A major area of concern for home buyers is the loans they apply for. More so now when in the last six months it has changed many times, depending upon the RBI's policies, which have been changing rather too frequently. At present the market is abuzz with a lot of talk on teaser rates coming to an end and the new higher interest rates being applicable from April 1, 2010. With such fluctuating changes happening in the home loan rates since the past one year, how does the home buyer fare? The problem compounds with too many choices, offered by various banks. The decision is made after thorough comparisons are done, and even then, one may not be too sure.
Fixed rate home loans are history, as volatility in interest rates is a new reality. In fact, if one makes the home loan a deciding factor it would not be the best thing to do now as the current scenario has changed, although I must say reduction of loan interest rates do put people into action.
However it is important to decide soon. The customers should try to opt for limitedperiod offers that a few banks are offering for two to three years. Further, they should select a home loan that provides transparency in rate linkage to bank Prime Lending Rates so as to ensure that they get the benefit of downward rate revision in as timely manner as the upward movement. Overall, the customer needs to go beyond the interest rate comparison to decide the home loan as it is a long-term transaction
With the introduction of service tax on builders in the recent budget, property prices are also bound to go up. The proposed Direct Taxes Code (DTC) proposals are expected to shrink some of the tax benefits available to home buyers. In a scenario like this, it is better to decide now, if one has made up his mind to buy a home.
Looking at the present state of the economy, the rate of interest is increasing and is expected to go upwards in the future; hence it is advisable to go for a home loan at this stage. Also, the borrower will benefit if he goes for fixed rates instead of floating rates
Fixed rate home loans are history, as volatility in interest rates is a new reality. In fact, if one makes the home loan a deciding factor it would not be the best thing to do now as the current scenario has changed, although I must say reduction of loan interest rates do put people into action.
However it is important to decide soon. The customers should try to opt for limitedperiod offers that a few banks are offering for two to three years. Further, they should select a home loan that provides transparency in rate linkage to bank Prime Lending Rates so as to ensure that they get the benefit of downward rate revision in as timely manner as the upward movement. Overall, the customer needs to go beyond the interest rate comparison to decide the home loan as it is a long-term transaction
With the introduction of service tax on builders in the recent budget, property prices are also bound to go up. The proposed Direct Taxes Code (DTC) proposals are expected to shrink some of the tax benefits available to home buyers. In a scenario like this, it is better to decide now, if one has made up his mind to buy a home.
Looking at the present state of the economy, the rate of interest is increasing and is expected to go upwards in the future; hence it is advisable to go for a home loan at this stage. Also, the borrower will benefit if he goes for fixed rates instead of floating rates
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