Most people are unable to purchase a house by relying solely on their savings and monthly income. However, thanks to financial institutions giving out home loans, they can buy their dream houses. A home loan provides the required finances to make the purchase and the lender offers a repayment period to clear the loan, at a certain interest rate. To attract more customers, financial institutions keep coming out with new plans with better terms. Now, if you have already taken a home loan and now find a better one, you can apply for a home loan balance transfer. This involves transferring the outstanding loan amount to another lender to get better benefits.
Many borrowers choose to transfer their home loans to other lenders when they get better terms. This is because the transfer can help them in saving a significant amount of money. Now, if you are thinking of refinancing your home loan too, make sure to keep the following things in mind while evaluating the new lender:
- Take a look at charges involved in the transfer
It is very important to calculate the charges involved in transferring the home loan while deciding whether refinancing your home loan is financially beneficial. So, make sure to check for processing fees, administration charges, application fees, etc. with the new lender before going ahead and applying for the transfer.
- Focus on getting a good deal on the interest rate
One of the main reasons why people opt for home loan balance transfers is the change in the loan’s interest rate. Any difference in the interest rate, even a slight one, can have a significant impact on the home loan EMIs and bring down the total cost of the loan. This is why it is very important to focus on getting an attractive home loan balance transferinterest rate.
- Check if the lender is offering a top-up loan
Home loan balance transfers are not just about getting a lower interest rate. There are borrowers who opt for these transfers to also get a top-up loan. This top-up loan can be used for any of your personal expenses. Do keep in mind to check the interest rate being offered on this loan.
- Calculate the revised monthly instalments before going ahead
The purpose of this transfer is to ease your repayment, so it is important to make sure that the revised monthly instalments are convenient to your budget. For this, it is advisable to make use of a home loan balance transfer calculator as this will display the EMIs you will have to pay after the transfer. You can then decide whether refinancing your home loan is a suitable option.
Now that you know what to look for in a lender, go ahead and discuss the terms of the transfer. Also, do keep in mind to check the documents required for a home loan balance transfer. Each lender can have varying requirements, which is why it is important to check with yours to ensure a smooth process.