5 Common Myths against Home Loans Which Should Be Demolished!

Posted on 6 April, 2022 by Finway FSC

There are some common misunderstandings or fallacies concerning house loans in today's market. EMIs, or equated monthly payments, have become one of the key subjects of conversation for home purchasers now that interest rates on home loans have decreased. With so many myths regarding Home loans, it's easy to fall victim to them; if you don't know the realities, you can get the best home loan in Delhi; just be careful of these myths.

Myth: 1 - A high-interest rate equates to higher monthly payments.

When borrowers are charged a higher rate of interest on their house loan, their first instinct is to increase their monthly payments, which will cause them financial difficulties. If the interest rate on your house loan is high, the bank may extend the term for you so that you don't have to make a large monthly payment. Although you may wind up paying a large interest amount in the long term, your month-to-month financial planning is unaffected if the rate is high. Remember this while applying for the best home loan in Delhi.

Myth #2 — Paying in advance always results in penalties.

This isn't always the case, though. Pre-payment penalties are usually assessed during the first three to five years of a house loan. In addition, the price is reduced during the loan.

Myth #3 - The Best Loans Have the Lowest Interest Rates

It is a widely held belief in the marketplace that house loans with lower interest rates are the best. However, what you think you see isn't necessarily accurate. If a house loan has a low rate of interest and has fees such as a legal valuation fee, a prepayment penalty, and so on, you might wind up paying a lot more for an ostensibly cheaper loan.

Myth #4: Fixed-rate mortgages are better than adjustable-rate mortgages.

You should not be swayed by a single phrase when it comes to interest rates. If you choose a fixed rate house loan, it does not guarantee that you will keep that rate for the duration of the loan. Fixed-rate home loans have a rate that stays the same for a certain length of time. The money market clause and interest rate resetting apply for the remainder of the term.

Myth #5: Banks are unconcerned with the applicant's employment situation.

This is yet another popular misconception that exists in current times. Banks are quite worried about the creditworthiness of home loan applicants. The applicant must keep the bank or lender informed on his or her retirement, work status, unemployment period, and other relevant information, and you can also get benefits with a free cibil score.

Conclusion

A home loan bridges the gap between the aspiration of owning a home and the reality of doing so. However, before you purchase a thing, you must first educate yourself about it. Compare several home loan options and select the one that best matches your needs; you can do this with the help of Finway and get help in a free cibil score.

Get some helpful tips here: Are you in Urgent Need of Cash? Learn these methods to Avail Quick Loans!