Today almost no loan or credit card application gets approved without checking the applicant’s CIBIL report and CIBIL TransUnion Score. Ever wondered how a person’s credit score is calculated?
Here’s a quick glimpse into what goes into the making of a person’s CIBIL TransUnion Score:
What is a CIBIL TransUnion score?
CIBIL calculates an individual’s credit score through advanced analytics and assigns a number between 300 and 900 to a borrower, based on his/her credit history. The closer your score to 900, the more confidence the credit institution will have in your ability to repay the loan and hence, the better the chances of your application getting approved. While each bank will have its own credit scoring cut-off based on the credit sanctioning policies, it has been observed that most banks are lending to consumers with a CIBIL TransUnion Score of 750 and above.
How is the score calculated?
While each credit information company has its own proprietary algorithm to calculate an individual’s credit score, the most important elements of the score composition are centric around the loan payment behavior of the individual. Your CIBIL TransUnion Score is calculated based on the information in the “Accounts” and “Enquiry” section of your CIBIL Report. The score is calculated based on the following factors:
Credit Utilization: How much credit is the consumer using?
Defaulting/Delinquency: How many accounts are past due and by how many days?
Trade Attributes: How old are this consumer’s lines of credit? What type of credit does he have? Does the consumer have a good mix or balance of credit or is it all credit cards?
Here is a breakup of the various factors that impact the CIBIL Transunion Score:
1. Past Performance: Individuals past performance on their debt obligations is the most important criterion and contributes approximately 30 per cent weightage to the score.
2. Credit Type & Duration: Type of loan availed whether secured or unsecured loan, and the duration of credit history established contributes an additional 25 per cent to the score.
3. Credit Exposure: The total amount of credit exposure contributes another 25 per cent
4. Other factors: Other factors such as credit utilization, recent credit behavior contribute the remaining 20 per cent to the score.
Your CIBIL Report and CIBIL TransUnion Score not only determine whether or not you qualify for a loan, but it may also have an impact on the terms and conditions on which you can avail the loan. The higher the credit score, the better your chances of availing the loan faster and on favorable terms. It is advisable to check your CIBIL Report and CIBIL TransUnion Score before applying for a loan. Timely payments of loan EMIs is most important for maintaining a good credit history and a healthy credit score.
It is common that you hand over your original property documents to the lender either a bank or NBFC, when you take a loan. The lenders are usually careful in handling the customers’ documents but, there are cases where the banks can misplace the documents due to some unconscious situations. You or the lender knows it only when you go to collect the original documents during a loan closure.
What are the documents the lenders have with them.
The most important original documents about the property are with the lender.
Katha (Extract and Certificate)
E C till date
Approved building plan/Layout approved plan
Why do the lenders need to put the original property documents with them?
Trusting the home the bank lends in order to fulfill your dream. To avoid the chances of unavoidable situations like customer not repaying the loan under any situation, the bank keeps the originals with them. So, literally, your home becomes yours, only after you repay the total loan amount.
How can the loss of original documents happen?
After the documents are received by the customer, the bank files it and stores it in a locker making it utmost confidential. But at times the loss of original property documents can happen due to different reasons.
When you avail a home loan, all the original documents of the property pass through multiple hands before being dispatched to the central repository. For most of the banks central repository is in Mumbai. If you request for xerox of the documents during the tenure of the loan, then the documents will be pulled out from the repository and after taking a xerox, these are again kept in the locker of central repository. These central repositories are normally maintained by a third party. After the loan is closed, the original documents go through the same cycle before being handed over to the owner. There is always a possibility that the loss of original property documents can happen during this process.
Also if the premises is shifted to a new building, then the original property documents can be misplaced while transferring.
What you should do when there is loss of original property documents by the lender?
If there is a loss of original property documents by the lender, it is their sole liability to obtain authentic duplicates or a certified copy of the same. An FIR needs to be filed by the lender, and the entire process and all costs are to be borne by the lender.
