidents, unexpected losses as well as home accidents and burglary. Here also different insurance companies have different eligibility rules for covering calamities and thefts.
This amount of insurance is calculated according to the property cost and value of the house. The home insurance has the option to pay the insurance amount as a lump sum or in parts as the convenience of the borrower. Usually this amount as insurance premium is added along with EMI that the borrower has to pay every month according to the repayment schedule.
When an borrower applies for a home loan one thing that comes up is the home insurance and this is compulsory for all home purchasers. TATA is a well reputed and well known company that has offers insurance cover for unforeseen circumstances and accidents at an affordable rate.
Well their promise for Rs. 7 per day and get the relief of insuring your property and home. And all this is very easy to handle with just a click of your mouse on the internet and they have their customer service associate who can guide you for the processing and application of home loans as well as insurance covers.
What does the TATA AIG cover as insurance and what things are excluded needs to be talked and discussed before hand by the borrower. There are many things that the insurance company covers, fires and unexpected calamities like earthquakes, floods, lightening and thunderstorms. One good point about TATA AIG is that they also protect and give an insurance cover for calamities like terrorism, riots and threat from man made crisis.
The TATA AIG also covers burglary and theft as well as baggage lost during travel outside the municipal limits of the city. With this insurance company , the TATA AIG you can also insure your electrical appliances as well as audio and audio visual appliances for theft, robbery or damage in electrical or mechanical. I do not know how much the cover will be and what will be their criteria for being eligible for the insurance cover and this will depend upon the cost of the equipment and the situation in matter.
The TATA AIG offers insurance cover at affordable rates and the insurance premium is a much smaller amount you pay to get the relief of your property being insured. This premium is added to your monthly EMI amount that you are paying for the repayment of your home loan.
With the insurance cover becoming compulsory for the approval of home loans the borrower has another payment to pay along with the regular EMIs. This will depend upon the total cost of your property or the loan amount offered by the lending institution. It is much easier for the salaried class to go in for a home loan with the reassurance of the insurance cover.
Though I do not know how much exactly this helps! this will only come to knowledge when someone actually comes to use this and has a tough time recovering dues.
The United Housing Loans Scheme is one such company that offers home loans along with insurance cover to the borrowers of home loans. This company has a coverage for many aspects. The borrower can take insurance cover for property under construction as well as ready possession of the flat. One good point is that the customers can avail a home loan on property where the flat is not ready and is under construction in which case they cannot avail a mortgage loan.
United Bank of India is one of the nationalized banks that has many branches and served the public for many years. This bank also has good offers for borrowers who wish to take home loans. As basic criteria for eligibility they have the minimum age of 21 for any borrower to apply for home loan. The United bank offers loans for various purposes like purchase of land and house just like any other bank. The important mention here is that they offer loans for houses that are up to 35 years old, this is an important aspect for the customer who wishes to purchase a flat in an old building. Many banks would give loans for new flats and those under construction.
The United Bank of India also has facility for take over of other existing loans, so they have the procedure and infrastructure available for the borrowers to shift their previous home loans to a better offer. The loans for renovation and extension of existing property is also given by the bank if the borrower fits their eligibility criteria, which is they have the repayment capacity. They also promise that there will be no penalty charges or prepayment fees, for early closure of home loan.
The details can be discussed before selecting any bank regarding home loans as every lending institution has customer care service available and most banks have online support for the same.
One of the insurance providers to customers applying for home loans and also other individuals Bajaj Allianz has been serving customers for many years. They have facilities for covering all calamities like the other insurance companies. The Bajaj Allianz general insurance cover is available for many aspects and home insurance cover is just one of the offers by the company. They cover life insurance, car insurance, travel insurance, health insurance as well as home and business insurance.
They cover life insurance and also house insurance with one scheme and also offer facility of low premium and customized payments. A single policy covers all risks related to house. All this is covered at very attractive and competitive rates to the borrowers. They cover risks and calamities like robbery, theft, fire, accidents, jewellery, electronic goods, and baggage insurance and also cover any breakdown of home appliances.
They have customized cover options and the borrowers of loans can select according tot heir priorities. They have easy householder’s plans to select and also offered at affordable package premium. They promise for an easy settlement procedure which si the most important aspect for any insurance company. The main criteria for selecting a insurance company is their service during need.
The convenience of the customer is very important and they have the facility of activation of the policy online and this is very essential in today’s times where travelling is a big problem. With so many options available for the customers the insurance companies have to provide extra care and good support regarding claims during crises if they wish to have an upper hand among other insurance companies. So do try and find out their service from other customers and then choose an insurance policy as you have to choose some company and you do have to pay the premium so go with that company with which there is easy and quick claim settlement.
A well reputed bank the Central Bank of India offers loans to people who are aged 21 and above and who have the repayment capacity are offered loans for house purchase, renovation, land purchase and they also have the facility of purchasing houses in old buildings which some years back was a no no for any lending institution.
The Central bank of India offers loans to NRIs as well as Indians at low rate of interest. They also promise that the house will be insured and covered for any calamities till the tenure of the loan repayment. The bank offers loans for purchase of old property which may not be older than 30 years. Renovation and extension of the existing flat is also helped by offering loans at low interest rate and customized repayment schedule.
The bank promises no prepayment charges! no penalty , no processing charges, and free insurance cover that is life insurance cover free for the entire loan amount. But here the loan amount may be limited as the bank offers loan from 5 lakh to 20 lakh for a tenure of 20 years. The Central Bank of India offers equity loans as they require some assets as security for offering the loan. Since the loans are offered to both salaried as well as self employed individuals they do need some security cover for this.
Wondering how no prepayment charges and no administrative charges? They do have a late fee that is in case of delay in paying the EMI there is a 2% late payment charge. They also have a mention for change of repayment schedule from fixed rate of interest to floating rate of interest and they charge 1% of the loan amount for the same. And this is required with the volatile home loans market and fear of recession setting in the borrowers has every right to change to a better home loan.