Things To Note Before Transferring Home Loan

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Things To Note Before Transferring Home Loan

You are struggling to pay the EMI’s on your home loan. You are deep in debt and don’t know how to come out of it. This is when you learn there is a way out of your problems. The home loan balance transfer, also called home loan switching or home loan refinancing.
things-to-note-before-transferring-home-loanWhat is home loan balance transfer?You are struggling to pay back your home loan EMI’s with your bank. This is when you come across…

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Things To Note Before Transferring Home Loan

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You are struggling to pay the EMI’s on your home loan. You are deep in debt and don’t know how to come out of it. This is when you learn there is a way out of your problems. The home loan balance transfer, also called home loan switching or home loan refinancing.
things-to-note-before-transferring-home-loan
What is home loan balance transfer?
You are struggling to pay back your home loan EMI’s with your bank. This is when you come across another bank, charging a lesser rate of interest to its home loan customers. You want to transfer your home loan from your bank to this new bank through a process known as the home loan balance transfer. Under the home loan balance transfer, you can transfer the entire unpaid principal amount on your home loan, from your bank to this new bank, which charges you a lesser rate of interest. The new bank then settles (pays back) the home loan, with your bank. (Balance principal amount).You will now have to repay the home loan to the new bank. The new bank will charge you a processing fee for the home loan balance transfer. You can negotiate with this bank to reduce or waive off the processing fee. The new bank will offer you a home loan at the same interest rate it offers its new borrowers.
Things to note before home loan balance transfer?
Remaining tenure of the home loan
When you do a home loan balance transfer you need to consider the amount you would save. It is pointless doing a home loan balance transfer, towards the end of the tenure of your home loan. There is very little time left for any meaningful saving. You must switch your home loan as early in the tenure as possible so that you get the maximum benefit out of the balance transfer.
Cost of the home loan balance transfer
When you do a home loan balance transfer, the difference in interest rates charged between the two banks on the home loan, should be sufficiently large. If the difference in interest rates between the two banks is not sufficiently high, the cost of the balance transfer would eat up any gains, you make from the home loan balance transfer. What are the costs involved in a home loan balance transfer? The new bank where you transfer your home loan might charge a processing fee for the home loan balance transfer. Fortunately for you the prepayment penalty on floating rate home loans has been removed. There might also be stamp duty charges. You need to consider all these costs when you balance transfer your home loan.
Your outstanding home loan principal amount
If you balance transfer your home loan very early in its tenure (say within a couple of years of availing the home loan), most of the outstanding home loan principal amount (home loan principal amount yet to be repaid), would be due. This gives you a chance to save on the interest costs of your home loan. It would be pointless doing a home loan balance transfer when you have repaid most of your home loan principal.
Save on time and effort
You must first try negotiating with your bank for a lower rate of interest. Your bank might be willing to retain you as a customer and would re-negotiate the home loan rate. This means your bank itself will offer you a lower rate of interest on the home loan. This would not only save you unnecessary costs in a home loan balance transfer but also time and energy.
You now know what you must do before opting for a home loan balance transfer.
For More Information On Home Loan

4 Steps To A Better Financial Future

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4 Steps To A Better Financial Future

Life is short. You don’t have much time to attain your financial goals. Planning is a must for you to achieve your financial goals. If you fail to plan then you are planning to fail. These 4 steps might just lead you to a better financial future.
biggest-financial-decisionStart saving your hard earned moneyYou work very hard to earn your money. Do you want it to flow down the drain? If not, you better start saving your…

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4 Steps To A Better Financial Future