To understand clearly, let’s go through a case study on loss of original property documents.
Case Name : Secretary/Manager, Mayyanad Regional Co-Operative Bank V/S Ebrahimkutty
Appeal Number : First Appeal No. 288 of 2014.
Date of Judgement/Order : 20/02/2017
Courts : National Consumer Disputes Redressal Commission (NCDRC)
Facts of the Case:
Ebrahimkutty had taken a loan from Regional Co-operative Bank against mortgage of his property in a village of Kerala by depositing the original title deed. On repayment of the loan in 1999, the bank failed to return the deed.
The bank later verbally informed him that the original deed could not be found and attempts were being made to trace it. The bank advanced further loans to him against the same title deed. These loans too were repaid in due course.
The last loan was finally closed on September 8, 2012, but the bank still could not find the title deed.
The bank then informed him that the original deed was misplaced while shifted its building premises.
Aggrieved, he filed a complaint before the Kerala State Commission. He claimed that his property was worth Rs 75 lakhs, but he could not sell it as the bank had lost the original document. He sought a compensation of Rs 25 lakhs.
The state commission directed the bank to return the original deed and also pay compensation of Rs 10 lakhs within one month, or along with 12% interest, if delayed. In case of failure, to return the title deed the bank was ordered to issue a written certificate about the loss.
The bank appealed against this order. It contended that the loss of the deed was communicated way back in 1999, but the complaint was filed 12 years later, so it ought to have been dismissed.
It also argued that complainant had not been able to show that he had suffered any damage due to the loss of the title deed. Complainant argued that the bank had merely admitted that the deed had been misplaced, but had never admitted that it had been lost.
Issue: Whether Bank would be liable to pay for loss of documents taken against loan?
Document lost cannot be recovered: The National Commission observed that if a document is misplaced, there is a possibility that it could be recovered at a later stage. If it is lost, the question of recovery does not arise.
False assurance wont effect Period of Limitation :The Commission noted that even in the affidavit filed by the bank, it had denied that the original title deed was lost, and had asserted that an assurance had been given that it would be returned as soon as it was traced. So the Commission held the complaint to be within limitation.
Loss of Deed would effect value of property:The Commission also observed that the loss of the title deed would affect the value of the property, so complainant would be entitled to be compensated.
Deficiency of Service:The National Commission held the bank guilty of deficiency in service and ordered the payment of compensation amounting to Rs.5 lakhs along with 12% interest for the period of delay
Never neglect the loss as it might decrease the value of the property. It is always better to have a written note by the lender about the loss. Once you get the note, preserve it as that is the only document you have for your property.
1. 30 % of your income must be used for monthly living expenses.
2. 30% of your income must be used for liabilities repayments, if any..
3. 30% of your income must be SAVED and INVESTED for your future LIVING.
4. 10% of your income must be spared for entertainments, vacations
5. 6 months expenses must be available for emergency fund (should be invested in LIQUID FUND, FD Etc)
6. Home loan must be registered and applied on both husband and wife name. (Both can get benefits on Home loan Tax benefits)
7. Buying second house for investment is not advisable ( Survey reports – it will fetch you only around 3% return)
8. After 45 years of age, not supposed to enter into any BIG LIABILITIES (Higher education of children and wedding of children will happen around 45 to 50 only, so plan now for the same.)
9. Have joint account @ Bank savings account.
10. Property must be registered on both Husband and wife name. (As per legal act – after husband first legal heir is wife, after wife it goes to children).
11. Regular check on Nominations at all financial instruments. if not nominated, do it now..
12. Only in insurance policy, claims payable to Nominee. In other financial instruments legal heirs certificate is must to get back the settlement
13. Must have Term Insurance to financially secure future of your dependants..
14. Don’t take any financial investment decisions EMOTIONALLY, and also Avoid last minute tax saving investment decisions, plan well in advance.
