Home loans are a boon for people who buy properties in an age where prices skyrocket every other day. It has taken a pandemic to bring the rates down, that too, by a very slim margin. Nonetheless, securing a home loan becomes mandatory for any homebuyer to save them the trouble of securing a considerable amount or putting in all their savings into buying a house. Without a home loan, purchasing a property today remains just a dream.
When a person chooses a financial institution that offers a home loan, they consider various factors, like the rate of interest to be paid, the period of instalment pay-outs, and the institution's flexibility. The bank's health is also a factor to consider. However, often a person take a home loan and then discovers that there is a different institution offering a better deal in terms of interest rates.
There is a way to switch financial institutions depending on the flexibility and the interest rates. If one is looking at a low-interest rate with other significant advantages, the outstanding balance of the loan amount can easily be transferred to the new institution. In this case, the new institution will pay your old institution the due amount of the loan.
That said, other parameters need to be considered while considering a home loan transfer. An eligible person must pay a minimum of 12 instalments to avail the benefit and have a good credit score. There is also a minimum loan amount that the lending institution will ask for a balance transfer. Then an application can be prepared for a new housing loan to the new institution. Many companies offer the service online too.
A person must ensure that the paperwork is in order, like bank statements, photocopies of identity proof, address proof, photos and income documents. The other documents that will be needed are a letter from the present bank that lists the papers they have; the letter mentions the balance on the loan that is left to be paid and property documents.
Next comes the foreclosure formalities. The new lending organisation carries this out. A new agreement is framed for the new home loan. What a person must consider are the additional costs that need to be borne for a transfer.