Important Things to Consider Before Switching for Home Loan

Borrowers often look for different measures that can help them reduce their interest rates and make home loan repayment easier. A home loan balance transfer comes as a great aid for individuals who are unable to bear excessive monthly interest charges and hefty EMIs. This process entails transferring your existing home loan account from one financial institution to another to enjoy lower interest rates and better service terms. 

However, before getting into that process, apart from using a home loan balance transfer calculator to compute liabilities, borrowers should take certain things into consideration. For instance -

• Charges associated while making the transfer

Since your primary goal is to alleviate your financial burden, you need to make sure that your current lender is not going to impose additional charges when you are making the switch. While the existing financial institutions can impose fines and additional charges, the new ones can ask you to pay for processing fees, administration, and other costs. Therefore, before getting into that process, it is wise to determine the overall cost you’ll need to bear using a home loan balance transfer calculator.

• Check your credit score

While availing a new housing loan, a decent credit score helps you enjoy faster approval and moderate interest rates. Having a high credit score comes with multiple benefits, even in the case of a home loan balance transfer. Lenders will be checking how you have handled the previous loans, if you have a history of defaults, etc., before approving the process. 

• Check if the new lender is offering top up loan facility 

While making the switch, borrowers should also check whether the new lender is offering a top up loan facility. A top up loan entails an amount that is available over and above the existing loan principal. Even the tenor against this top up can be similar to your existing one, making it easier to handle the repayment. 

In order to utilise the home loan refinance benefits, it is advisable to check the market rates and gather ample information about the new lender beforehand.