Best Loans For First Time Home Buyers

Introduction

Owning a home is everyones dream. Today, even the very young are able to afford a dream home. Thanks to home loans. For first time home buyers, home loans are been offer at discounted interest rates. The various home loans offered by various banks and finance institutions on the market have made it easy for youngsters to fulfill their dreams at a young age. Nationalized as well as private banks provide easy home loans for first time home buyers.

The concept of easy home loans for first time home buyers was first introduced in India by nationalized banks. But with the passage of time many private banks entered the arena. In the present scenario the private sector banks are giving a very tough competition to the nationalized banks. Previously the concept was different. But the idea has undergone many changes with time. Previously only fixed rate of interest prevailed on the market. But later on, the concept of floating rate of interest was introduced for loan seekers.

Features

Here are some important features that first time home buyers need to keep in mind:

• The single major factor that should be always kept into consideration is the rate of interest. Always opt for lower rate of interest rates. A lower rate of interest means higher payment of principal amount. It also means payment of lesser amount of installment every month. Presently various banks are offering interest at lower rates. Nationalized banks as well as private banks offer home loan plans with lower rates of interest.
• The next important thing to be kept in mind is the type of interest. There are two types of interest, fixed and floating. some of the banks especially in private sector have stopped giving fixed rate of interest.
• The third important factor is the tenure of the loan. A longer tenure implies lower rate of interest and vice versa. Generally tenure of 20 years is permissible. But tenure of over twenty years will require banks consideration.
• The next thing that the banks ask for is down payment. This is tactic used by the bank for ensuring that the person taking loan has a stake in the house from the beginning. Generally an amount of 15 percent of the amount of loan is asked by the bank as down payment.
• Next the banks charge a certain amount as a processing fee for your loan. This is normally 0.5 percent of the amount for first time home buyers.

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