As people’s salaries and general living standards begin to rise, an increasing number of people, especially younger generations of people, are looking to home loans as a means to finance the purchase of the homes of their dreams. When looking for a house loan, some of them are sometimes led astray by common myths and falsehoods. If you want to purchase a home, you should make sure that when you apply for a mortgage, you do not believe any of the following urban legends:
The loan to choose is the one with the shortest duration
Many people who are thinking about getting a Kotak Home Loan feel that in order to finish the transaction as quickly as possible, they should choose the shortest loan term possible. However, consumers put more burden on their financial circumstances by doing this because the loan duration is shorter and the EMI is higher. Your ability to obtain a loan may be hampered by a higher FOIR, and higher EMI payments may cause a large decline in your monthly income (Fixed obligation to income ratio).
In order for borrowers to be able to afford their EMI instalments, they should select longer payback terms whenever possible. Should they find themselves in a position to do so, they may wish to consider prepaying all or a portion of their mortgage.
Interest rates cannot be negotiated
For some reason, people who take out PNB Home Loan continue to believe that the interest rates that mortgage lenders give are fixed and cannot be changed. This is completely untrue. You might be able to negotiate with the lender for a lower rate if you believe you are the victim of unfair treatment and don’t like the interest rate they have provided you. If you have good credit or a strong ability to repay the loan, for example, you might be able to bargain with your lender for a lower interest rate and better terms. You might look for a different lender if your current one won’t work with you to find a solution.
Use online financial websites or portals if you’re seeking for a better deal and the best lender for your mortgage. You may easily compare and choose from the numerous lenders who offer loans using these platforms, including those that offer Kotak Home Loan. EMI Calculator instruments that help you figure out your EMI. With this, you can choose the best lender for your needs and financial circumstances.
Select the lender with the lowest rates at all times
The interest rate is undoubtedly one of the most important aspects to take into account when selecting a lender and calculating your EMI using a PNB Home Loan EMI calculator, with house loan interest rates ranging from 6.5% to 10%. However, that shouldn’t be your sole factor in decisions like this. Many clients choose the lender with the lowest mortgage amount, which is a mistake.
Other factors like as the services offered (such as additional loans), terms and conditions, the maximum length, different repayment alternatives, or payment methods are not taken into account. Remember all of these things when choosing a lender, and choose the one who offers all of these services while also charging a lesser interest rate than the competitors. When compared to a lender giving a Kotak Home Loan with a lower interest rate in the same situation, in some cases a lender with a somewhat higher interest rate may also offer additional services and better terms of service.
A PNB Home Loan will be assured to you if your credit score is excellent
Many people think that if they have a better credit score, their mortgage application will be approved right away. Although having a good credit score increases your chances of getting approved for credit, it does not guarantee it. Your age, income, debt-to-income ratio, employment history, and EMI, which you can calculate using the home loan EMI calculator, are among the additional considerations that will determine whether your application for a house loan is approved. Before filing an application for a Kotak Home Loan, you should use an online loan eligibility calculator, which can be found on the websites of important financial markets. These help the borrower determine their eligibility for a house loan without them having to fill out an application and wait for a response from the lending organisation.
Significant fees are charged by lenders for loan prepayment and foreclosure
Another common myth about mortgages is that the lender may charge large penalties if a loan is paid off early. This is untrue. According to the Reserve Bank of India, lenders cannot charge any fees for prepayment or foreclosure on floating-rate mortgages. On the other hand, fixed-rate mortgages may be subject to these costs. The amount varies from lender to lender, but it normally runs up to 2 percent.
When interest rates increase automatically, PNB Home Loan EMIs also increase.
Many borrowers of home loans believe that when the Reserve Bank of India raises interest rates, their EMIs will also automatically increase, making it harder for them to make on-time payments toward their costs each month. Just a straightforward miscommunication issue. When interest rates rise, lenders frequently offer to extend the loan to keep your monthly payment from going up. However, borrowers should pay the higher EMI if they can because extending the loan term would result in higher overall interest payments. However, make use of the Kotak Home Loan EMI calculator to have a good idea of how the EMI will change.
In addition, the new, higher interest rate won’t take effect for your mortgage loan until after the period of time known as the reset time has elapsed. Borrowers who are currently making payments on a house loan may choose to transfer the amount of their loan if they are confident that doing so will result in significant cost savings (because of a lower interest rate).