Importance of a home loan agreement

All the terms and conditions related to a home loan are listed in a home loan agreement and that has to be signed by the borrower, which means that the borrower has agreed to mentioned conditions. Despite being of such immense importance, it is taken just as a formality by most of the borrowers.

The main reason behind this neglect is the bulky size and the language that is used is the document, it prompts the borrower to sign it quickly and conclude the loan formalities as soon as possible but this can not be an excuse because doing so can cause a harm to the borrower in many ways.

As there are a lot of lenders available in the market, it has fueled the competition among them to lure customer. For the reason they come up with new schemes and only the highlights are made available to the customers, however there are a lot of terms and conditions applicable with it about which the customer is oblivion.

A lot of people approach the lender and intoxicated by the advertisements they want to borrow the scheme as soon as possible without making any further enquiry and in the mean time they also sign the loan agreement as well which makes the lender the ultimate authority; by the time the borrower gets to know what blunder he has made it is already too late.

Nothing like this would have happened if the borrower would have read the document carefully. For instance, if a person has borrowed a loan under fixed rate scheme which promises him loan at minimum possible rates. Most of the lenders now mention a clause in the agreement which allows them to revise the rates after a certain period of time, about which the lender obviously will be unaware about if he has not read the document carefully.

Not only these but there are a lot of other details about the defaults and various clauses related to the home loan which makes it really important to read the loan agreement carefully.