Have you taken out a mortgage loan but feel your present lender is charging you a high interest? It’s time you consider getting your loan transferred. But even in the case of a better rate of interest, you should be cautious before transferring the loan to another lender.
This article gives a brief overview of the factors you should consider before making a switch.
Factors To Consider Before Deciding In Favour Of A Mortgage Loan Transfer
1. Check The Overall Amount: Your new lender may offer you a more lenient repayment option. The value of the EMI may be smaller and the loan tenure may be longer. But you should keep an eye on the final and total amount to be repaid. Remember that each EMI carries an interest component. So, a higher number of EMIs may lead to an overall larger payment made to the loan provider.
2. Calculate All The Fees Involved: When you begin your association with a new lender, you must fork out several fees. These include the processing fees, administrative fees, technical fees, stamp duty, legal fees, and so on. A mortgage loan calculator will help you assess how much extra you should pay for these fees. Make the transfer only when you will make a profit. Otherwise, continuing with your existing lender may be a wiser option.
3. Value Of Outstanding Loan V/S Mortgage Value: Suppose you have already repaid a large percentage of the loan. In this case, check the value of the collateral before making a mortgage loan balance transfer. You don’t need to have a collateral that is higher in value than the amount to be repaid. Negotiate with your new lender to check if the values could be adjusted. Make the transfer only after you strike a good deal.
4. Additional Benefits Offered: A loan is not just about borrowing and repaying money– it is also about convenience and ease of repayment. You need to have a lender that allows you to carry out your transactions in a simple and efficient manner. For instance, you should be given a zero-balance account in the bank from where you take the loan. You should have access to the netbanking facilities through which you can pay your EMIs. You must have a relationship manager who would help you with your queries. Before making a transfer, make sure your new lender has these facilities on offer.
5. Terms And Clauses: Never be in a hurry to transfer even if you get instant mortgage loan approval from a new lender. Take your time and go over the loan clauses. You should comb through the fine print to check if there are any hidden charges or mandatory clauses. You should look to transfer your loan to a lender that doesn’t have too many complicated clauses. This will help you prevent unnecessary issues from cropping up later on.
6. Added Benefits: A new lender may attract you by offering a free credit card or good insurance cover. While these might be helpful, you need to see if they would be of any real use to you. Do not transfer your mortgage loan simply because you stand to get a credit card that you are never going to use! But if a new lender has some genuinely good offers for you, do take them into consideration and make a switch.
Choosing A Lender
Banks and NBFCs like Bajaj Housing Finance Limited offer pre-approved mortgage loans. In fact, Bajaj Housing Finance offers a maximum loan amount of Rs.3.5 crore. You can repay this loan with interests over a maximum period of 20 years.
Last But Not Least
Carefully consider all the points mentioned above before going for a mortgage loan transfer. You must calculate the mortgage loan interest rates and the fees. You must also take the points of convenience into account. Once you are sure that a mortgage loan transfer will help ease your repayment process, you are good to go.
This article gives a brief overview of the factors you should consider before making a switch.
Factors To Consider Before Deciding In Favour Of A Mortgage Loan Transfer
1. Check The Overall Amount: Your new lender may offer you a more lenient repayment option. The value of the EMI may be smaller and the loan tenure may be longer. But you should keep an eye on the final and total amount to be repaid. Remember that each EMI carries an interest component. So, a higher number of EMIs may lead to an overall larger payment made to the loan provider.
2. Calculate All The Fees Involved: When you begin your association with a new lender, you must fork out several fees. These include the processing fees, administrative fees, technical fees, stamp duty, legal fees, and so on. A mortgage loan calculator will help you assess how much extra you should pay for these fees. Make the transfer only when you will make a profit. Otherwise, continuing with your existing lender may be a wiser option.
3. Value Of Outstanding Loan V/S Mortgage Value: Suppose you have already repaid a large percentage of the loan. In this case, check the value of the collateral before making a mortgage loan balance transfer. You don’t need to have a collateral that is higher in value than the amount to be repaid. Negotiate with your new lender to check if the values could be adjusted. Make the transfer only after you strike a good deal.
4. Additional Benefits Offered: A loan is not just about borrowing and repaying money– it is also about convenience and ease of repayment. You need to have a lender that allows you to carry out your transactions in a simple and efficient manner. For instance, you should be given a zero-balance account in the bank from where you take the loan. You should have access to the netbanking facilities through which you can pay your EMIs. You must have a relationship manager who would help you with your queries. Before making a transfer, make sure your new lender has these facilities on offer.
5. Terms And Clauses: Never be in a hurry to transfer even if you get instant mortgage loan approval from a new lender. Take your time and go over the loan clauses. You should comb through the fine print to check if there are any hidden charges or mandatory clauses. You should look to transfer your loan to a lender that doesn’t have too many complicated clauses. This will help you prevent unnecessary issues from cropping up later on.
6. Added Benefits: A new lender may attract you by offering a free credit card or good insurance cover. While these might be helpful, you need to see if they would be of any real use to you. Do not transfer your mortgage loan simply because you stand to get a credit card that you are never going to use! But if a new lender has some genuinely good offers for you, do take them into consideration and make a switch.
Choosing A Lender
Banks and NBFCs like Bajaj Housing Finance Limited offer pre-approved mortgage loans. In fact, Bajaj Housing Finance offers a maximum loan amount of Rs.3.5 crore. You can repay this loan with interests over a maximum period of 20 years.
Last But Not Least
Carefully consider all the points mentioned above before going for a mortgage loan transfer. You must calculate the mortgage loan interest rates and the fees. You must also take the points of convenience into account. Once you are sure that a mortgage loan transfer will help ease your repayment process, you are good to go.
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