Negotiate the right home loan
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(094) 77 2 467 272 - For professional buying and Selling of Real Estate in Sri Lanka

Negotiate the right home loan
Get approval before house hunting
Getting pre-approval on a mortgage will save you the hassle of looking at properties you can't afford. You'll also be in a better position to make a serious offer when you do find the right house.

This should not be confused with pre-qualification, which is based on a quick review of your finances. Pre-approval from a lender on the other hand is based on your actual income, debt and credit history.

Loan tenure
Loan tenures usually range from 5-20 years and you need to choose yours depending on factors like number of working years left, repayment ability and cash flow needs. The longer your tenure, the greater your total interest costs. Of course, a longer tenure does help in reducing the equated monthly installments (EMIs). Experts advice borrowers to aim at fully repaying the loan before they stop working so that the retirement income is not dented by repayment obligations. Therefore, the lesser number of years you have to retire, the shorter should be your loan tenure.

Interest rate calculations
A very important factor that differentiates one home loan from the next is the different ways in which interest rates are calculated and charged, for example the distinction between variable (floating) and fixed interest rates. You have to be mindful of these subtleties.

Choose carefully between a fixed or variable rate mortgage
Fixed rate loans, as the name indicates, are those whose rates are fixed for the entire tenure of the loan. In the case of floating rate loans, the rate is benchmarked to a retail lending rate of the lending institution and moves in tandem with it. Thus the total interest you pay out during the tenure is dependent on the way interest rates move during the term. The rate is reviewed periodically (usually every six months) and re-set in relation to prevailing market conditions.

You should opt for a fixed rate loan only if interest rates in the economy are either rising or have stabilized. They are also useful if the tenure is small, such as 5 years. Conversely, if interest rates are falling either because of economic downturn or governmental intervention, and are likely to stabilise at a lower level by the end of your tenure, then opt for a variable (floating) rate.

Given the huge interest rate differential in Sri Lanka and the developed world, one can expect that with reforms in the interest rate regime (making it more market-determined) and with freer inflows of international capital, in the long term, interest rates in Sri Lanka would be lower than what they are today. If you subscribe to this view, you should opt for a floating rate loan for longer tenures.

All home loan providers claim that their home loans are the best for you. But how do you find out what is best for you? Get the answers to the following question from the lending institutions during shopping around.

1. Will your entire gross income be considered? Will the income of the spouse, parents and other family members be considered?
2. What is the rate of interest of the loan?
3. What is the nature of interest rate (floating or fixed rate) and how is it computed?
4. Will the interest be charged in advance or after the end of the month?
5. What is the loan tenure?
6. Will the lender levy commitment charges?
7. What security or collateral will be sought?
8. What is the percentage of the property price that you will have to pay as down payment?
9. What are the processing charges and what is included in them?
10. Would there be separate charges for legal and technical examination of the property?
11. Would there be a penalty for partial or full pre-settlement of loan?
12. Will the loan amount include costs like stamp duties and legal fees?

Our promise to both buyers and sellers is that we hold and command the most comprehensive data base of both buyers and sellers in our geographical area of operation. This enables us to offer our buyers the best matching properties for your specifications. Buyer satisfaction is the key for the seller to get the best possible price.
To truly deliver this promise our valuable clients, we employ various ethical techniques unique to our own. Right at the moment we are active only in the following towns and suburbs.

We hold and command the most comprehensive data base of both buyers and sellers in our geographical areas of operation. This enables us to offer our buyers the best matching properties as per their specifications.

Presently we are active only in the following towns and suburbs.

Nawala Nugegoda
Embuldeniya Colombo 3
Mirihana Madiwela Colombo 4
Ethulkotte Thalawathugoda Colombo 5
Pelawatta Pitakotte
Kohuwala Colombo 7
Beddagana Pepiliyana Colombo 8

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