5 tips for buying property that’s a 'solid investment'

October, 2018

When buying a property, you may only be concerned about your immediate property needs, but experts say you should also "buy with the future in mind".

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1. Consider the neighbourhood

While you may enjoy a neighbourhood with a great nightlife at the moment, your priorities can change quickly. If you are planning to start a family, for instance, the neighbourhood you invest in should be a practical choice with regard to good schools, medical facilities, etc.

Factors like security and resale value of property are also very important considerations when deciding where to invest.

2. Size of the home

Once again, if you are planning a family, or on extending your family, consider the size of the home, the amount of bedrooms and bathrooms and also a garden where children can play.

3. Consider the level of renovation needed

If you are buying a ‘fixer-upper’ you need to carefully determine how much it will cost you - will you be able to afford all the renovations? And the time factor - do you have a very demanding job that won’t allow you to do DIY over weekends?

Sometimes it’s better to invest in a turnkey development, even if it’s more expensive initially, depending on your circumstances.

4. Consider the price of the home

While you may be in a good financial position at the moment, will you still be able to service the bond if there is an interest rate hike or if something unforeseen happens, like retrenchment? Sometimes it’s better to be realistic than optimistic.

5. Good rental demand in the area

If you had to relocate for any reason in the future it may not necessarily be a favourable time to sell your home (depending on the market), and then you may need to rent your property out.

Is there a good rental demand in the area, or can tenants pick and choose? This could result in a vacant property and loss of income. Also determine the rental rates in the area, will you still be able to service the bond with the rental income you receive?

Also read: Benefits of buying a home in the wife’s name 

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Source: housing.com

Benefits of buying a home in the wife’s name

October, 2018

With several states in India offering benefits for women property buyers to boost their empowerment, we examine why it makes financial sense to register a property in a woman’s name

There are several benefits to buying a property in a woman’s name, either as the sole owner or as a joint owner, with governments and banks offering several sops.

“Aspiring home buyers can seek certain benefits including tax exemptions if a home is bought in a woman’s name. Such offers can also attract more women buyers to the realty sector,” points out Ashok Mohanani, CMD, Ekta World. Encouraging women to register assets in their name, also boosts women’s empowerment, he adds.

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Tax benefits

Experts explain that some of the obvious tax benefits of buying a home in the wife’s name, include an extra deduction of interest up to Rs 1.5 lakh every financial year, if the house is self-occupied. If a husband and wife are the joint owners of a property and if the wife has a separate source of income, then they can both claim tax deductions individually. The tax benefit will depend on the ownership share of each co-owner.

Discount on stamp duty charges

Several state governments in north India are now offering a partial waiver on stamp duty, for buyers registering properties in a woman’s name – either as a sole owner or as a joint owner.

“You can save 1%-2% on stamp duty, if the property is in a lady’s name. In Delhi, the stamp duty rate is 4% for women, compared to 6% for men. Moreover, if you are undergoing some financial setback and have some debts to repay, the property held in your wife’s name, does not come under the cover for your loss,” points out Sushil Raheja, CEO of Raheja Homes Builders & Developers..

Stamp duty charges for Women Vs Men

State/UT	For Women	For Men
Delhi	4%	6%
Haryanat	4% in rural areas and 6% in urban areas	6% in rural areas and 8% in urban areas
Rajasthan	4%*	5%

* As 1% rebate over normal rate

Discount on home loan interest rates

Many banks like SBI, ICICI and HDFC Bank, offer discounted rates on home loans for women borrowers. The prevailing interest rates for women borrowers are as mentioned below:

Interest rate for woman borrower Vs others

Bank	Interest for Women borrower	Interest Rate for others
SBI	8.35 – 8.85%	8.4 – 8.95%
ICICI	8.35 – 8.7%	8.4 – 8.85%
HDFC Ltd	8.35 – 9.05%	8.4 – 9.05%

Note: Rate as on June 20, 2018 (For loan amount < Rs one crore)

Things to keep in mind when buying a home in the wife’s name

Experts maintain that it is a good idea to buy a home in the name of one’s wife or in co-ownership. However, the wife can enjoy the tax benefit, only if she has a separate and genuine source of income. Moreover, if there is any legal dispute on the property, then both, the husband and wife, will be involved in the case. Therefore, home buyers should evaluate all possibilities, before making a final decision.

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Source: housing.com

Why is it advisable to take a legal opinion while buying a property...

We look at the importance of legal assistance during a property purchase and how it can help home buyers, not only to guard against defects but also save money in the transaction

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Buying a property is not just about paying the money and taking possession of the unit. The process and the documentation involved in the transaction, is complicated and is often beyond the comprehension of a layman. Moreover, not everyone will be conversant with the various laws, relating to acquisition of property. As you are putting your life savings in buying the property, you should take legal opinion for the process, to safeguard your interest.

