How does housing finance companies work?

You can meet your business or personal expenses by taking a loan against property i.e. by mortgaging your existing commercial or residential property. Generally, you can get a loan of up to 50 percent of the market value of the property (as assessed by the lender). The tenure of the loan can extend to 15 years.

What is mortgage charges in home loan?

In a registered mortgage, the borrower has to create a charge on the property with the sub-registrar through a formal, written process, as a proof of transfer of interest to the lender as security for the loan. A registered mortgage meets all the necessary legal requirements to create a mortgage or a charge.

What is the difference between bank financing and in house financing?

The main difference between bank financing and in-house financing is that bank loans have longer payment terms. You can choose to pay out the loan amount in as short as five years, or as long as 20 years. Dealership in-house financing involves a shorter period to settle balance, usually up to five years.

What is the difference between banks and HFCs?

NBFC, as the name suggests, is a financial institution whose business includes only loans, and no other banking services like accepting deposits, fund transfers, payroll services, etc. Housing Finance Companies (HFC) are specialized NBFC, that deal only in Home Loans.

What are housing finance banks?

Housing Finance Companies (HFCs) are a part of NBFCs. You can choose between a bank or an HFC by comparing tenure, interest rate, and processing fees offered by them. Let’s take a look at some of the top housing finance companies in the country.

Why do we pay interest on loans?

Reasons for Paying Interest Lenders demand that borrowers pay interest for several important reasons. First, when people lend money, they can no longer use this money to fund their own purchases. The payment of interest makes up for this inconvenience. Second, a borrower may default on the loan.

Why do banks charge processing fees?

“Generally, banks charge a higher percentage of processing fee for a smaller loan amount while tend to give a discount in case the loan amount is higher,” said Gaurav Gupta, CEO, Myloancare. What other lenders are charging also has a bearing as every lender wants to stay competitive.

What is franking in home loan?

Franking is a process of getting your agreement stamped, thus confirming that you have made the Stamp Duty payment. Franking proves that your documents are legal.

Does in house financing report to credit?

No credit check – In-house dealers don’t care what’s on your credit reports or what your credit score is. You could have a repossession or bankruptcy, and neither one usually affects your approval odds with an in-house dealership.

What is an in house bank loan?

In-house financing is when a retailer extends a customer a loan for the purchase of its goods or services. The need for banks or other third-party lending institutions is eliminated through in-house financing.

Do HFCS charge different rates from banks for home loans?

So, the basis of charging interest on home loans granted by HFCs, is altogether different from the one adopted by the banks. These companies base their actual lending rates against an internal benchmark rate, which is called the Benchmark Prime Lending Rate (BPLR).

What are the charges associated with LIC Housing Finance Loans?

The charge may range from 0.25\% to 3\% of the balance amount, or the lender might fix a specific amount such as Rs.1,000+GST for LIC Housing Finance loans below Rs.75 lakh. Repayment Mode Swap Charge: You need to pay this fee if you want to change the repayment method or dates. It’s generally Rs.500 per request.

What is the role of RBI in housing finance companies?

Housing finance companies (HFCs) are regulated by the National Housing Bank Limited (NHB), a subsidiary of the RBI. The funding of housing finance companies, is different from those of banks. So, the basis of charging interest on home loans granted by housing finance companies, is also different from the one adopted by banks.

What are the current home loan processing fees of all banks?

Current Home Loan Processing Fees of All Banks 2021 Banks Processing Fee (Min. in \%) Processing Fee Amount (Min) IOB Home Loan 0.5\% Rs.20,000 Union Bank of India 0.5\% Rs.15,000 PNB HFL 1\% – Indiabulls Home Loan 2\% –