Why Should You Go For A Home Loan Balance Transfer? - Magzinenow

Why Should You Go For a Home Loan Balance Transfer?


home loan balance transfer

Right now, home loan interest rates are at their lowest level in decades. It is time for you to file for a house loan balance transfer, nevertheless, if you are still paying your EMI payments on your mortgage at the old rate.

What is a balance transfer for a home loan? And how does it help you?

A house loan balance transfer involves moving your current mortgage from one bank to another in order to take advantage of a lower interest rate, terms, and other advantages.

High interest rates have a direct effect on your finances and may act as a hindrance to your ability to flourish financially. Being in a lot of debt could also be stressful. Your only hope of surviving may be to foreclose on your mortgage before the tenure period has passed. However, not everyone can easily foreclose a sizable debt. In this situation, selecting a house loan balance transfer might be beneficial and cost-effective for you.

What is the Process of Balance Transfer?

During a home loan balance transfer, the remaining loan balance of your existing mortgage is transferred to a new lender. The new lender also gives you money to pay off your previous loan.

For this, the borrower must file an application asking for a balance transfer to both If the new lender agrees to assume the existing mortgage, they will pay the remaining balance to the current lender and start a new loan account with themselves for the same amount.

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When the current lender pays the outstanding balance, they must transfer the deed to the property and give a no-due certificate to the borrower.

Benefits of a Home Loan Balance Transfer: Lower EMI and Interest Rate

The lower interest rate is one of the main arguments for choosing a home loan balance transfer. Going for a balance transfer works in your favour and enables you to switch your loan to the lower rates with a new lender when you are paying. Other lenders are providing the loan at lesser rates while you are paying a higher interest rate. Your EMI is further reduced as a result, saving you a significant amount of money each month.

Helps you obtain better loan terms: 

Various lenders offer a variety of terms for their loan services. Additionally, moving your loan to a lender who is offering the same loan at terms that are more favourable to you can aid you if you have taken out a house renovation loan with unfavourable terms.

Foreclosure and prepayment charges:

Banks are entitled to impose a par-closure fee ranging from 2% to 4% of the outstanding balance for house loans with a set rate of interest.

Therefore, borrowers who want to prepay or foreclose on their mortgage and are paying a floating rate of interest should without a doubt do so.

Top – Up Loan Amount:

One more advantage of house loan balance transfers is the availability of top-up loans. You can receive some money in addition to the total that is still owed when you transfer your balance.

But there are a few things you should make sure of before you transfer your balance.

  • Make sure the remaining repayment time is longer than five years.
  • Make sure you haven’t missed any EMI payments on the current loan.
  • Make sure you have all the paperwork related to the property available.
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In conclusion, a home loan balance transfer is a fantastic feature that enables you to lessen your debt load and EMI strain. Home loan balance transfers can also assist you in receiving better loan terms, a top-up loan, a cheaper interest rate, and in some cases, particularly designed offers.


Adil Memon

Hello, my name is Adil Memon and I am a blogger. I enjoy writing about technology and fashion topics. When I'm not blogging, I can be found playing cricket or spending time with my family. Follow my blog & Visit my website here. Petco Nail Trim Prices. BRG Lê Văn Lương.