The new lender/bank approaches your application for a house loan balance transfer similarly to a new home loan application, but with a little difference. This is due to the fact that transferring your house loan balance to a different bank constitutes a refinancing of your current mortgage, commonly known as “home loan take over.”
Home loan balance transfers are intended to reduce interest costs by transferring the loan balance to a lender or bank that offers lower best home loan interest rates. Home loan balance transfer is a desirable alternative at that time, especially if you are unhappy with the service. When interest rates in the economy decline, not all lenders reduce interest rates in the same scale for a number of reasons.
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Why should you do home loan balance transfer?
While doing HLBT, be mindful of the processing charge (which is typically up to 1% of the loan amount) that must be paid to the new lender/bank. If your credit score—which represents your credit history and credit worthiness—is acceptable or if they are running a special promotion for a limited time, a lender or bank might occasionally lower or waive the processing charge in order to win your business.
Keep in mind that the advantages of moving a mortgage must exceed the disadvantages. Idealistically, it should lessen your Equated Monthly Installment (EMI) load and help you pay off your mortgage faster. Negotiating the terms of a house loan balance transfer is crucial because this has a beneficial impact on your credit score.
Another advantage is that, if you are qualified and under the age restriction, the bank to which you are moving your loan will allow you to change the loan’s term. You can change your EMI load using this.
When you transfer your loan, you can also get a top-up that you can spend for personal expenses.
To determine how much you could save by transferring your house loan to Axis Bank, use the balance transfer calculator.
The following papers are needed for a house loan balance transfer
- The present home loan lender or bank is in possession of the relevant property paperwork.
- The loan statement copy (preferably an attested copy by the bank)
- bank statement for the previous 12 months showing the source of the EMI deductions
- There is no objection certificate or authorization from the current bank.
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How to Transfer Your Mortgage
The steps listed below can be used to refinance your mortgage:
- Obtain from your current lender all the paperwork required to transfer the rest of your mortgage.
- Obtain a letter of approval from the current bank and the outstanding loan balance.
- Give these records to the new bank to whom you want to transfer the rest of your mortgage.
- The debt owed to your former lender will subsequently be settled by the new lender.
- Your old loan account will then be terminated, requiring all future loan payments to be made to the new bank.
- The transfer of your home loan will then be fully completed when all property paperwork is delivered to the new bank.
The Bottom Line
You can use the Home Loan Balance Transfer Calculator to see whether choosing the transfer is a smart move. You can compare the home loan interest rates provided by the previous and new lenders using this calculator, an online tool. All you have to do is, enter basic facts about your loan such as:
The original loan’s outstanding principal, Duration of the Loan and the loan’s interest rate
The savings you can get from choosing a home loan balance transfer will be shown by the calculator. Thus, allowing you to build a good selection.
