Home Loan Foreclosure

Home Loan Foreclosure: Overview

Home Loans empower aspiring home buyers to buy their homes without breaking the bank to arrange for the required funds. While Home Loans prevent immediate liquidity, they come at the cost that needs to be paid back to the lending institution, above the principal amount borrowed as Home Loan interest.

Home Loan foreclosure refers to the full prepayment of the Home Loan balance in one go, thereby closing your loan before the end of the repayment tenor.

Many Home Loan borrowers consider foreclosing their loans if they have an amount available to save on their interest outgo. It allows them to take on new investments or even a second Home Loan.

Here are certain aspects to bear in mind before you initiate your Home Loan foreclosure:

• Take stock of your current financial status to see if it can sustain the loss of such significant funds that will go into paying your Home Loan balance
• Consider what stage of your repayment tenor you are foreclosing your loan at because if you are already at the tail-end of the tenor, it makes little sense to prepay at one go
• Account for the Home Loan tax benefits you will miss out on

Home Loan Foreclosure: Charges and Fees

Not only does Home Loan foreclosure save you a substantial portion of your home loan interest, but individual borrowers with floating rate Home Loans can also do so at zero additional costs.

However, entities or individuals with a fixed interest Home Loan must pay an additional fee upon foreclosing their Home Loans, which can range up to 4%*.

Features of Home Loan Foreclosure Calculator

The Home Loan Foreclosure Calculator allows borrowers to assess the savings they stand to make, with the current repayment conditions on their ongoing Home Loans in mind.

Borrowers must fill in the following details:

• The total Home Loan principal amount
• The current Home Loan interest rate
• Their repayment tenor
• The number of EMI payments made to date

The calculator then provides you with the total foreclosure amount and the amount you can possibly save as Home Loan interest.

The Home Loan Foreclosure Calculator prevents you from taking hasty prepayment decisions, allowing you an insight into the repercussions of foreclosing your Home Loan. What’s more, you no longer have to rely on guesswork or manual calculations, as the calculator provides you with instant results based on the information submitted.