Importance of title and marketability of the property

It is very important for the buyer to verify that the seller has a good title in the property. The matter of title is so complicated that the real estate regulations require a developer to buy a title insurance, with respect to the property that he is developing, in order to secure the buyers against any claim or defect in the title of the property. Defects in the title may be in the form of the legal status/nature of the land on which the property has been constructed or existing easement rights on the property which one would not know, unless a detailed investigation is carried out. In case the property has been mortgaged by depositing the original documents, a buyer may not know if the original documents have been handed over to him, as it is not difficult for people to get copies of documents made in such a way that they look like the original.

To avoid any litigation with respect to the property which you are buying, it is important to ascertain whether the developer has duly complied with all the laws and procedures, related to the construction of the property. There are many properties that have not received occupancy certificates, due to non-compliance of some condition imposed at the time of obtaining approvals for the plan from the local authorities.

Real estate purchase agreement and other documents

Buying a property involves studying various documents, as well as preparing many documents. Only a person who is trained to interpret legal documents, can help the buyer to identify any restrictive clause in the agreements of earlier purchasers. This may be in relation to the land, as the property may have been constructed on a freehold land, where the absolute title is transferred to the buyer. The land may have also been acquired under a lease, where the ownership of the land eventually passes on to the original owner, at the end of the tenure of the lease.

A majority of property buyers do not take the help of lawyers for drafting of the purchase agreement and instead, ask the broker to help them get the agreement done. The brokers, in most of the cases, have a standard agreement, in which they merely replace the details of the property and the buyer and seller. They seldom realise that there may be special circumstances, which warrant that the agreement should be drafted on some specific lines – for example, when the property is sold by a legal heir or an executor of a will.

In case you are taking a home loan, a legal scrutiny of the agreement may help you understand the conditions, under which you are taking the home loan. These may include clauses pertaining to charges for prepayment or transfer of the home loan, charges for shifting of the home loan from floating to fixed rate and vice-versa, or the circumstances under which the lender can take possession of the property.

Stamp duty and income tax implications of property purchase

For all transactions of immovable property, the purchaser has to pay stamp duty on the market value of the property. Every state has its own stamp duty ready reckoner rate, popularly known as circle rate. The rates specified in the stamp duty reckoner, are the base rate at which stamp duty for a property has to be paid. Nevertheless, certain deductions are allowed from the market value, based on the age of the property, whether it is on leasehold land or freehold land, etc. Likewise, deductions are also allowed, in case the building does not have a lift. A lawyer is in a better position to guide you on such matters, to ensure that you do not land up paying higher stamp duty, than what is legitimately due for such transactions.

As per Section 50C of the Income Tax Act, where the stamp duty ready reckoner valuation is higher than the agreement value, the seller is presumed to have received the consideration as stated in the stamp duty ready reckoner and is required to pay capital gains tax accordingly, unless the difference is not more than five per cent over the agreement value. Likewise, the buyer is also required to pay tax under Section 56 (2) (x) on the difference, which is higher of Rs 50,000 or 105 per cent of the agreement value and stamp duty valuation.

Only a person, who knows all the laws pertaining to purchase of property, can help you save money, as well as safeguard your interest in the property. Ideally, property seekers should appoint a firm of solicitors, rather than just a lawyer. The one or two per cent of the cost of the property that you spend towards this, will help you take the right decisions while purchasing a property.

Also read: Things To Know Before Buying New Property 

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Source: housing.com

Reasons to buy property during Navratri

Navratri is an auspicious occasion worshiping nine incarnations of goddess Durga for nine days. So, for these nine days we give you nine-bangon-reasons to invest in real estate!

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Shubh mahurat

Festivals are always a shubh mahurat for major decision making, especially financial ones. People find it sacred and auspicious to make an expensive purchase during Navratri with the belief that it would appreciate in value.

Big discounts

Many builders offer big discounts during this time. Given the high levels of inventory in the market right now, builders are looking for such festive seasons by giving attractive offers.

Building relations

Investing in real estate is a onetime wise call and a lifetime of good returns. It is an active future planning for yourself and your family. On the other hand, it is important for the developers to build a relation which would last long rather than project based communication.

Safe investment

Real estate is a safe field to invest in and secure your money. Thanks to RERA as it protects homebuyers and investors rights, it proves to be your guardian for real estate investment.

Loan rate advantage

Banks and financial institutions offer reduction in home loan rates during Navratri. Some of them waive of processing and administrative charges as well. The loan schemes are convenient, the ticket size is higher with low EMIs and the tenure is also longer.

