take five

Chang­ing your home loan lender

HT Estates - - Front Page -

Why should you change: In the wake of ris­ing in­ter­est rates, it may be worth the while to shift your ex­ist­ing loan from one lender to one of­fer­ing a bet­ter rate

How to zero in on the lender: Iden­tify a lender who is of­fer­ing a sig­nif­i­cantly lower rate of in­ter­est than what is be­ing charged by your ex­ist­ing loan provider

The process: Ap­ply for a loan with all the doc­u­ments. On re­ceiv­ing the sanc­tion let­ter from the prospec­tive lender, ask the ex­ist­ing one to state the to­tal out­stand­ing amount (prin­ci­pal + in­ter­est)

The pa­per­work: Re­quest your lender to give you a let­ter ad­dressed to the new lender, stat­ing the amount out­stand­ing on pay­ment of which it will hand the doc­u­ments over to the new lender

The costs: The ex­ist­ing lender charges 0.55% to 3.31% if you pre­pay the loan be­fore com­ple­tion of its ten­ure. The new lender will charge a loan ap­pli­ca­tion fee — 0.55% to 1.1%, nor­mally lim­ited up to R11,000

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