IS it better for one getting loan for home construction on floating interest basis or fixed interest basis ?
From Conservative Investment point of view FIXED RATE is better.
However, if the interest rates are slashed ( like in the current sitution)
the borrower of fixed rate loses on the benefit factor.
Fixed interest rates are a good option in volatile condtions, as they maintain the same level of charge in principal.
Floating rates fluctuate with volatality of markets, change in Bank Rates, Repo Rates and CRR-SLR Fluctuations.
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if reasonably good fixed is my selection.
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fixed that way you loan stays at the interest rate for the length of the loan floating your rates can go up or down and could cause some people problems with very high payments
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there is option of 50-50 also.
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When applying for a home loan your credit report will be reviewed and you may be required to provide a number of other details, including: Employment and income records, Tax Returns for the last few years List of assets, List of liabilities and what you owe, Your budget showing monthly living expenses so that you can demonstrate an ability to pay.
http://www.worldbestloans.com/homeloans.htm
With this information you and your lender will be able to determine the kind of home loan and size of the right mortgage for you. In some cases, you can obtain a pre-approval or pre-qualified certificate, which shows how much you can borrow so that you can then shop for homes in an appropriate price range.
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Go for fixed. if you will choose floating interest , in future you will pay more EMI, I have seen people choose floating rate are paying interest 13% when the same bank is offering loan on 8.5%.
wait for few months, when the interest rate will cut down… then go for fixed rate.
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I worked for home loan department in private bank.
If you MUST get a loan…it is always better to get a fixed loan…you dont know with the economy…your interest rate could sky rocket to 10% if you have a variable…
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http://www.daveramsey.com
fixed
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From Conservative Investment point of view FIXED RATE is better.
However, if the interest rates are slashed ( like in the current sitution)
the borrower of fixed rate loses on the benefit factor.
Fixed interest rates are a good option in volatile condtions, as they maintain the same level of charge in principal.
Floating rates fluctuate with volatality of markets, change in Bank Rates, Repo Rates and CRR-SLR Fluctuations.
References :