15. MEDICLAIM is must (in spite of Group mediclaim coverage given at office) (After retirement there is no mediclaim coverage, after 50-55 years of age, it’s very tough and costly to enter into mediclaim)
16. For your jewelry LOCKER, Only one lakh is payable by bank, if theft or fire happen at bank. Provided insurance done.
17. Like same way Government guaranteed only one lakh for your FD also. (Fixed deposits with Banks upto Rs. 1 lakh only are backed by deposit insurance)
18. Know all Tax implications. You cannot avoid paying tax. But you can minimize by way of tax planning and investments..
19. All financial documents must be kept safely and keep family members informed of the same.
20. Financial investments must be followed through personal financial planning adviser.
21. Review your portfolio for every six months.
These are general suggestions, but personal financial planning and investment decisions depend upon case to case.
Have a Healthy and Wealthy Financial Year 2017-2018…..
Goods and Service Tax (GST) is the tax which amalgamates various central and state taxes into one which aims to build a common market in India, and also avoids paying tax in multiple stages.
In-detail, GST, under one roof, includes many taxes, viz., excise duty, additional excise duty, service tax, additional customs duty, surcharges and cess, value added tax, sales tax, entertainment tax, central sales tax (levied by center and collected by state), octroi, entry tax, purchase tax, luxury tax and tax on lottery, betting and gambling.
Though the expected GST was in between 20% and 23%. The final rate is decided by the finance council and its members and is fixed to 18%.
GST on Real Estate Sector.
At present the consumers in the real estate sector who opt to take an under construction property pay sales tax, value-added tax, stamp duty and registration charges to the builders. With the introduction of the GST, it is made clear that the indirect taxes, viz., sales tax and value-added tax will be replaced by GST. Whereas the developer or builder pays various elements of non-creditable tax costs like excise duty, customs duty, CST, entry tax, etc which are inbuilt in the pricing of the units. All these tax costs add upto anywhere between 22%-25% of the price of the units. Also, for the builder while procurement of goods and services, GST would be applicable. This GST would not be creditable and the developers would have to load this in the price of the property. Hence, there are chances for the increase in the pricing of the under-construction properties.
But post demonitisation, the things turned out different with respect to real estate prices. The unorganized sector now offers at 30% lower prices whereas the organized sector remained neutral.
Also, for the projects which are under construction in different stages, the builder might have already purchased the raw material needed for the whole project. Which means the builder might have paid all the taxes which were supposed to be during the purchase. If the GST is implemented and if the builder is to claim the input credits, the cost of the unit might reduce to 20% of the value of the property. But, under GST, he can not get the credit of what he paid as consumer pays tax on taxes paid by the builder. Hence, the builder surely fits the price in the units. For example, if a builder wants to sell an under-construction property of Rs. 1000, the price of it is Rs. 1000 + service tax + VAT + stamp duty. With the implementation of GST, the price of it will be Rs. 1000 + GST + stamp duty. GST is beneficial in real estate sector, if the builder is benefited and if he passes on the same benefit to the customer.
If the consumer is looking out for a ready to move in apartment, the consumer need not pay the service tax or VAT, but has to pay the stamp duty which varies from state to state. So not much of price change is expected even with the implementation of GST.
So, what needs to be analysed and understood is, with the 18% replaced GST rate, how will the impact of the pricing of the under construction property will be? And how will the builder charge you at the end of the day.
The budget session clearly mentioned that the goal is affordable housing. So, even with the implementation of GST, the under construction projects’, the unorganized and organized sector real estate prices remain neutral. This gives another hope for the investors, and a big move for the real estate market after demonetisation.
Buying a home is one of the major decisions a person has to take during his life. It is rare to find someone who pays the entire cost of home at one go. A home loan is an essential part of any home buying endeavor. Taking a home loan is a long journey, which involves many stages. The key to getting your home loan in a smooth way is being familiar with the entire home loan process.
