Refinancing a home loan is a common practice. If one were to refinance a housing loan in India, now would be a good time. After many years, RBI has announced a cut in the repo rates and therefore the clouds are clearing over availability of reduced lending rates. Those who are paying at subprime lending rates (because they picked up high interest home loans during recession) now can avail the home loan refinance facility.
Why do people seek refinanced home loans?
If the thoughts of blogging maestros like VenkatAdabala are to be believed, then the home loans are primarily refinanced because of three prime reasons. The main reason is to reduce the prevailing interest rates. All those who would have taken home loans in the last three or four years would surely know that now is the time to opt for home loans which could offer them lesser rates of interest. The reduced interest rate automatically entails an increased ability to pay. One of the other major reasons for switching home loans would be to move from a floating interest rate to fixed rates. This ensures a fixed EMI to be paid every month and becomes easier to manage. Lastly, one is able to garner more equity with a new interest ratewhich may be lower than the previous one. One can easily use a home loan eligibility calculator to assess the different EMIs with different interest rates.
How to Go about refinancing Home Loans
One of the best ways to seek refinanced home loans is to seek them online. After a dry spell in the market and with the anticipation of lesser interest rates being available quite soon, lenders are preparing resources to highlight their revised refinancing schemes. In the current market, there are many resources which offer their details online. However no matter what the plan maybe it is vital to make note of the interest rate and the refinancing cost. The benefits of refinancing are assessed in the overall costs and one should not end up paying much more refinancing cost than necessary. Hence one should compare home loan interest rates andrefinancing costs both.
The best way is to go online and search for resources where numerous organizations pool resources and plans. There are home loan refinance calculators to help you assess how much cost is involved in the process. Then one can go ahead and search for plans online as well as offline. It is worth spending time on this research. With the right plan, there is a drastic reduction in the liabilities and a person is able to save a lot more in the long run.
Refinancing a home loan is just like a new one, only that you should have serviced the first one well for a stipulated amount of time.