Why Home Insurance is important….

Owning a home in India was a dream before because of the lower living standards but as the living standards increased additionally, the real estate rates increased exponentially. So it still remains a dream. But if you own one you would certainly do anything to protect it. The home owner certainly counts his home as his biggest asset.

So protecting the dream home has become a mandatory practice for all homeowners. The home insurance companies provide aplenty options and schemes to ensure the safety of your prime possession. Areas Covered Under Home Insurance The homeinsurance policies protect against various natural and man made disasters including: Thefts and Burglaries Fire Earthquake Floods Explosions etc.

Calculation of the Home Insurance Premium or Amount The factors to be kept in mind while calculating the insurance premium and accepting the home insurance quote being offered by the home insurance company are: Area of the House (calculated in sq.ft.) Location and neighborhood Approximate rate of construction (calculated in Rs. Per sq.ft.) Permanent construction on the land The time period offered for the insurance premium (monthly, quarterly or six monthly depending upon the insurance amount) Property more than 50 years old is not covered in home insurance.

The insurance policy offered is standard or flexi covering Home Insurance Claim In case of the above-mentioned disasters, the home insurance companies settle as quickly as possible. For customer care 24 hr helplines are also being set up to fasten the claim procedure and provide better customer service. The claim settlement procedure home insurance includes: Personal information like the contact details Details of the policy undertaken Inspection of the site by the company appointed surveyor Claim is processed within two weeks of the complete documentation Approval of the claim letter is sent to the claimant with the settlement amount approved Payment of the home insurance claim cheque. Documentation The home insurance companies follow a fixed procedure to settle the insurance claim. You are required to submit completed documents in order to fasten the claim procedure.

These include: Duly completed and signed claim form Copy of the FIR A Final Police Report Copies of all invoices, price lists Letter of indemnity Below mentioned is a comprehensive list of the top home insurance companies in India.

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Home Loan – Be Careful While Balance Transfer

Home loan industry in India has come of ages. Consumer is King. And definitely, if you are the one with sound financial background and impeccable credit history you can strike a better deal with the banks in terms of interest rates and other payment conditions.

Interestingly, the same is applicable on those, as well, who have already availed a loan from a bank. Near about all the major public and private sector banks are now offering the option of ‘Balance Transfer’ on housing loans

What is Balance Transfer all about?

There are times you find that the interest rate on your home purchase loan that you were paying at the rate of 10.5 per cent per annum was quite high in comparison of 9 per cent offered by some other bank.

In this case you can trigger off the balance transfer option with your existing bank, under which the unpaid portion of your home loan would get transferred to your desired bank, thereby taking benefit of the difference in the interest rates.

Things to take care of:

Tenure of loan: Ideally, you should consider taking the balance transfer option when the remaining part of your payment period is more than 5-years.

There is no point in transferring the home loan from one bank to another if you end up paying pre-payment and other processing charges even more than the difference of amount you had to pay towards interest in the normal course.
Pre Payment Charges: Banks like SBI, IDBI and ICICI offer benefits like payment of the pre-payment charges to your existing bank. So you must confirm the same with the new bank that are they ready to deal with this matter or not.

Additions in the loan amount: You must confirm that the amount of your home purchase loan is perfectly in line with the balance you had in your previous bank. It may happen that your new bank pays all pre-payment and processing charges on your behalf and add the amount later to the principal amount of your housing loan.
In such case, you have to suffer the impact of compounding, which does not favor you in the long run.

Final Word:

Seeking balance transfer option needs the similar degree of caution and study that you undertake while taking home loan. And of course, you can save a considerable amount of interest charges under this option once you strike the right chord!

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Home Loan Terminology

Here are some terms that you will come across time and again when it comes to home loans or any other type of housing finance. Herein, we try to give you a fair idea of the kind of terms and their meaning:

EMI: These are the Equated Monthly Installments that one must pay till the whole loan amount inclusive of the interest is not paid back. The EMI amount includes a portion of both the principal amount and the capital amount.

Fixed Rate of Interest: Herein, the rate of interest will remain fixed for the duration of the loan.

Floating Rate of Interest: The market lending rate will determine the interest rate. Lending rates might go up or down, and the borrower can be at an advantage or a disadvantage at different periods of time.

Monthly Reducing Balance: The interest rate will reduce on a monthly basis when the repayment amount is repaid.

Annual Reducing Balance: The principal is reduced on a yearly basis and in such an option, a borrower will end up paying an interest on even that portion of the principal loan amount that has been paid back.

Processing Fees: A loan application has a processing fee attached to it

Prepayment Penalty: If a borrower repays the whole loan amount before it is actually due and before the loan tenure ends, most banks and institutions charge a penalty for the same.

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What is home insurance policy

Are you looking for a home insurance company in India? Do you want to get the best home insurance rate? If yes, then you must first understand what exactly is an insurance policy and how it works.

The insurance policy is a contract and like any contract contains clauses and conditions. Claims are settled in accordance with the conditions detailed in the policy. Insurance works on the principle that everyone is exposed to risks but they only affect a certain number of people at any one time. However, some risks occur with great frequency than others, and if they materialise they can have varying levels of impact. When you report a claim, the Insurance Company needs to check that the policy covers the loss. Once the appropriate documents are produced to verify a claim called the process of settlement is quite fast.

These days there are many housing finance companies in India that offer home insurance. The home insurance rates differ from company to company based on the policies. The NRI insurance services are also quite different from what is available to Indian residents. The disasters that can be insured against are fire, earthquakes, storms, cyclones, tempests, tornadoes, hurricanes, floods or inundation, lightning strike, explosion, landslides, impact by vehicles or aircraft, and bursting or overflowing of water tanks and pipes. Home insurance covers almost all kinds of risks, from damages arising from terrorist attacks to breakdowns of water tanks.
The choice is yours – if you think your home is not going to be damaged by a terrorist attack, you don’t need to cover it. In case you are living in a rented house, you can choose to insure only the contents. For most people, their home is their single most valuable possession and their biggest investment. Homeowners insurance protects your investment as well as your family and your household possessions. If you suddenly lose your home due to fire or natural disaster, or the contents are damaged or stolen, you will run into thousands to rebuild the house. Think about this. Remember bBuying home insurance is simple. So go ahead and decide the best option for you.

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Value of your property

Applying for a home loan before deciding on the property may bring nasty surprises later. Also, the banks incline more to the consumers who has finalize the property as it gives them a scope to start their evaluation and technical process. The amount of home loan looses its significance if valuation of the property is different from the bank’s valuation. However, a number of property developers have tie-ups with banks today. So, one can get the fast home loan as the projects are already pre-approved by HFCs.

Your checklist differs in case of the loan for second hand homes. The pointers for the concerned will include:

Will the property be acceptable to the lender?

Can you show all the documents and No Objection Certificates required by the bank in the same format?

Will you bank agree on to evaluate before you pay the processing fee?

Do you accept the valuation done by the bank?

Will an amenities agreement (if any) affect your loan eligibility?

If the property is under construction, check if the property developer and the stage of construction are acceptable to your bank?

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