Help with a home loan!

diyguy · 27th July 2015, 10:36

I have kicked off my home loan transfer from LIC to HDFC and for this month there is a refund of the processing fee for the loan. In case anyone is considering it, now is the time.

S_U_N · 27th July 2015, 13:34

Quote:

Originally Posted by diyguy

I have kicked off my home loan transfer from LIC to HDFC and for this month there is a refund of the processing fee for the loan. In case anyone is considering it, now is the time.

Is refund only with LIC or other companies as well?

diyguy · 27th July 2015, 13:36

Quote:

Originally Posted by S_U_N

Is refund only with LIC or other companies as well?

It is from any bank to HDFC.

Oxy · 30th July 2015, 11:50

I booked a 2 BHK in a project called Sumadhura Shikharam last week.

http://www.sumadhurashikharamppc.com/

I approached Citibank for the loan. They refused me the loan saying that the builder is not listed with them. I hold a Citibank salary account since more than 8 years and also have a Citibank credit card.

SBI though has no issues in giving me the loan. Citibank's loss then I guess!

pahwa · 30th July 2015, 13:38

Just got another shock from LIC HFL. For my HL in 2009, the interest rate was increased to 11.75% in 2012, thus increasing EMI from 17k to 20k. This week when I went to branch to re-write my loan, I got to know that my loan tenure was increased to 25 years (no intimation, or approval from my end.

Any suggestions what could I do in such a scenario?

nowwhat? · 30th July 2015, 14:42

Quote:

Originally Posted by pahwa

Just got another shock from LIC HFL. For my HL in 2009, the interest rate was increased to 11.75% in 2012, thus increasing EMI from 17k to 20k. This week when I went to branch to re-write my loan, I got to know that my loan tenure was increased to 25 years (no intimation, or approval from my end.

Any suggestions what could I do in such a scenario?

The bank does not require your approval. The HFC or bank can increase tenure or EMI at their discretion. Usually tenure is modified, however you do have the option to change EMI instead by visiting the branch.

Most banks do intimate via regular post of any change in tenure/EMI. I don't recall receiving any registered post or courier for this.

But isn't your interest rate way too high? I took a car loan from SBI end of last year and the interest rate on that is lower than your home loan when it should have been the other way around. If I were you, I would shop around for competitive rates and move my home loan elsewhere. For this, you also need to get in touch with LIC and fully understand if they have any loan prepayment penalty.

reverse_gear · 30th July 2015, 17:04

Quote:

Originally Posted by pahwa

This week when I went to branch to re-write my loan, I got to know that my loan tenure was increased to 25 years (no intimation, or approval from my end.

Can you please clarify what you have done when "re-writing" the loan? Is it an interest rate reset, an EMI reduction, etc? Do you have an idea if other lenders will be willing to foreclose your loan and take it over?

pahwa · 30th July 2015, 18:31

Quote:

Originally Posted by reverse_gear

Can you please clarify what you have done when "re-writing" the loan? Is it an interest rate reset, an EMI reduction, etc? Do you have an idea if other lenders will be willing to foreclose your loan and take it over?

Re-write means, you may 0.5 of outstanding loan and reset the interest rate to current ones. It brought my interest rate down from 11.65% to 10.5%. Effectively reducing tenure by 22 months.

reverse_gear · 30th July 2015, 18:47

Quote:

Originally Posted by pahwa

Re-write means, you may 0.5 of outstanding loan and reset the interest rate to current ones. It brought my interest rate down from 11.65% to 10.5%. Effectively reducing tenure by 22 months.

Why did you go in for a re-write? You should have just gone to some other cheaper lender and foreclosed the existing loan with LIC. I do not understand why you have to pay 0.5% for the privilege of getting rates that are probably higher than average market rates in any case.

Loan tenor can increase only when either the interest rate is increased or the loan amount increases (i.e. you draw an additional loan on the same property, which some lenders allow). It must have been either of the two.

ILTDrive · 30th July 2015, 18:51

Quote:

Originally Posted by reverse_gear

Why did you go in for a re-write? You should have just gone to some other cheaper lender and foreclosed the existing loan with LIC. I do not understand why you have to pay 0.5% for the privilege of getting rates that are probably higher than average market rates in any case.

Loan tenor can increase only when either the interest rate is increased or the loan amount increases (i.e. you draw an additional loan on the same property, which some lenders allow). It must have been either of the two.

+1, at the same cost (o.5%) he could have shifted to a different bank, which are offering around 9.90% for new customers. Not a very prudent move.

rajeev k · 30th July 2015, 18:59

Quote:

Originally Posted by pahwa

Any suggestions what could I do in such a scenario?

