Home Loans - Things You Must Know

Given the boom in real estate in India, housing/home loan has become the most popular form of loan. This type of loan benefits the middle class the most in their quest of fulfilling their lifetime dream of owning a house. One should look into the details of a housing loan before deciding on going in for any of the numerous offers available. 

Floating Rate.

 


The floating rate on housing loans is a pattern where the rate of interest is not stable. The interest rate fluctuates with the change in the rates in the economy. The borrower can gain form this type of interest charge when there is a dip in the rate of interest, bringing down the cost of the loan. This could also take a turn for the worse incase of an increase of the rate that takes the cost to a greater height.

 

 

Fixed rate loans are the loans that have a stable rate of interest. Here the rate of interest is unaffected with the changing market scenario. This loan is taken by people who prefer to know the exact cost of the loan and are happy to pay a fixed amount or when there is an expectation of a rise in the market value. However, there is a clause attached with the fixed rate pattern that could actually result in floating rate loan. The rate of interest could come up for review after a certain period of time in order to keep in accord with the market condition. This would lead a need for a change in calculation by the borrower with the earlier being thrown out.

 

 

 

   
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