Buying a Home? Do it With Free Housing Loans

The old saying “A home is built of hearts and a house is built of bricks”, it is very true. Each person should have a home, a dream home, a place to return to after a hectic and busy day. It is a place which lightens your mind, frees you from all sorts of worries and gives you a sense of belonging. Whether you buy a home with your own funds or you buy it with home buyer loans, all this holds equally true.

There are various private agencies ready to fund your dream home and also government giving you a helping hand through free housing loans. The US government has decided to offer home buyer loans in order to improve the standard of living of citizens in general and also to help homeless people as shelter is one of the basic needs. People can apply for free housing loans in many ways; mortgage is one of the oldest methods of taking a loan. It is just giving a security to the money lender to claim the debt amount in case the borrower fails or refuses to repay the loan.

Choosing a home loan is one of the difficult tasks in this economy, but things are made easy with free housing loans. Before applying for a loan it is necessary that have a plan of the total money you are going to spend on this venture. It is necessary that you stick to this plan and budget. Free housing loans provide the borrower a sense of relief and of course, a roof over his head!

The present government in the US is focusing on creating awareness among people about the free housing loans, Home Buyer Loans and grants. But prospective first- time home owners should beware of scamsters in their midst claiming to be government agents and asking you to sign on documents pertaining to your assets.

The government also provides counselors who come an guide you through the process of acquiring a free housing loan.

Comparison of Housing Loan Companies in India

In India, we can find a majority of middle class peoples and these people are often found to be building or purchasing houses or apartments to live in. we can see houses under construction almost everywhere nowadays. The money to build these homes is mostly obtained through housing in India. Therefore we can say that loans in India have become inevitable for buying or constructing or renovation of a home or apartment. We can find a number of housing loan providing companies in India for Indian residents as well as for NRIs to construct a home, to buy a home or plot to build house, or to renovate or refurbish a home. Let’s go through some housing loan comparisons in India.

Housing loans are provided in India for a long period to repay the loan, most probably up to 20 years. The interest rates also vary from city to city as well as company to company. The interest rate may also depend on the time taken to repay the loan amount. The home loan lenders in India first of all will go through the financial status of the customers who require the home loan before providing it. This is to ensure that the customers could pay the installments in time.

Bank of India provides a popular housing loan, star home loans which provides loans to Indians to purchase a plot for construction of a house, to construct a house or flat, to purchase a house or flat, furnishing of house, renovation or repair or alteration or addition to house or flat as well as for the takeover of customers housing loan extended by other banks or FIs or NBFCs, all these at highly flexible and liberal terms and conditions.

SBI or state bank of India is one of the most popular as well as trusted bank in India and it provides housing loans for the Indian residents as well as for the NRIs. SBI housing loan schemes are designed in such a way as to make it as simple as possible for its customers.

PNB or Punjab national bank is another renowned bank in India which also provides housing loan. PNB loans can be availed fast with friendly and the most convenient home loan schemes. Home loans in PNB are provided for the construction or purchase of house or flat or for the purchase of house or flat on first power of attorney basis from the original allottee and for carrying out repairs or renovations or alterations or additions to the existing house/flat.

HSBC also provides home loans which make it easier for you to move in as soon as possible without putting a strain on your financial condition. HSBC provides home loans ranging from 5 lakhs to 3 crores.

There are a number of other banks in India which provides housing loan and some of them are Citibank standard home loan, Dena niwas housing finance scheme, standard chartered India home loans and much more.

So, we came across some comparison of housing provided in India by the various banks. So, what are you waiting for? Go grab your home loan from the best bank with reasonable rates.

How Large Should My Housing Loan Down Payment Be?

The moment you decided to purchase that house of yours, you will have to decide how much of a down payment to pay. Traditionally, most people go for the mainstream 20 – 80 payment, meaning that the payment consists of 20 percent cash or CPF and 80 percent of housing loan. However, there are always people who go for a 10 – 90 or even a 40 – 60 payment structure. How do you decide?

Are you stretched out financially?

If you have substantial amount of debts to service, it is best that you do not pay too large of a down payment. Leave some working cash in your savings or money market account to preserve that needed liquidity. Let’s talk about Chris; He is an Army Officer who has about $250,000 in his savings account. When he bought the new HDB 5 room flat, he was determined to pay down his housing loan as soon as possible in order to be debt free. He then uses all the money in his savings account for that. Unfortunately, his wife got seriously ill and the insurance was unable to cover all the medical expenses. Most of his salary was used to service his car loans, student loan, personal loans and previous credit card loans. He then had to resort to using additional expensive credit cards to tide over the period. He thought of getting an equity loan but he is unable to do it with a HDB flat. He decided to sell off his flat and downgrade to a smaller apartment. Too bad he could not get a buyer fast enough and the interest from the credit cards are starting to hurt him financially. What is the lesson that can be learnt from Chris? Leave yourself some savings for emergency use, because you never know what is going to happen. Making that large payment by wiping out your savings cushion may not be a wise move when you are already highly leveraged in debts.

Are you planning to stay in the house for long?

This is an important factor when you have to determine that down payment. If you are planning to stay in your house for long time, it makes sense to pay more and to be housing loan free as soon as possible. By paying more, you have more equity in your property and certainly is a big step towards full ownership. Psychologically, it clears off the housing loan load off your mind. If you are not planning to stay in the house for long but look upon it as an investment, then it make sense to pay as little as possible. Instead of making a large down payment, free up that cash and invest in instruments that can beat the inflation rate. This strategy requires you to have strong cash flow, and if you are, then opting for a 10 – 90 payment may not be such a bad idea after all. Sophisticated investors might leverage on an interest only mortgage. Interest only mortgage can be structured with or without an expiry period. Talk to your mortgage advisor for more details.

How strong is your salary?

If your personal cash flow is not strong enough to purchase that dream house yet your bank officer recommends a 10 – 90 financing structure for you. Think about it. A 10 – 90 payment structure normally comes with higher interest rates. Let’s just say your salary is really not strong enough, but you decide make a 10% down payment. After which you are charged with a higher interest rate than the traditional 20 – 80 housing loans. With that comes a higher installment, which means a larger portion of your salary has to be channeled to that housing loan every month. Throw in some unforeseen financial burdens and it could very well be the start of your debt nightmare. Prevent this from happening by talking to your mortgage advisor, and have him or her to advise you. Be careful when your bank officer tries pushing you to take up a housing loan that is beyond your means.

Determining that down payment can be very stressful but by making an informed decision, it certainly saves you a lot of potential problems that might surface in the future. Do not rush into a deal too quickly without considering its implications. Although lenders automatically limit your borrowing capacity, do take note that they are telling you the maximum amount of money you can borrow. Work with your mortgage advisor to determine the safe amount of money to borrow, not the maximum amount.