Home Funding Options For First Time Buyers In India

1. Home Funding Options For First Time Buyers In India With an increasing number of aspirational Indians looking to purchase and own a home of their choice, the top real estate companies are tying with various financial institutions to provide them with a wide range of home finance option. Although, the term home loan has almost become ubiquitous in modern parlance, there are various kinds of home loans and home finance options which many home buyers are either unware of or do not understand to the best of their knowledge. Home loans are certainly one of most widely used instruments of home ownership and to a great degree are also one of the most viable ones for individuals of all. Several leading banks have attractive and innovative home loan products to suit your need and financial ability. Also lucrative interest regime has also made home loans to be a preferred mode of home finance. Some of the common home loan variants available widely in the Indian market have been briefly explained below: 1.Floating Interest Loans: Home loan interest is based on the prime lending rate specified by the Reserve Bank of India. This rate is tweaked by the RBI at various intervals to adjust its monetary policy. In case of a floating home loan, the interest to be paid by the consumer shifts or floats as per the changes to the policy stipulated by the Reserve Bank. In case the interest rates go up then the home loan EMIs increase and while they go down they tend to decrease. Consumers can benefit from the downward revisions to the interest rate but also face the risk of shelling out more EMIs in case the rate change is upwards 2.Fixed Interest Loans: Fixed interest rates help a consumer find stability from the volatility of the home loan market. The interest rate for the loan secured by the consumer is fixed at the time of disbursement and irrespective of upward or downward revision of the loan by the Reserve Bank of India, the consumer continues to pay the same EMI each month. While the consumer might miss out on the savings while interest rates are reduced, he would certainly be protected against unexpected hikes in the rates. A stable EMI schedule helps better plan the finances. 3.Smart Loans: For those who look to have the best of both worlds, some banks also offer a hybrid variety of loans wherein the consumer can enjoy both Floating & Fixed home loan options. For a specific period of the loan tenure the EMIs are computed in the fixed interest scheme and then it shifts to a floating regime. This way the consumer can benefit from both stability and changes in interest rates. 4.Staggered Financing: Most projects are purchased by the consumers while still under construction. And therefore banks have the option of releasing payments in a staggered manner. This allows for the consumer to enjoy reduced interest burden. And the developer can still have access to funds for that stage of construction.

2. Some of the best real estate companies offer additional home funding options such as an accelerated repayment facility or a step-up repayment facility. A step up repayment option allows the consumer to pay smaller EMIs in the begging and step up the payments with increased earnings.