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Life is short. You don’t have much time to attain your financial goals. Planning is a must for you to achieve your financial goals. If you fail to plan then you are planning to fail. These 4 steps might just lead you to a better financial future.
biggest-financial-decision
Start saving your hard earned money
You work very hard to earn your money. Do you want it to flow down the drain? If not, you better start saving your money. Money comes and money goes. How would you benefit if no money remains with you?
You must save money for an emergency. Emergencies strike when you are least prepared. Medical emergencies can empty your pocket in no time. A natural calamity like the recent floods in Chennai can leave you completely broke. You need to set aside money for at least 3 months of living expenses. If you are married you need to set aside money for at least 6 months of living expenses.
Avail a loan wisely
There is a famous saying by Ogden Nash.Some debts are fun when you are acquiring them, but none are fun when you set about retiring them.”
You must be very careful while availing a loan. If you are availing a personal loan which is called an emergency loan, then you better make sure it is an emergency. If you avail a personal loan to go on a foreign trip or buy a costly electronic gadget, then you are making a serious mistake. Personal loans charge a very high rate of interest. You might struggle making the repayments. This is a bad loan for you.
If you have to avail a loan, make sure it is a good loan. Avail a home loan which not only gives you a roof over your head, but also can earn you rental income in the future.
Invest for your financial goals
Your financial goals may be short term, medium term or long term. You must invest your money wisely to get to these goals. If you want to go on a foreign trip a year from now, this is a short term goal. Buying a car about 3 years from now. This is a medium term goal. Planning for your retirement about 10-15 years from now. This is a long term goal.
You must invest in fixed income instruments to achieve your short and medium term goals. While investing in fixed deposit is generally followed, you must also consider investing your money in debt funds. You can invest your money in debt mutual funds or even fixed maturity plans to meet your short and medium term goals. Fixed maturity plans have a fixed lock in period of 3 years. They also have a portion of your money invested in equity. You must invest in fixed maturity plans only when you are sure of your financial goals.
For your long term goals invest in equity such as equity mutual funds and shares. This investment easily beats inflation in the long term.
Diversify… Diversify… Diversify….
You must have heard the famous saying Don’t Put All Your Eggs In One Basket. If the basket falls, all the eggs are broken. Investing money across different financial assets is called diversification.
You must diversify your investments. Invest some of your money in gold. Some of your money in equity. Some of your money in fixed income. Some of your money in real estate. This is the diversification benefit. Stock markets may crash, but gold and real estate prices may rise. Your money is safe.
So follow these 4 steps and enjoy a bright financial future.
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Common Mistakes While Investing In The Stock Market

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Common Mistakes While Investing In The Stock Market

Why do you invest in the stock markets? If your answer is for your money to double in no time, then you are not alone. You have lakhs of fellow investors looking for the same thing…. Money Doubling In A Matter of Months If Not weeks….. However if you esquire with friends and relatives before you decide to invest your hard earned money in stocks, you will find tales of grief. Many of your friends…

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Common Mistakes While Investing In The Stock Market

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Why do you invest in the stock markets? If your answer is for your money to double in no time, then you are not alone. You have lakhs of fellow investors looking for the same thing…. Money Doubling In A Matter of Months If Not weeks….. However if you esquire with friends and relatives before you decide to invest your hard earned money in stocks, you will find tales of grief. Many of your friends and relatives have lost a lot of money in the stock market. How did this happen? Well…they made some costly mistakes while investing in the stock market.
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The Infamous Herd Mentality

Blindly following others. This is the herd mentality. You cannot make decisions for yourself. This is when you follow the herd. Sheep are known to do this.
You see your friends making a lot of money in the stock market. You imitate their investment strategies thinking…well they made money this way. Now it’s your turn. You need to remember that your friend’s financial goals are different from your financial goals. How can their investment strategy apply to you?
It is very difficult to identify a winning stock. Everyone wants to buy winning stocks. Most of the time you end up buying stocks because everyone is buying them. You invest blindly without doing your research. When the stock price crashes, it is too late for you to exit the stock market. You and several of your fellow investors suffer a heavy loss. You need to understand the Company whose stock you plan to purchase. What is the business of the Company? What are its products or services? Is its business profitable? What are its growth prospects? Does it have a capable top management?

You put all your eggs in a single basket

You have done your research and identified a very good stock. Should you invest all your money in this single stock? No, definitely not. You need to diversify your investment in stocks. You need to invest in stocks of different sectors. If one sector is doing badly, (say oil and gas or pharma sector is doing badly), then IT or automobiles might be doing well. If your pharma stocks have taken a hit (crashed badly), then you can still be happy…at least your IT stocks are doing well.

Put a lid on your emotions

You have bought a stock for INR 100. You expect the price of this stock to rise to INR 150 in a few months. Unfortunately the price of this stock has crashed to INR 50. You have not sold the stock. You tell yourself…. This is just a paper loss. (Notional loss). The stock price will soon go up. However it has been several months and the stock price is still languishing at INR 50.You have not sold your stock. An emotion takes over …Hope…You are confident that the price of the stock will rise, at least a year from now.
The stock price has not risen even a year later. This is when another emotion takes over…Regret…. Your friends had told you not to invest in that stock, but you did not pay heed to their advice.
Investing in the stock market is not rocket science. If you avoid common mistakes while investing in the stock market, you can profit from your investment.
For More Information On Investing in Stock Market
 

Why You Need A Financial Advisor?

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Why You Need A Financial Advisor?

Do you love discounts? Silly question to ask. Just see the line in front of stores which offer discounts. The same holds true for investments. Many investors do not like paying commission to mutual fund distributors and financial advisors. They believe this is a waste of money. Why not invest in direct plans of mutual fund schemes and save on commissions paid to mutual fund distributors? You may…

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