Beginning the home loan process in India
The process of getting a home loan starts with a formal application for the loan. The application form requires certain basic information about you. This will include your personal, residential, income, employment, educational details and details about the property, estimated costs and current means of financing the property. Though the requirements may vary from bank to bank but there are certain things which every bank will ask.
The application form must be supported with valid documents to substantiate the facts. Generally the banks will ask you to submit following documents.
Proof of educational qualifications
Details about the property if finalized
Proof of income : This will need to be backed up by proof such as copies of last three years’ Income Tax returns (along with copies of Computation of Income/Annual accounts, if any), Form 16/Form 16A, last three months’ salary slips, copies of the last 6 months’ statements of all your active bank accounts in which your salary/business income details are reflected, etc. Other documents that you need to provide with your application form include age proof, address proof and identification proof. You may also be asked to give your employment details.
Age proof : Copy of your school leaving certificate/Driving license/Passport/ration card/PAN card/Election Commission’s card/etc.
Identification proof : Same as above, but with photograph. Sometimes, the same document if it contains a photograph, the current residential address and the correct age can be the proof for all 3 things.
Address proof : Similar documents need to be provided to prove that you are actually staying at your current address.
Your employment details: If your company is not well‐known, then a short summary about the nature of the company, its business lines, its main customers, its competitors, number of offices, number of employees, turnover, profit, etc may be needed. Usually, the company profile that is available on the standard website of the company is enough.
Educational qualification : The copy of certificates of your higher educational qualification needs to be submitted.
The purpose of the entire exercise is to ascertain the suitability of an applicant for a home loan. The income documents and bank statements provide vital clues to the bank regarding your financial health.
Processing fees for home loans in India. : An important thing to note about home loans is the processing fee. Banks charge a processing fee for every home loan application. This fees is non refundable. This fees is used by the bank to start and maintain the home loan process including completing the various formalities during the entire period.
Evaluation and verification of home loan applicant: After applying successfully for the home loan and submitting the processing fees, the bank evaluates your application, decides in principal about your home loan and requires a personal meeting with the bank officials. This decision for personal interaction can be taken within 2-3 days of submitting a complete application. The purpose of this personal interaction is to know more about the borrower and his repayment capacity. Being satisfied by your application and personal interaction, the bank proceeds to verify all the facts that you mentioned in your application for home loan. A field investigation process is initiated – to confirm and validate everything stated in the application form. Qualified representatives are sent by the bank to your office and place of residence to ascertain the facts. The references provided in the application are cross checked and verified.
Verification of repayment capacity: Once the field investigations over, the bank now goes ahead to verify your repayment capacity. This is the most vital part of any home loan process. If the bank finds that you’ll not be able to repay the money back with interest on time, it will simply deny you any home loan offer. On the other hand if the bank finds that all’s well and is convinced by your repayment capacity, it sanctions your home loan. Based on how well the bank is satisfied by your financial conditions and repayment capacity the bank can issue a conditional sanction or unconditional sanction. If the sanction is conditional, you’ll have to fulfill the conditions imposed before the loan is disbursed.
Sanction letter for home loan: The bank then prepares a sanction letter which contains the following detail:
The amount of home loan sanctioned
The interest rate applicable on your home loan
Whether the interest rate is fixed or floating
Your home loan tenure
The mode of repayment of the home loan
If any special scheme applies to the home loan, its details
The terms and conditions associated with the home loan
If you find the offer attractive and agree with all the facts mentioned in the sanction letter, you will have to provide an acceptance copy to the bank. This is generally a duplicate of the sanction letter signed by you, provided to the bank for its records. If the bank charges any administrative fee, it will have to be submitted at this stage.
