Home Loan Refinancing in Delhi

Home loans are typically taken for a long duration, approximately 20-25 years. During this tenure market circumstances tend to fluctuate which may alter interest rates and other factors. Due to these fluctuations, borrowers may want to reshuffle their accessible loan in line with the financial system. This is anywhere the idea of home loan refinancing steps in.rnIn simple terms, home loan refinancing is altering the terms and conditions of your existing loan. You can fundamentally get new loan tenure, revised rate of interest or shift from a fixed interest rate to a floating rate and vice-versa. You can either visit your existing bank to change the terms and conditions or approach a dissimilar bank for home loan refinancing.rnSometimes you may have surplus funds and may wish to clear the home loan faster, thus reducing the tenure. Simultaneously, you may want to boost the tenure of the loan if you desire to pay lower EMI’s every month. This requires the loan to be revised and updated and involves certain expenses by the banks for the same.rnLet’s have a look at a two costs that a borrower should be conscious of during home loan refinancing:rn1). Exit Fee: Banks in India charge a pre-payment penalty of around 2%-5% of the outstanding principle amount if the borrower decides to refinance the home loan from a diverse bank. The banks levy this fee on the borrower for the loss of interest it had earlier accounted for.rn2). Processing Fee: Once you have decided to refinance your home loan with a new bank and pay the existing bank off, the new bank will charge you a processing fee which is roughly 0.5%-1% of the principal amount.rnRefinancing with the same bankrnWhen you have decided to get your home loan refinanced, you have to decide between the existing bank and a new bank. The existing bank will have to forgo some of its earnings and may try to give out as little as possible thus existing banks may be unwilling to alter the terms and conditions, which will appeal to you to shift to a new bank to refinance your loan.rnRefinancing with a new bankrnIf you decide to refinance your loan with a new bank, you will have to take the approval of the existing bank and present a No Objection Certificate (NOC) to the new bank.rnWhen you move to another bank you will have to go through all the procedures again like the way you did while applying for the original loan.rnYou must factor in all the expenses before applying for a refinance of your existing loan. Consider the options and see if you save more in the long run and then take the final call.