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Hello everyone and welcome to episode 139 of the ET Wealth Wisdom Podcast
I am Tania Jalil
For example, home buyers should consider the total cost of the house (base price, including GST).
Parking fee, stamp duty, registration, brokerage, etc.) before buying, home loan borrowers
The ‘cost effective’ of the housing loan should also be considered.
Home loans have a commitment of 15-20 years and hence, borrowers should consider all the costs and
Take a decision accordingly.
This week’s ET Wealth edition had a story on how one can choose the best home loan
Here’s a look at how one can do it
“Banks cannot state all charges in advance. Since fee processing can come with different names like
Fees, legal and technical charges, cost of stamp paper, GST, etc, ask them about the total cost
With loans,” says Aparna Ramachandra of RectifyCredit. com.
Banks usually insist on insurance for the home, an additional cost that you need to take into account.
Maths.
Some lenders offer to waive these charges, but make sure the bank isn’t charging them.
by proxy.
Since these charges vary from bank to bank, it will be difficult to compare them.
A better approach is to deduct these charges from your home loan amount and recalculate the effective
Cost.
For example, assume you are taking a home loan of Rs 50 lakh with a repayment tenure of 20 years
And the total charges involved are Rs 20,000.
At 7% interest rate, the EMI will be Rs 38,765.
Since you have to make an upfront payment of Rs 20,000, this is equivalent to taking a net loan of Rs 49.80 lakh.
In other words, you are paying an EMI of Rs 38,765 for a net loan of Rs 49.80 lakh and interest thereon.
The cost becomes 7.05%, an additional cost of 5 bps.
Once you calculate this for all lenders, it will be easy to compare.
While the interest rate is important, borrowers should also consider the ease of obtaining a loan.
processing time taken by the bank).
Ask friends or relatives about their experience with different banks.
It is also wise to take a pre-approved home loan before buying your dream home.
On that note, that’s all for this week.
Come back next week for more money knowledge