Verification of the property : Now the bank will verify the property in question. The home loan is a secured loan with the property being used as the security or collateral. So, to get the home loan you must submit the original documents of the property to the bank. The title deeds, no-objection certificates and other documents required by the bank are to be submitted in original and the bank keeps them safely until you repay the entire loan amount. After taking the papers, bank conducts a legal check so as to verify that the property has a clear title and the home loan is being disbursed to the right person and for the right reasons. Banks don’t lend for disputed properties and for titles where ownership cannot be easily enforced.
Along with the legal check, banks also send experts to the location of your property to conduct a technical valuation. If the property is under construction, the banks verify the stage of construction, quality of construction, progress of construction, locality etc. and evaluate the property on established parameters. In case where the property is ready or is being resold the bank verifies the ownership, maintenance, age of property, quality of construction, locality and required legal clearances. The banks have qualified valuators, which assess the value of property on various parameters and decide on the amount of loan
The sole purpose of all this exercise is to ensure that the property has a clear title, is technically sound and meets the valuation standards of the bank.
Note: Verification is not necessary if loan is being sanctioned by a tie-up Bank.
The disbursal of home loan : Once the formalities are completed and the bank is satisfied with the legal, technical and financial valuation of the property, the registration process for the home loan begins. The legal documents are to be prepared on stamp papers of required denominations in a format approved by the bank’s lawyer. The home loan agreement is then signed and you need to submit the post dated cheques for the agreed term. After the home loan agreement the loan disbursal process begins. Depending on the home loan purpose, and the agreed type of disbursal (lump sum or in stages), banks disburse the home loan amount.
Income Tax certificate
Every bank issues an income tax certificate that serves as requisite proof to let you avail of tax benefits that accrue on repayment of a home loan. This will typically contain the total amount of interest and capital repaid during the year. This is mandatory to claim the tax benefit in respect of self-occupied property. You will have to file this with your tax returns and submit this to your employer or chartered accountant to calculate your tax liability.
How Loanyantra Works During the Home Loan Process :
It is our work to make you feel at ease during the process. We are here to make you select the best and your favourite bank. We ensure that your process is smooth as we send you alerts and remainders about each step before even the agent comes to you. You can always contact our relationship manager for any queries.
If you have been looking into the market of home loan, you might have come across the term ‘property tax’ more than once. Though property tax varies from state to state and depends on the valuation of your home, you must remember that your home loan depends on the property tax. Each home loan has the provision that in case you fail to pay off the property tax in an “event of default”, the lender could even foreclose on your property even when all your mortgage payments have been done in a punctual manner.
Why should you concern yourself with property tax?
In India, property is a source of income for many and hence, it was only but natural that tax would be levied on any property you purchase, be it a humble shop or godown, flat or a proper residential building, provided you are using it to earn money in any form. The amount of property tax that you need to pay would depend on the value of the property that is being taxed in the first place.
Why is the property tax being charged at all?
The fact that the local municipal authority is the force behind the property tax being levied must tell you a lot about how the money you pay goes to towards the maintenance of the basic civic services in your city. The property tax in India is only charged on the real estate building and not on the plots of land, which don’t have any establishment in its vicinity.
How is the property tax calculated? What is Annual Value?
The property tax you need to pay is decided on the basis of the annual value of the let out or self occupied property. For the self occupied properties, the annual value is taken to be zero. However, if that property is rented, the property tax is calculated accordingly.
What are the tax benefits of your home loan?
Under Section 24, you are empowered to claim up to Rs 200000 or the actual amount of repaid interest. However, you can only make the claim when you are in possession of the house.
Under Section 80C, you can claim the principal up to the maximum limit of Rs 150000 across all the investments made under the section 80C. However, you might be needed to show the lender’s statement showing the not only the interest and principal components but also the repayment for the year.
How can a new homeowner avoid property tax traps?
Every homeowner should go to the pains of confirming the tax rate before signing on the dotted line to save himself from the reassessment and hikes of rate of interest. The estimate of a real estate broker of the approximate tax bill might prove to be helpful but even then you might be required to pay more tax in the subsequent years. You can potentially open up an escrow account in order to set apart the funds that would be drained to provide for the taxes.
