There are many smart readers once they become curious about a topic, they immediately want to know what it means and they would have engaged in doing a small research about the topic. I am certain that my readers are also very proactive. So here I continue with the other terms and important notes you should be aware while applying for a home loan in any bank. I stopped with Levy of penal interest in the last post now let us see the rest of the terms and the clauses existing in banks.

Fixed Interest rate: A fixed interest rate remains constant throughout the loan tenure regardless of the market conditions. Borrowers are entitled only to pay the fixed interest which they opted in the beginning of the loan term. This fixed interest will not be allowed to change at any cost. The borrower takes the full liability to repay the amount with the same interest charged for him.

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Floating Interest rate: Floating interest rates are quite risky but many wanted to opt for it just because of uncertainty in it. Floating interest rate can decrease or increase depending on market fluctuations. For instance, it increases when RBI hikes up short term interest rates. Banks usually quote the floating rate loans as their index rate (prime lending rate) plus or minus x%. Banks usually increase or decrease their prime lending rate when the RBI increases or decreases short term interest rates. Sometimes it is advantageous and most of the times it’s a great downfall.  Don’t know whether you are one among the luckiest one to get lower floating interest rates if at all you opt for it.

EMI calculation: I am sure most of us are clear with the term called EMI (equated monthly installment) offered by many banks, products and service sectors to enjoy the benefits. But how is it calculated when applying for a bank loan and the borrower has to plan his budget and calculate the EMI. The EMI is calculated taking into account the loan amount, the time frame for repaying the loan and the interest rate on the borrowed sum. To make it more simple go to this site to calculate your EMI by providing your total loan amount, total time frame allotted for repayment and the type of interest rate.

I am certain that from now onwards you will be more cautious while deciding on your home loans offered by banks. Though India still has a fairly modern system of administering home loans, it posts huge profits with steep growths every year. However the cost of this is borne by hapless consumers with hardly anyone to complain about it.

As we all know that the Indian real estate industry is booming day by day and I am sure all of us want to own a house. There is a lot of financial assistance provided by the government organizations in the name of “housing loan” which makes this dream come true. The loan amount endorsement depends on a host of factors. In spite of different interest rates provided by different banks there are still people who wanted to take a risk and buy their dream house at any cost.

So what is the trick here to know which bank offers the best interest rate, repayment terms, EMI options etc. If you have a dream to buy a house and want to go for a housing loan, then hold on here and read further to know what are the important terms and conditions you should know before plunging into bank loans.

These are the basic terms which you should be aware; they are pre-payment frequency, limit, Levy of penal interest, fixed and floating interest rates, EMI calculation etc.

Pre-Payment Frequency : All the banks will offer a pre-payment frequency which is nothing but a clause to understand on what term basis you’re going to re-pay the interest and the principle amount eg: anytime, once a month/quarter/6months/year etc. Compare these terms with those of other banks and decide the quarter which will suit you better.

Limit: banks will specify the limit for the amount withdrawal based on several criteria’s like your monthly income, repayable capacity, proof of identity etc. Based on this you can pick your amount limit eg: minimum amount defined and max amount defined.

Levy of penal interest: you have to pay more than what you’re entitled to. At times people might have to pay a higher rate of interest due to various reasons and situations. To avoid all that it is advisable to repay the amount on a continuous basis.

I am sure now all of you are very curious to know about the different terms and conditions used in banks while applying for a home loan. I have more to share with you so now take a break will catch up with the same topic in the next post.

The year 2009 was full of modernization, foreign collaborations, new businesses, new inventions in technology, financial meltdown and what not happened last year. It even had a lot of impact on real estate industry for that matter. Now let us talk about how the Modern Real Estate business proliferated in India with upcoming and modern builders here, who are providing modern India with modern constructions and property deals.

Apart from this, many new international companies are also setting up their bases here. These construction efforts have been made to ensure better comfort and amenities for prospective buyers. Therefore the stance of the real estate industry took new dimension in 2009 due to global financial meltdown. Let us look at the first level impact, which was very evident in the growth rate and that was shocking the world and causing the global markets to crash. Once the markets re-invented their expectations factors in a new set of rules for the game, a new paradigm emerged. Hence real estate owners complimented with lower real estate rates offered lower interest rates etc with better incentives to customers to purchase homes.

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2009 has also seen a change in the customer sentiment towards purchasing a home and expected that the currently visible trickle of change in customer sentiment towards purchasing a home will translate into a normal buying cycle. The consumer purchasing power has improved a lot better to substantiate the current market scenario but they were deferring their purchase decisions in the beginning, literally waiting till the midst of May 2009 to get a good deal.

When the prices were reduced by the builders there were three big buyers who were willing to invest in real estate without bothering about financial tangles. They are primarily NRI’s, high salaried IT professionals and business owners etc. It was a hitch for countries like America, Europe and other major counties due to the financial meltdown and their real estate prices also went down by 18% which is an unexpected rate. The financial crunch didn’t leave a single sector of people in this world.

As we all know that the Real Estate industry had a great amount of contribution towards gross domestic product (GDP)last year and it is expected to grow in the next few years on a high scale say the experts from the industry. Though it was a slow pickup in the beginning of 2009 later the industry caught up with good business by concentrating in other important aspects and it is no more about selling lifeless lands and houses, it is about giving a feel good factor to their customers. I am sure 2009 was a fruitful year for many including the sellers and buyers and on the whole for all of us which fetched good fortune.