Home Loan Terminologiesresource-Banner_WC

Banner-Dynamic-Scroll-CockpitMenu_HomeLoan

Home Loan Terminology You Must be Aware Of _WC

3 min 01 Jun 2024
home loan terminologies
Highlights
  • Home Loan Terminologies
  • Final Word

A List of Home Loan Terminologies

Down Payment

Lenders are usually permitted to disburse up to 90% of the property’s value as a Home Loan, leaving the remaining amount to be funded by the home buyer themselves. The money you put down by yourself is called the down payment amount. 

Floating Interest Rate

A floating interest rate is sensitive to market conditions. If you choose a floating interest rate for your Home Loan, then your interest rate can both increase and decrease through your repayment tenor, in accordance with the market conditions. 

Fixed Interest Rate

Fixed interest rates are unaffected by market conditions. As the name suggests, it is fixed for the tenor until reset by the lender.

Tenor

Tenor is the repayment timeline of a Home Loan specified by the lender. You must pay off your loan amount, both the interest and the principal amount, within the allocated period. Lenders commonly offer a tenor of up to  32 years.

Resale

Resale is a term that indicates that you are not buying a home directly from the builder but from a prior owner who is willing to sell it.

Joint Ownership

Joint ownership indicates that the property is jointly owned by two or more individuals. In the case of joint ownership, the financial responsibility of loan repayment can befall on all homeowners.

Sanction Letter

The Home Loan sanction letter is a formal letter that confirms the loan approval, details and sanction by the lender. The sanction letter is the legal proof of your Home Loan eligibility and approval.

Additional Read: Top Five Ways to Manage Your Home Loan 

Collateral 

Home Loans are big-ticket loans for which lenders request security, against which they can sanction the loan. Your collateral is an asset you need to provide the lender against the loan, and in the case of a Home Loan, it is the property you want to buy through the loan sanction.

Disbursement 

The processing of disbursing the loan amount is called disbursal. Lenders can initiate the disbursement process once your profile and documents have been verified to their satisfaction. Home Loans, upon prior agreement, can be disbursed in one go or can be released to you in partial disbursements.

LTV or Loan-to-Value Ratio

The loan-to-value ratio tells you what percentage of the property’s value can an applicant get as a loan amount – in the case of a Home Loan.  Lenders can sanction an amount starting from 70% of the property’s value, going up to 90%, of the Home Loan amount.

Equated Monthly Instalments or EMIs

EMI or an Equated Monthly Instalment is the monthly payment that you make to your lender as a part of your repayment schedule. The EMIs account for both the Home Loan principal amount and the interest accumulated, which the borrower is liable to pay back in full.

Foreclosure

When you pay off your loan amount in full before the end of your tenor, then it is called a foreclosure. To foreclose your Home Loan, you have to repay the entire outstanding amount in full – in one go. There is no additional fee for individuals with floating interest rate Home Loans, should they choose to foreclose their Home Loan accounts.

Also Read: Consider These Factors Before Foreclosing Your Home Loan 

Final Word 

If you are planning to avail of a Home Loan, we hope this glossary of terms will help you research and negotiate a satisfying deal with your lender. 

Blog-Intro-Disclaimer

DISCLAIMER:

While care is taken to update the information, products, and services included in or available on our website and related platforms/websites, there may be inadvertent errors or delays in updating the information. The material contained in this website and on associated web pages, is for reference and general information purposes, and the details mentioned in the respective product/service document shall prevail in case of any inconsistency. Users should seek professional advice before acting on the basis of the information contained herein. Please take an informed decision with respect to any product or service after going through the relevant product/service document and applicable terms and conditions. Neither Bajaj Housing Finance Limited nor any of its agents/associates/affiliates shall be liable for any act or omission of the Users relying on the information contained on this website and on associated web pages. In case any inconsistencies are observed, please click on contact information.

Asset Publisher

Trending Articles
alt
loan+against+property Loan Against Property

[N][T][T][N][T]

Things You Need to Know Before Applying for a Loan Against Property
2024-12-02 | 3 min
alt
loan+against+property Loan Against Property

[N][T][T][N][T]

How Can a Loan Against Property Help You Expand Your Business?
2024-12-02 | 5 min
alt
loan+against+property Loan Against Property

[N][T][T][N][T]

Benefits of Loan Against Property EMI Calculator
2024-12-03 | 3 min
alt
loan+against+property Loan Against Property

[N][T][T][N][T]

Top Benefits of a Loan Against Property Over Collateral-Free Loans
2024-01-09 | 4 min
alt
home+loan Home Loan

[N][T][T][N][T]

A Complete Guide for Home Loan Insurance
2023-04-03 | 4 min
alt
loan+against+property Loan Against Property

[N][T][T][N][T]

What Are the Eligibility Criteria for Obtaining a Loan Against Property?
2023-03-28 | 4 min
alt
home+loan Home Loan

[N][T][T][N][T]

Advantages for First-Time Home Buyers
2023-07-14 | 4 min
alt
home+loan Home Loan

[N][T][T][N][T]

All About Home Loan Balance Transfers
2024-06-04 | 4 mins
alt
home+loan Home Loan

[N][T][T][N][T]

All You Need to Know About Home Loans
2023-01-19 | 5 min
alt
loan+against+property Loan Against Property

[N][T][T][N][T]

Understanding the Fees and Charges on Your Loan Against Property
2024-02-16 | 8 min
alt
loan+against+property Loan Against Property

[N][T][T][N][T]

3 Different Loan Against Property Types You Should Know About
2024-02-13 | 5 Min
alt
home+loan Home Loan

[N][T][T][N][T]

6 Ways to Reduce Your Home Loan Interest
2024-03-20 | 4 min
alt
home+loan Home Loan

[N][T][T][N][T]

Benefits of a Home Loan
2023-02-20 | 4 min
alt
home+loan Home Loan

[N][T][T][N][T]

Home Loan Burden Management: Five Tips
2022-06-27 | 3 min
alt
home+loan Home Loan

[N][T][T][N][T]

How to Pay Off Your Home Loan Quicker
2024-03-11 | 4 Min
alt
loan+against+property Loan Against Property

[N][T][T][N][T]

Things to Do If Your Loan Against Property Application Gets Rejected
2023-02-14 | 5 min
alt
loan+against+property Loan Against Property

[N][T][T][N][T]

Pay-off Your Debt with Bajaj Housing Finance Loan Against Property
2024-02-14 | 5 min
alt
home+loan Home Loan

[N][T][T][N][T]

Types of Home Loan Charges
2024-01-22 | 3 Min

PAM-ETB Web Content

Pre-Qualified Offer

Full Name*

Phone Number*

OTP*

Generate
Check Now

Call_And_Missed_Call

RHS-insurance-ad-card