For owning a home, how you get along with your home loan is an utmost important factor. With the competition among the lenders, home loan search needs the same effort as the search for your dream home. So, the comfort lies with the customer now how fast he can choose the home loan and get his eligibility check done for no further delays after he selects the dream home. This is Pre-approved home loan.
The bank Pre-approves the loan after thoroughly evaluating the credit history, income and expenses of the potential borrowers. Based on this evaluation, the lender decides whether the borrower qualifies for the home loan or not and the maximum amount, the borrower is entitled to. It is basically a green signal given by the lender that the borrower can opt for a home loan for a particular amount.
How are loans Pre-approved?
The procedure for availing such a loan is shown below: –
1). At the outset the borrower first has to make an application to the bank for a Pre-approved loan
2). Based on the borrowers income capacity, the bank decides the amount of loan the borrower is entitled too. Additionally banks will also check the CIBIL score of the borrower
3). Once the required verifications are checked by the bank, the bank will issue the loan sanction letter to the borrower. The letter will be valid for a certain period of time that will be clearly mentioned in the letter itself, along with the terms and conditions of the loan
4). The bank charges a small processing fee for Pre-approving a loan
5). The borrower should decide a property before the expiry date on the sanction letter to avail the loan
Benefits of a Pre-approved loan
1). Plan your finances: Once you have received a pre-approval from the bank, you can plan your finances better. You know how much the bank is lending you, so you can look for a property within that range.
2). Discounted rates on Pre-approved Loans: Many times the banks offer discounts on the rate of interest of loan that is Pre-approved., just as an incentive to go for a Pre-approved loan.
3). Faster Processing: When your loan is Pre-approved, it means that the banks have done a thorough background check on your income and credit history. Unless there is a change in your income, you are sure to receive the loan quickly, with the bank only verifying your property documents, thus reducing the processing time.
It’s always better to get your loan Pre-approved. Once your loan is Pre-approved you can save time by narrowing your searches to the properties that fit your loan amount. It also adds a credible amount of certainty, that you are sure to receive a loan if you find a property within the stipulated time.
Disadvantages of a Pre-approved home loan
1. Pre-approved home loan is offered at flexible rate of interest but not at the fixed rate of interest. So, prepare your mind as you cannot shift to fixed interest rate once you finalize your property.
2. All the charges applicable to know the eligibility, say processing fees,etc., are not refundable if you don’t go for a loan later.
3. The eligibility and the loan amount is fixed and you cannot change if you wish to. This might make things tough if you want more amount for loan than estimated for or opted for.
4. Don’t apply many a times as it might affect your credit score. Though you haven’t decided on your home, but you had applied for your home loan, this is considered for your credit score.
How Loanyantra can help you with a Pre-approved home loan
Loanyantra, helps you manage your loan from the time you start searching for the best lender. You just have to contact the customer relationship manager, to know your eligibility and to know the best bank for your requirement. And that manager is with you till the end of the loan disbursement. Hence, go stress-free with us on home loans, either Pre-approved Home Loan or Organic home loan.
First thing to do if your home loan application gets rejected is, to relax. Because there are ways to figure out and get it done.
Usually, a home loan gets rejected for the following reasons.
Reasons why a home loan application is rejected.
Credit Score : The foremost reason for your home loan application to be rejected is your low credit score. For availing any loan, you should have a good credit score. Any lender, either a bank or an NBFC go further with the loan process after checking the borrowers credit score. So, if the credit score is low, the home loan application gets rejected in the first step.
Eligibility Criteria : If the loan amount applied is more than the eligibility, the process might terminate stating you don’t meet the eligibility criteria. The loan is usually sanctioned based on your source of income and the amount of income you get. Home loan application gets rejected if the lender feels that you cannot bear the EMI.