Tax saving

Deduction under Section 80C of the Income tax Act is available for investment in house property. There is a dual benefit in case of investment in house property by availing a loan.

Better options

Due to the multiple options and offers provided by the developers, which in turn increases the demand during festivals, buyers have the upper hand. They get the platform to compare not just the projects, but also schemes and prices and negotiate according to their budget.

Faster closings

Developers would want to close deals and record their sales before the end of quarter. Hence, the chances of bargaining and getting a better deal is high.

Future happiness

With all the benefits, either buying a new home and gift a new space to your family or investing for a passive income and future planning, this will add happiness in your life and give you another reason to celebrate it with your loved ones!

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Source: magicbricks.com

7 mistakes that can ruin your home loan prospects

September, 2018

We look at seven crucial aspects that home seekers should guard against, while availing home loans, to ensure that their borrowing does not turn into a burden in due course

Home loans have become an invaluable tool, for most people looking to buy a home. However, the process can turn into a nightmare, if the borrower commits certain mistakes while applying for the loan. In comparison to other loan products, a home loan usually has a very long tenure and the amount involved is enormous. Therefore, there is no room for mistakes. Given below are seven crucial mistakes that home seekers should be aware of, to ensure that one can avail of and service a home loan smoothly.

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Mistake 1: Not having sufficient funds to make the down payment

Usually, banks provide home loans of up to 80 per cent of the value of the property, depending on the CIBIL score and repayment capacity of the borrower. This means that the borrower should contribute the remaining 20 per cent of the cost, as a down payment. For example, if the value of the property is Rs one crore, then, the bank will provide a maximum loan of Rs 80 lakhs and the remaining Rs 20 lakhs should be contributed by the borrower, as a down payment. The borrower first needs to provide the down payment, after which, the bank starts disbursing the loan. So, it is essential that the borrower is ready with this margin money, before applying for the loan.

Mistake 2: Applying for a bigger loan amount than you can repay

“When financing your home, or any other purchase, consider your current financial situation. Ideally, your EMI outflow should not be more than 30-40 per cent of your income. Do not try for a bigger loan with a higher EMI, on the premise that you are due for an increment in six months. You will be in a fix, if the increment is lower than expected, or if there are additional expenses. Savings are also an area, where you should not cut corners. So, consider your overall current financial health when you borrow,” suggests Adhil Shetty, CEO, BankBazaar.com.

Mistake 3: Selecting the wrong loan product

There are several types of home loan products in the market and the borrower must choose the most appropriate loan product, to get the maximum benefit in the long term. For example, banks offer floating rate home loans, fixed rate loans, semi-fixed rate loans, home loan with overdraft benefits, incremental EMI home loans and so on. The home buyer needs to figure out his/her own requirements and accordingly, select the appropriate loan product, as otherwise, one may land up paying unnecessary charges or find it difficult to repay the loan.

Mistake 4: Taking a loan for a short tenure

Banks generally provide home loans for tenure of up to 30 years, depending on the eligibility of the borrower. There is no prepayment penalty on the home loan. So, if you take a home loan for 30 years and repay it in 10 years, then, you do not need to pay any penalty.

However, if you have taken a home loan with a tenure of 10 years and failed to repay an EMI, then, you may be liable to pay certain penalties and it will also negatively impact your CIBIL score. Hence, it is better to opt for a longer duration home loan.

Mistake 5: Not comparing various banks’ offers

Nowadays, there are many websites, which allow you to compare the home loan products offered by different banks, on the basis of interest rate, charges, penalties, etc. Home loan seekers should avail of this facility, to avoid selecting the wrong loan product, which may put you in financial distress.

Mistake 6: Ignoring one’s credit score, before applying for a home loan

Some people commit the mistake of spoiling their credit score, by not repaying the EMIs for small debts like credit card bill or a personal loan. Once the credit score is spoiled, then, it weakens the chances of getting a home loan. So, it is essential to keep the credit score healthy, if you are planning to take a home loan.

Mistake 7: Not taking insurance to cover risks associated with a home loan

Home loan borrowers should take appropriate insurance cover, to protect their families from financial distress. “In case the borrower faces an unforeseen contingency, illness, death, accident or any kind of tragedy that leads to permanent disability and affects his ability to service the outstanding dues/EMIs, the home loan insurance can help his family to clear off the dues.

“Home loan insurance is important for the borrower, as it ensures that the dependents of the borrowers do not become homeless, in his/her absence or crisis,” cautions Anirudh Jain, business head – insurance, Centrum Insurance Brokers Ltd.

Importance of the loan agreement

Experts point out that the essential clauses of a home loan, are usually in the fine print of the loan agreement but very few borrowers bother to read it and this oversight my come at a hefty price, later. One must read the loan agreement and sign it only if you find it appropriate. Otherwise, ask the lender to make the essential changes, or avoid taking the loan from that institution.

