Those who are already paying hurdles on their Housing understand the problem of losing a significant chunk of their monthly income. Although we know this will happen even before we apply for a Home, building a house through savings is a pipe dream for most salaried individuals and is usually impossible.
However, Balance Transfer Home comes to your rescue and reduces your financial burden to a large extent. If you’re struggling with the Home using the balance transfer option, transfer your existing Home from your current banking institution to another. The borrower uses this facility if better service and lower interest are available at a different banking institution.
Though there are lots of perks to the balance transfer, there are certain hurdles to qualifying for it and formalities that must be completed in order to get approval. Here are the top 5 hurdles in Home L Balance Transfer that you must cross to enjoy lower EMI payments and better services.
Top 5 hurdles in Balance Transfer Home
– Tedious process
A Balance Transfer Home is a process that can vary based on your new lender. Most borrowers refrain from choosing this road since the effort required is the same as when you apply for a new Home loan. You might question whether this transfer will be beneficial in the long run or will create more complications.
Firstly, the applicant must check the Balance Transfer Home conditions with the new lender. Next, consult your existing bank for alternatives, their transfer procedure, fees or fines involved, etc. All these permutations and combinations make Balance Transfer Home a tedious process and a difficult choice for borrowers.
– More risks for the lender
There is more than a good chance of application rejection. This happens because when you go for Balance Transfer Home, the new lender doesn’t get an advantageous deal from you. The main reason for your switch is to lower the interest rate, thereby reducing your EMI burden. On the other hand, your new lender will carry more risks.
– Issues created by the previous Home an Lender
Sometimes, when your current Home provider feels that they are losing one of their valued customers due to the Balance Transfer Home Loan, they might cause issues or delays in the transfer. Getting a ‘No Objection Certificate’ (NOC) from your existing Home provider is compulsory before you apply for a Balance Transfer Home with a new lender. Without this certificate, your new lender can’t go ahead with the transfer creating a big hurdle in your endeavour. Hence, getting approval from your previous lender is challenging and may require frequent visits to convince them of the same.
– Repayment of Fees:
The new lender will treat this transfer request as a new application, similar to when you apply for a new Home to build a house. Therefore, along with application processing, it is also making the necessary fee payments that are based on the outstanding amount. This aspect is crucial and should be considered as a part of the expenses when you go forward with the Home balance transfer option. This charge can be around 0.5% -1% of the outstanding amount.
Only go for this option if you are able to make savings out of it. Otherwise, there is no merit in making all the efforts to make very little gains. If your current Home tenure is significantly less, the Balance Transfer Home facility is not much lucrative and hence should not be considered in the first place.
– Co-borrower consent might be necessary.
Make sure to confirm with your new lender whether approval of the co-borrower is necessary to get the Balance Transfer of the existing Home. In some cases, co-borrowers presence might be needed during the formalities. Your new lender will consider your credit score, credit history, previous repayment records, etc., before approving the Balance Transfer Home. Therefore, proceed with caution and make sure all the conditions are met and the outcome is profitable to you.