Valuation Of the Property : The next step is evaluation of the property. Sometimes, even if you are eligible for the applied loan amount, your property might value less than you had applied for. In such cases again, the home loan application gets rejected.
Processing Fee Cheque Bounce : You have to pay the processing fees in the form of cheque. If you have no enough amount in your bank account, then the cheque gets bounced. So, if the cheque gets bounced, the agent gets back to you with a rejection message.
Other Reasons : If there are any transition changes in your life say you are in between two jobs, or you are turning to be a new entrepreneur from an employee working for a company, or you are working for a small company, or having minimum work experience, all these might lead to a home loan application rejection.
Reasons w.r.t People : Sometimes, your co-owner is not the person mentioned in the lenders’ conditions, or you are a co-owner or guarantor to someone else (not a problem if your credit score is good and you reach your eligibility), or you have too many co-borrowers for your property or you have too many independents on you, or you hold a too old property, any of these reasons can reject your home loan application.
Solutions For Home Loan Application Rejection :
Firstly, relax and go through the reason why your home loan application is rejected. Then act accordingly. In India, it is possible if you apply for a home loan immediately after the rejection, provided you take the required steps and rectify the reason with a proper solution. Hence, let us look into the solutions for the respective problems.
Credit Score : Check your credit score before you apply for your home loan. If you have a low credit score, see to it that you get it right by clearing all your pending credit card bills or by paying old debts or by removing your name as a guarantor or co-borrower if you are for anyone.
Eligibility Criteria : If this is the reason, then you should look at reducing the loan amount. If you require so much amount for loan, try applying after your increment. Or increase the tenure and reduce the EMI of any existing home loan or personal loans if any as this will increase the income in hand which will ultimately increase your eligibility.
Valuation of the Property : Before you buy a house, you should have the valuation details. If the valuation estimate by the lenders is less than what you had estimated, then the loan amount you had asked for will not be sanctioned. This happens only when there is a huge difference between the estimates. But if this is the reason, then you can try with different lenders as each lender’s value has a slight variation. Or if you want the same lender then you apply the loan again by reducing the loan amount.
Processing Fees Cheque Bounced : In this case, usually your agent immediately informs you. So, see to it that you start the home loan process or you give a cheque dated in the beginning of the month as it is sure you have enough amount in the account in the beginning of the month than at the end. But see to it this never happens again.
Other reasons : For all other reasons, the transitional changes, you have to wait till you meet the lenders’ conditions. Any lender asks for three months pay slip if you have a change of job. If you have a start-up or if you are working for a start-up, the start-up should have good investors or it should be running in profits. If yo need the loan immediately, you ca try with the NBFCs which are a little lenient with the rules. But note that the interest rate is a little higher than the banks.
Reasons w.r.t. People : Having more independents is really a serious problem. If you reduce the loan amount, probably there are chances of getting the loan. Firstly, you should figure out if you can really manage your EMIs and run a family with your income. The better option is to wait till your increment and then apply. Though you might go with the NBFCs, you might have a tough time managing. If your home loan application is rejected because of too many co-borrowers, then you can choose two out of all of you who has more eligibility and then apply for the home loan. though legally the home loan is on the two chosen ones, you all of you can share the EMI. Ensure that you are in good terms till the end.
The mantra for your loan to be processed is just follow the minimal conditions by the lender as they are lending really huge. Don’t panic. No pain no gain. So, think and take the next step as any more rejection in the application will affect your credit score.
Loanyantra.com is always there to help you and suggest you for a doable job. You can take our guidance and get the loan as customised also at lower interest rate. All you have to do is just inquire in our website. We will do the rest. Happy Home Loaning.
You’ve finally decided to buy a home but it is plagued with uncertainties, speculation, opinions and uncalled for advice. Relatable, isn’t it? That’s because a home is possibly the biggest purchase in one’s life.