Also read: HOW TO BUY A HOME IN YOUR 20S...

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Source: housing.com

These are the factors that impact how much home loan you will get

September, 2018

While an applicant’s income is the main factor for determining the amount of home loan that he can get, here are some other factors that one can leverage to increase this amount Besides checking an applicant’s eligibility for a home loan, lenders also have certain criteria to ascertain the quantum of home loan that they can grant to the person.

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Income of the applicant

While computing your home loan eligibility, the lender will subtract the EMI on your existing loan, from the amount available for servicing the home loan. Consequently, your home loan eligibility will be based on this reduced amount. Therefore, if you have an existing loan, where the outstanding amount is small, it makes sense for you to prepay the outstanding loan, as this could enhance your home loan eligibility substantially. The incremental home loan eligibility, will be much higher than the outstanding amount on the existing loan.

Age and remaining years of service of applicant

Home loans are generally available for tenures of up to 20 years. However, your age and remaining years of service, could restrict your loan amount. For example, if your age is more than 40 years and your remaining years of service is less than 20 years, your loan eligibility shall accordingly get reduced. For a salaried person, a retirement age of 60 years is taken into account, while for self-employed borrowers, the lenders consider a retirement age of 65 years, for determining the home loan’s tenure.

Availability of co-borrowers

The amount of home loan that you are eligible for will increase, if you are able to add someone, who is acceptable to the lender, as a co-borrower to the home loan application. The lender will pool the income of all the co-borrowers, to determine the amount available for paying the EMIs. Please note that all the joint owners of the property, have to be included as co-borrowers, irrespective of whether they have any separate income. However, a person can also become a co-borrower, even if he is not a co-owner of the property.

Tenure of the home loan

Your home loan eligibility is directly linked to the tenure that you opt for. With the same surplus income, a longer home loan tenure will give you a higher home loan eligibility. As there is no prepayment penalty on home loans and with lenders mostly offering loans under the floating rate of interest, it makes sense for you to choose a longer home loan tenure, so as to have higher eligibility and better flexibility. You can always prepay your home loan partly or fully at any time, in case you have surplus funds.

Also read: HOW TO BUY A HOME IN YOUR 20S...

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Source: housing.com

Bullet train work to start near Thane in January 2019

September 16, 2018

Around 26 villages in Thane district will also have to be displaced for the project.

More than a year after laying the foundation stone of the bullet train project, on-ground work near Thane is expected to begin in January 2019. The National High Speed Rail Corridor Limited (NHSRCL), the executing agency of the 508-km bullet train corridor project, will be procuring boring machines for construction of the underground tunnel. The boring machines will be placed for the sea-bed work in Vikhroli, in Mumbai. Further, the station design of major stations has been prepared by the high speed corridor.

“The undersea tunnel will be major and critical work, which we aim to begin first. The tenders will be floated in November and boring work will begin by January 2019,” said Dhananjay Kumar, spokesperson of NHSRCL.

Of the 508-km alignment connecting Mumbai and Ahmedabad, 155.76-km will be in Maharashtra, 348.04-km in Gujarat and 4.3-km in Dadra and Nagar Haveli.

Around 26 villages in Thane district will also have to be displaced for the project.

The Joint Measurement Survey (JMS) of the land in Thane has been completed and process of land acquisition is likely to start soon. However, the implementing agency continues to face strong opposition in Palghar over land acquisition, as 109.06-km of the corridor will pass through the district.

Prime Minister Narendra Modi and Japanese Prime Minister Shinzō Abe had laid the foundation stone of the PM’s pet project on September 14, 2017.

The work on the underground sea tunnel is critical and had already begun in December 2017, wherein a team of engineers from NHSRCL, Rail India Technical and Economic Service (RTIES) Ltd, and Japan’s Kawasaki Geological Engineering studied the data on the seabed, based on geo-technical surveys. The survey was conducted to understand the structure and depth of the seabed of the Thane Creek in December 2017 and based on the report, the alignment of the tunnel was fixed.

Further, the NHSRCL is also in process of completion of the station designs of the 12 stations between BKC in Maharashtra and Sabarmati in Gujarat.

Station designs for BKC, Sabarmati, Baroda, Surat, Vapi and Billimora are completed; station designs for Maharashtra are going on. According to the proposed exterior, Surat railway station will have a diamond-shaped entrance, whereas the exterior of the Sabarmati station will be based on the Dandi March.

The bullet train stations will have two floors. The first floor will have concourse and the second floor will have two platforms. Meanwhile, BKC and Sabarmati railway stations will be called as the hub and will have four platforms each.

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Source : hindustantimes.com