this ppt is about the myths and facts related to home loan.

1. Home Loans – Myths Vs Facts

2. Overview: In today’s time, buying a home is an expensive affair.
From application fees to document charges, multiple costs are
incurred when applying for the entire process. buying a home
means the ability to make your aspirations a reality. Keeping this in
mind, we’ve busted some myths about taking a home loan.

4. Myth 1: You should take a home loan that has a low-interest rate
At first, taking a home loan at a lower interest rate may seem like the
best option. You may take a look at the home loan rate of your
financial institution. However, purchasing a home involves other
costs. For example, you need to consider fees like the application
fee, processing fee, etc.
Fact: The rate of interest that you will be charged will depend upon
factors like your credit score and your history of repaying loans on
time. Hence, simply taking a look at the home loan rate of your
financial institution is not a good idea.

5. Myth 2: A good Credit Score is the only important thing to getting a
Home Loan
Fact: You may wonder why your credit score is important when you are
applying for a home loan. A high credit score implies that an individual
is and is a part of the home loan eligibility criteria. Individuals with a
high credit score can increase their chances of obtaining a home loan
easily. Usually, a score of 700 and above is considered good. The score is
represented as a three-digit number.

6. Myth 3: People earning in cash do not get a loan from a registered
NBFC or banks
Fact: Your income type is an important consideration before any
company decides to offer a loan to you. After all, it is a crucial part of
the home loan eligibility criteria. There is a misconception that only the
local lenders will be lending you money if you are earning in cash.

7. Myth 4: A home loan authenticates your property Home
Loans
Fact: A home loan is a mechanism to purchase your dream home. It
does not authenticate or give a title to your property. Home
authentication and home loans are two different concepts that must not
be confused with each other.

8. Myth 5: Penalties are charged for home loan pre-closure
Fact: Many borrowers are afraid that they will be charged a penalty for
the pre-closure of a home loan. The Reserve Bank of India (RBI) has
banned banks and housing finance companies from charging penalties
for foreclosure of a home loan. (Only on home loans with a floating rate
of interest). In fact, if you repay a loan before the due date, it can help
you stay at ease knowing that you have repaid your debts.

9. Myth 6: A fixed interest is better than a floating interest rate
One common misconception that buyers have when applying for a home
loan is that a fixed rate of interest is better than a home loan with a
floating rate of interest.
Fact: The floating interest rate is better than a fixed interest rate. The
fixed rate of interest turns out to be more expensive in the long run than
the floating rate of interest. Given that Home Loan tenures are so long,
interest rates tend to change and the benefit is passed on to the customer
by the Home Loan provider.

10. Myth 7: One should opt for short term loans
Fact: Many borrowers have the misconception in their mind that short-
term home loans are better than long-term home loans. This is not the
case as a high EMI (equated monthly installments) can increase costs
for the borrower. In such cases, a borrower must opt for either a
medium or a long-term loan.

11. Myth 8: Your house is owned by the home loan company
Fact: Local lenders have transactional relationships, and your welfare
might not be in consideration but registered banks/HFCs focus on
developing a relationship with their clients. They recognize the fact
that they are with you for approximately 20-30 years, and hence
understand the importance of helping people find their dream homes.

12. Myth 9: Home Loan Providers never work for your interests
Fact: Home Loan Providers are always concerned for your
welfare and their primary interest is in assisting you so you are
able to service your loan. A home loan provider is your best
source for a loan. They are more concerned with giving you the
money you need rather than how much they will get out of it.
They try to ensure that you obtain the best loan possible so that
you may live in your dream home.

13. Conclusion
The knowledge of the above myths will help you save
time, and effort and eliminate risks when applying for
a home loan. Are you ready to start planning to buy
the home you want for yourself and your family
members?
so first you know all the facts