Common misconceptions to avoid while signing Indian overseas bank home loan

Buying a home is definitely a long term financial commitment. Since making the big purchase with savings alone is practically not feasible for everyone, especially in this inflation era, people almost end up going for Indian overseas bank home loan to make the purchase affordable. To no doubt, home loans are great financial solutions to fulfil the dream of owning your own property.

However, despite being the most convenient solution, there are certain misconceptions linked to this popular loan variant. The reason why these myths are floating is due to relying on the incomplete or half-baked information.

With so many myths and misconceptions doing round, this article draws attention to the most common misconceptions or myths unnecessarily frightening the home buyers.

Lower interest rate is always better:

Definitely, rate of interest is one of the key deciding factors to zero down on the housing finance option. However, opting for the lowest interest rates is not always the best solution. This is because it is essential to consider all other fees and charges involved such as processing fee, service charge, administrative charges and so on. Therefore, make sure that you don’t end up making costly deal by just considering the rate of interest.

20% down payment:

Generally, it is believed that even after opting for Indian Overseas bank home loan, you need to deposit around 20% of the property price as down payment. Though, this is not always applicable due to the fact that loan qualifications are dependent on LVR (loan to valuation ratio). People may not be aware that they have varied choices as in some cases, the bank offer home loan with LVRs at whopping 100%.

Short term tenure is better:

Many borrowers believe that opting for a shorter tenure helps them to repay the loan quickly and saves hefty money from paying as long-term interest. However, this is true to some extent, but by doing so, usually borrowers end up getting financially stressed out as shorter tenure implies higher EMI value or payout. In addition, higher EMI payouts may also improve the chances of your next loan application due to higher Fixed Obligation to Income Ratio (FOIR).

Current bank offers best home loan:

Though many commercial banks and financial institutions claim to offer the best home loan to their existing customers, this is probably not always true. For instance, even if you don’t have an account with Indian overseas bank, you can rest assure to get the best Indian overseas bank home loan deals with added privileges.

Hence, before you zero down on any home loan deal, make sure to clear all the misconceptions you have. For more details, visit https://www.applykaroo.com/loans/indian-overseas-bank-home-loan.