Home loan

5 Things to Consider Before Opting for a Home Loan Balance Transfer Indiafleurit


A mortgage balance transfer becomes necessary when you are not satisfied with the mortgage interest rate offered by your current lender. It’s also a smart alternative if you also need a top-up loan.

A home loan balance transfer gives you the benefits of being with a new lender, which include the possibility of a relatively low home loan interest rate, with subsequent reduction in EMI or term. Even a one percent difference between your old interest rate and the new one can make a substantial difference in terms of actual interest outflow. Thus, a marginal reduction in the interest rate can lead to significant savings, making the loan all the more affordable.

The balance transfer process involves transferring the loan amount from your existing lender to the new lender, allowing you to bypass the increased mortgage interest rates. Your new lender will likely offer you a more competitive interest rate on your existing loan, depending on your eligibility. Plus, when you go for a home loan balance transfer, you can negotiate better terms.

A borrower should also consider the mortgage balance transfer option if they no longer like the customer service they receive from their current lender, or if they are unhappy with the additional fees and charges levied, especially if there is a lack of transparency. Dealing with a new lender minus these pain points certainly leads to a better business relationship.

There is no reason to believe that getting a loan from one lender is the end of it. If your current home loan is negatively impacting your finances, finding a better lender with better terms is a valid option.

5 things to consider before choosing a mortgage balance transfer

As a borrower, you not only need to think about low interest rates and the prospect of a better lender, but there are other equally crucial things to consider. Read on to find out which five things you should be looking at.

1. Negotiate for a lower interest rate

Based on existing market conditions, try to negotiate the lowest possible interest rate. The applicable interest rate in your case will depend on a number of factors, including the property in question and your income profile and credit history, among others. The process can become much smoother if you already have a relationship with the new lender, such as with a previous loan.

2. Leverage your credit score to negotiate the best deal

A good credit score is a testament to your creditworthiness, and the value of a high score cannot be overstated. As a candidate with a solid financial profile and a CIBIL score above 750, you have the choice to choose from the best lenders. Take advantage of this setting to negotiate the best possible loan terms. Of course, this only works if you have an impeccable credit history, so it’s imperative that you don’t default on your existing loans.

3. Mortgage balance transfer fees

The home loan balance transfer process involves a set of fees and charges, including processing fees, legal and technical fees, stamp duties, and other government fees such as MOE and MODT, which can vary from state to state. So, before you request a mortgage balance transfer, be sure to check that the cost of the transfer does not exceed your interest savings.

4. The general conditions of the new lender

It is beneficial to study the terms and conditions of the new lender before accepting the transfer of the mortgage balance. To save yourself the trouble of entering into a contract that will hurt your finances, familiarize yourself with their terms. This helps you avoid unpleasant surprises, like hidden charges. We recommend that you do your due diligence before proceeding with the transfer of your mortgage balance with a new lender.

5. The duration of your loan

If you are nearing the end of your mortgage term, it makes little sense to request a mortgage balance transfer. Also, if you are planning to sell the property you have taken out the loan for, it is not advisable to request a balance transfer for the same. The only way to get around this would be to get a top-up loan, thereby increasing the term of your loan with your new lender.

Reasons to choose a mortgage balance transfer

A home loan balance transfer is beneficial for many borrowers, and many make a compelling case for it. Here are a few reasons why you should consider a home loan balance transfer.

  • You are free to choose how you want to service your loan, after the balance transfer, whether through smaller IMEs with the same loan term, or through the same EMI amount on a shorter term.
  • Choosing to borrow from a new lender of your choice is also the promise of a better customer relationship, ensuring better support services.
  • When you request a balance transfer, you have a good chance of benefiting from the low interest rate on home loans that your new lender will offer. A lower interest rate will reduce the total interest outflow, making it easier for you to service the loan.

Apply for Bajaj Housing Finance Home Loan Balance Transfer Today

A balance transfer is a good way to get the most out of your home loan, but we ask that you consider the factors mentioned before you move. Bajaj Housing Finance Home Loan Balance Transfer offers a number of benefits, ranging from the lowest interest rate starting at 6.75% * for salaried applicants and professionals to fast processing and disbursement, in-home service, personalized repayment options, over 5,000 approved projects, and external benchmark loans.

Source link

Leave a Reply

Your email address will not be published.