This is because the HFC considers continuance of the same EMI even with increase in interest rate. Thus to compensate for the increased interest part, the tenure of the loan is extended and vice versa.

pahwa · 30th July 2015, 19:56

Quote:

Originally Posted by rajeev k

This is because the HFC considers continuance of the same EMI even with increase in interest rate. Thus to compensate for the increased interest part, the tenure of the loan is extended and vice versa.

Yes, I agree. However, my friends/neighbors who took same amount of loan, at the same time have the same tenure. It seems some error in my case since EMI and tenure both have been increased.

Quote:

Originally Posted by ILTDrive

+1, at the same cost (o.5%) he could have shifted to a different bank, which are offering around 9.90% for new customers. Not a very prudent move.

Quote:

Originally Posted by reverse_gear

Why did you go in for a re-write? You should have just gone to some other cheaper lender and foreclosed the existing loan with LIC. I do not understand why you have to pay 0.5% for the privilege of getting rates that are probably higher than average market rates in any case.

I agree. I tried with HDFC, ICICI, PNB, SBI and Axis. None of takes over loan for a B-Khatha property if it is not pre-aproved by them.

ILTDrive · 30th July 2015, 22:47

Quote:

Originally Posted by pahwa

I agree. I tried with HDFC, ICICI, PNB, SBI and Axis. None of takes over loan for a B-Khatha property if it is not pre-aproved by them.

This is surprising, mine is also a B khata property and I moved from LIC to Axis couple of years back. You can check at the white field loan service center. However, it does not make sense to shift now, because you are at 10.50% and the benefit is only for 0.5%.

benbsb29 · 31st July 2015, 04:44

Quote:

Originally Posted by pahwa

Re-write means, you may 0.5 of outstanding loan and reset the interest rate to current ones. It brought my interest rate down from 11.65% to 10.5%. Effectively reducing tenure by 22 months.

HDFC also has a similar option, which i have done twice in the past to bring down my astronomical interest rates. I had 2 years at 8.5% fixed when i took the loan, and then once it went to floating rates, it jumped to 11.75%!

I then used the reset option to lower the interest rate, which brought down the tenure, keeping the EMI constant throughout. I had done this twice.

JD1 · 9th August 2015, 11:22

Any August month offers from banks offering processing fee waiver for home loan transfer? Mine is with IDBI and they are still charging astronomical rates. I have 9L outstanding but can't bear to see a difference of 2% between prevailing market rate and what IDBI is charging me.
Considering that interest rates may further go down, which are good banks currently to bring down rates religiously? (So even if I switch now, I don't have to worry that my rates would freeze).

27th July 2015, 10:36	#421
diyguy BHPian Join Date: Jun 2009 Location: Chennai Posts: 518 Thanked: 581 Times View My Garage	I have kicked off my home loan transfer from LIC to HDFC and for this month there is a refund of the processing fee for the loan. In case anyone is considering it, now is the time.
	() Thanks

30th July 2015, 11:50	#424
Oxy BHPian Join Date: Sep 2011 Location: Bangalore Posts: 245 Thanked: 541 Times	Re: Help with a home loan! I booked a 2 BHK in a project called Sumadhura Shikharam last week. http://www.sumadhurashikharamppc.com/ I approached Citibank for the loan. They refused me the loan saying that the builder is not listed with them. I hold a Citibank salary account since more than 8 years and also have a Citibank credit card. SBI though has no issues in giving me the loan. Citibank's loss then I guess!
	() Thanks

30th July 2015, 13:38	#425
pahwa BHPian Join Date: Aug 2013 Location: Bangalore Posts: 272 Thanked: 157 Times	Re: Help with a home loan! Just got another shock from LIC HFL. For my HL in 2009, the interest rate was increased to 11.75% in 2012, thus increasing EMI from 17k to 20k. This week when I went to branch to re-write my loan, I got to know that my loan tenure was increased to 25 years (no intimation, or approval from my end. Any suggestions what could I do in such a scenario?
	() Thanks

9th August 2015, 11:22	#435
JD1 BHPian Join Date: Aug 2011 Location: Bangalore Posts: 256 Thanked: 163 Times	Re: Help with a home loan! Any August month offers from banks offering processing fee waiver for home loan transfer? Mine is with IDBI and they are still charging astronomical rates. I have 9L outstanding but can't bear to see a difference of 2% between prevailing market rate and what IDBI is charging me. Considering that interest rates may further go down, which are good banks currently to bring down rates religiously? (So even if I switch now, I don't have to worry that my rates would freeze).
	() Thanks