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Top Myths about Home Loans Busted

We love to read and gather as much as we humanly can before investing in anything. It is not surprising that this becomes ten times more intense when we are planning to buy a house. After all, have we not been thinking of our dream home since a really long time? But you must be sure of one thing. Not all that you read is true. Every material you read will have some points that they will try to sell as facts but in reality, they might not be applicable or possible at all. Same goes for home loans and some of its features.

Let us bust some myths on home loans and home loan features to help you in making an informed choice.

  1. Shorter the tenure, better the loan: People might get you to think that a shorter tenure choice will prevent impacts of revised rates. However, you must remember that the longer the home loan tenure, the more interest you end up paying. Sometimes, you might end up paying more interest than the original loan amount. Do analyze your resources and choose a tenure that is short and feasible.
  2. Fixed rate loan rates are fixed by all means: A lot of people opt for fixed rate loans feeling secure about the fact that they will not be affected by changes in banking policy. For all those who are remotely thinking of opting for it must go through the policy documents very carefully. Many banks include a reset clause that allows them to revise rates.
  3. Higher rates mean higher EMI: You might realize that the interest rate on the home loan has been revised. And to your dismay, it has been increased. It is human psychology to think that the increased rate will increase the EMI you pay. Do note that most banks do not change the EMI amount; instead what they do is that they make minute changes in the tenure specified, so as to prevent any defaults. However, this is determined by the individual’s life cycle position, income and credibility.
  4. Shifting loan bank means repetition and repayment: This is not true at all. Once you have paid a specific amount, shifting banks will not require you to pay the already paid amount again. You might have to pay a nominal charge but there will be no overlapping of principal or interest amount payments.
  5. Property features have no role to play in a home loan: This is not true. The bank is definitely interested in knowing the authenticity of the property before they grant you a home loan. It is the buyer’s responsibility to do their homework before they zero down on any property. In case the loan has been granted and you witness some issues with the property, it does not mean that your agreement with the bank has been nullified. You will be required to repay the loan amount.


These are some important facts that you must be aware of before you apply for a home loan, or even choose a property! A secure home is a happy home after all!


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