A home is all one dream of in their life. But the dynamic economic climate, high inflation, and even higher property prices have made this a distant dream for many. A financial saviour in the form of a Home loan is a perfect solution for this.
Home loan health check
Life is too short. So, take your decision wisely. This is all we have heard. But taking a calculated decision is important.
Our ever-changing and high-paced life might have had many peaks and lows like a job change, country switch, baby on board, or a pay hike. With these significant changes in your life, there is a significant shift in your finances too.
So, your home loan also needs review to cover your current needs as a comprehensive health check-up is important for your home loan to need an annual health check-up to get the maximum.
You may not change your broker or home loan company every year, but you can keep pace with the current interest rates, availing offers, etc.; you might get a better deal on your loan from your existing home loan company on your existing home loan EMI.
Why and How often should I review my home loan?
As the world is sailing out of the global pandemic, predicting the credibility or its value at present for a long-term commitment like a home loan is a big task. This makes it even more important for you to review your home loan from time to time. As with changing conditions and ever-changing economic environments around the world, one’s family needs and economic conditions change along with time.
A house bought almost 25 years back against a home loan may not reflect the same needs and goals presently. So, one should do financial planning periodically to satiate the current condition. Chances can be that you might be paying higher than you should.
Being complacent after the home loan sanction and monthly Home Loan EMIs debiting from the bank account is not the right thing you should be doing. So act now and smartly. Review your home loan terms periodically to get the best of the opportunities.
Let’s look at some reasons to review your home loan options regularly:
Interest rates are dynamic. They change with the market. Negotiation helps. If you can negotiate a good interest rate when they are low according to the current times, you might be able to get a competitive rate and save a considerable amount too. With better interest rates available in the market, one should think of reviewing the home loan. This will save a lot of money for sure.
- Shift in home loan market options
Times change. So does the market. New entrants, better interest rates, enhanced services, attractive offers, changes in RBI guidelines, new products, etc., are a few significant changes that one experiences in the market during the loan tenure. Since a home loan is a long-term commitment, it is even more critical to review your home loan periodically to tap a better option if required.
- Changes in personal requirements
One might have a significant change in their life. A performance bonus or pay hike can help close your loan quickly or at least help in part payment of your debt sooner than you might think. With the change in your financial goals, it is important to review your home loan to ensure its continuity requirements and easier budgeting.
It might have been a long time since you’ve reviewed your home loan, its terms and conditions, or any other feature. It might be possible you missed a great new feature or discount offered by the home loan companies. A prepayment discount is one good example of paying off your home loan balance soon enough with the great discount feature.
- Home loan percentage calculator
The home loan EMI calculator helps calculate your monthly payment schedule for a fixed number of years. This calculator gives a fair idea of one’s financial planning and comparison with other available options in the market. Interest on plot rate might fit better for you than the interest one pays for a construction loan and helps decision-making.
With changing interest rates over the years, one might find a new competitive interest rate offered by the new home loan company after probably ten years. This is when one should decide on transferring the balance loan amount to the new financier. Usually, with a good credit score and after document submission, it’s easier to shift to a new financier.
A good eye on the home loan account annually can give added benefits. One can easily grab good options or deals and enjoy flexible benefits of loan terms and conditions as per one’s current scenario.
In Conclusion
A periodic review of your home loan is necessary to ensure sound financial decisions in the event of a balance transfer, top-up, or foreclosure. A periodical review helps you determine the current balance outstanding, home loan EMI, as well as what is the ongoing home loan interest rates. It also allows you to check whether any beneficial alternative offer is available with lower interest rates. Whether it’s construction loan interest rate or plot loan interest rate, your interest rate directly affects your housing loan EMI. Therefore, check home loan EMI now with Tata Capital’s Home Loan EMI calculator!
02 July 2024
5 mins read
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