You probably have opted for a floating charge in your house mortgage/top-up mortgage, then there is no such thing as a penalty for pre-payment.
By Chaitali Dutta
I plan to take a Rs 40 lakh dwelling mortgage. Ought to I go for a floating rate of interest mortgage? How ought to I pre-pay the mortgage to cut back excessive curiosity payout? —Avuraj Modiyar
Trying on the inflation charge state of affairs, globally in addition to India, it’s possible that there will likely be an upward strain on the rate of interest, sooner or later. In case you plan to pre-pay the mortgage and never run the total course of the unique tenure of the mortgage, go for a floating charge. Nevertheless, if you’re younger and that is your dream home which you propose to maintain until retirement, then go for a hard and fast charge of curiosity. Right here, you will be unable to do half pre-payments with out penalty and the efficient rate of interest for this will likely be about 150 to 200 bps greater than a floating charge.
I’ve an current mortgage for a flat. Now I need to promote that and buy a much bigger flat. Do I’ve to repay the mortgage quantity to promote the flat? —Gautam Singh
In instances the place a mortgage is operating and the proprietor wish to liquidate the asset, then the purchaser pays into the mortgage account first to extinguish the operating mortgage. The mortgage of the operating lender is launched in favour of the lender to the purchaser (in case the purchaser is taking the mortgage) or on to the client as soon as the purchaser settles all dues to the lender in addition to the vendor.
I had taken a top-up mortgage final 12 months on my current dwelling mortgage. My current mortgage will finish after two months. Can I pre-pay some quantity of the top-up mortgage and what would be the penalty? —Pradip Kumar Doshi
You probably have opted for a floating charge in your house mortgage/top-up mortgage, then there is no such thing as a penalty for pre-payment. You may go forward and make some pre-payments.
What’s the procession price for a private mortgage and can the rate of interest be decrease in public sector banks? —Vimal Sarkar
The processing price differs extensively from financial institution to financial institution. It could generally be negotiable as properly. So far as the rate of interest is worried, the general public sector banks might provide a less expensive charge, however the eligibility standards are stringent, and you might get a decrease quantum of mortgage. Often, when the financial institution is providing a liberal quantity of mortgage, it could include a 25-50 bps increased charge.
The author is founder, AZUKE Private Finance Advisory (www.azukefinance.com). Ship your queries to fepersonalfinance@expressindia.com