HDFC starts the slide for a Home Loan Run

HDFC (Housing Development Finance Corp) kicks of the low interest rate home loan buzz with the launch of just above 10 percent home loans. Though private banks always have a profit angle to operate with, HDFC yet again show its mettle by launching such public friendly schemes. Considering that just recently the rates were reduced by state run banks, HDFC clearly shows that it is ready for a twin battle against the state run banks as always and its private counterparts as well. No wonder HDFC still runs in the top ranks of the private bank while others have always had a choppy ride.

The slide is further enhanced for the female borrowers and have an even better discount rate compared to the existing offer. Meanwhile the SBI had started the discount trend in the home loan segment with 10.1 percent interest for the women loan applicants for loans till 75 lacs and 10.15 percent for the others. 

HDFC on the other hand will hand out the home loans at a rate of 10.25% for home loans up to Rs 75 lakh but the home loan has to be applied before January 31, 2015 and the participant must clear all the formalities and get the first disbursement amount by February 28, 2014. 

On the ruling from RBI in September, the situation was different after lending rates where spiked by 25 basis points and further topped up by another 25 basis points in October. This led to SBI increasing its home loans from 9.8% to 10%. HDFC also followed suit with addition of 10 basis points for both the new and old home loan customers.

However, in spite of these moves, the spending remains a major concern and hopefully with big players bringing in the offers should spice up the home loan market. Meanwhile the Punjab National Bank too has gone all out by removing the processing charges and offering a lower interest rate as well.

With respect to the low interest in the home loans for women, one must note that the lower interest rate applies if the applicant is only a woman. If the entire loan amount is borne by the woman applicant or if the woman is the first of the applicants in case of a joint home loan, or if the property is under the ownership of the woman. Only then they will get the extended discount in the home loan interest rate.

One might not feel a huge difference in terms of the .5 or .10 percent but if the loan amount is close to 75 lakhs or above the 75 lakh margin, then it surely reflects in the overall savings of the loan amount in the long run.

 
Punjab National Bank is also offering a 'Festival season Bonanza' home loan scheme for the individual applicants or only retail customers. The new home loan is expected to be priced at just 10.25% and this extends for all the home loans up to 2 crore rupees. The icing on the cake is further adorned with no processing fees and zero documentation charges not only for home loans but also for vehicle loans.

Simple process for Home Loans Approval with Bad Credit

Buying a home is measured as an excellent investment in today’s date and as overviewed by real estate professionals, the building market is now much friendlier towards buyers. But bad credit home loans are not that easy to procure. Lenders tend to make funds tighter while shelling out money as loan to bad credit holders.

However, buyers possessing less than perfect credit scores can also get home purchase loans by following the steps listed below.

Check your credit profile & fix errors, if any

First and foremost, you must check your credit record and get a clear idea of where you stand. All banks and every lender would check your credit score before sanctioning you a loan. You can do this beforehand by checking your CIBIL Transunion Score from the CIBIL website by paying a nominal charge of Rupees 470.

By doing this you can fix errors, if any, and take active steps in improving the score through responsible financial behavior prior to applying for a loan. There are several credit repair agencies too which can help you in revamping your credit record so that your credit score is pushed higher and you qualify easily for a low-interest loan.

Although it’s a fact that that almost 80% of loans that are approved go to individuals with higher than 750 credit scores, it’s also true that a score of 620-680 - though not perfect – is still approvable, if the underwriting queries are satisfied.

Choose your home wisely

It is wise to have a realistic attitude towards the home you plan to buy. If you are having a bad credit score its more than likely that you would procure a home loan, if at all, at a higher rate of interest. It’s important therefore that you trim your expectations and settle for a home that’s not too heavy on your budget. Otherwise, repaying your loan back in future would be financially strenuous, and in effect a massacre for your credit report yet again.

In simpler terms, buy what you can afford and choose not to default.

Shop around

To shop around for a home loan is easy these days, more so, because there are finance portals operating in the cyber area that are dedicated towards finding for patrons customized loans in accordance to their suitability. This is a better idea because you don’t need to apply separately to different lenders for getting your bad credit house loan and get denied repeatedly if things don’t work out. That is also supposed to affect your credit report adversely.

Simple filling of a form with required details in a reliable finance portal instead can bring available loan offers your way faster, and from here you can apply right away to lenders who provide bad credit house loans for your credit score.

Before you apply

• Improve your credit score.
• Have explanations and supporting documents ready to clarify instances of default in your credit record.
• Exhibit a steady income to your lender.
• Eliminate all debts.
• Exhibit responsible financial behavior.

Taking a loan jointly with a family member who holds a good credit record is another way of securing a housing loan with bad credit. However, financial agreement of that sort would mandate that person to be named as a co-owner of your home.