Needless to say, there’s a plethora of doubts and fears in your mind before you finalize on anything. You might take into account about the location, the market reputation of the builder, the size, and the amenities but it all boils down to 1 simple question: is your investment safe? More so in today’s financial scenario where the markets are weighed down by demonetization, slow down and the anticipation for real estate prices to fall further.
The Price Protection Policy comes in as a savior in such times; especially for those who are sitting on the fence still wondering whether to buy or not. Price Protection Policy is a solution to all your worries and has the power to instill confidence in both the buyers’ as well as the builders’ minds.
“You had my curiosity, but now have my attention”.
So what exactly is Price Protection Policy?
From the clothing industry to the automobile industry, brands use ‘cashback’ to retain their customers’ interest.
In the realty market, Price Protection Policy is that ‘cashback’ which helps us retain your confidence. It protects your investment from fluctuating prices such that, if the price of the property you’ve bought falls, the builders, refund you the difference.
For instance, if you buy a home for say, 80 lakhs, and due to market movements it drops to 75 lakhs, the builder will refund you the difference, i.e. 5 lakhs, under the Price Protection Policy, NO QUESTIONS ASKED!
Isn’t that so assuring and relieving?
But it’s important to note that the price protection window might differ from builder-to-builder. That means each builder might offer a different time frame to cover your properties under Price Protection. Usually the builder offers it till the buyer takes the possession.
How does the Price protection policy benefit the home buyer?
Price protection policy is first implemented in 2008 by a renowned builder Rohan Builders for their projects in Pune. This was done in the wake of global economic recession and real-estate crisis that crippled nations and organizations worldwide. As was mentioned in the property agreements, the difference was actually refunded to the customers.
It is a safety net for one’s life savings. In a market so volatile that even vegetable prices keep changing week-on-week, one is wary about parking lakhs or even crores of rupees in an asset like home if it’s their necessity. The Price Protection Policy alleviates that fear and instills confidence.
The realty market is betting big on this new policy. Make sure that you not only have a verbal commitment but also make the builder mention in the document.
Be optimistic to get something tangible and legal to hold on to when you buy your dream home from your builder. There are many known builders who follow this policy. Find out from your builder if he follows the policy. We only hope that every realtor follows for the betterment of the overall realty market.
Price protection policy followers
Pethkar Projects’ Seyona at Punawale is offering Property Rate Protection Policy from the day project was launched in 2014. Some of the followers of the price protection policy are Concord Builders, Tata Homes, Mahaveer Group, Runnal Group, Lodha Group, Oyster Living, Citrus Ventures. These developers had started implementing the policy post demonitization to bring back the boom in the realty market.
The purpose of the policy is in the interest of the home buyers not loosing their hard-earned money during the post demonetization when the realty market was going low. But with the decrease of home loan interest rates, the real estate market had become a hit again.
The taxation system in India is intricate and many a time complex to understand. Capital Gains Tax is an important aspect in Taxation. Here we go through an important part of Indian taxation system on the capital gains. Let us first understand what capital gains is and what the different implications of a tax on it are.
Firstly, Capital Gains is the profit which one earns during the sale of the capital asset. So, Capital gains tax is the tax levied on the profit after the sale of the asset. Capital gains tax is levied in the same year in which the transfer of capital assets takes place.
Capital gains tax is not applicable on assets which are inherited. As per the Income Tax Act of India, assets which are exempted from tax slab include gifts which are inherited or are transferred via will.
What all comes under capital asset?
Some of the common inclusions in the list of capital assets include the following:
The following assets do not fall into the category of capital assets:
Any kind of stocks, raw material or consumables which are held for business purpose or profession.
Agricultural land in rural area
Personal goods like furniture, clothes etc. which are held for personal usage
The following are not considered capital assets:
Special Bearer Bonds 1991
Gold Deposit Bond issued under the Gold Deposit Scheme, 1999
What is the difference between long term and short term asset in capital gain taxation. Long-term capital assets are those which are held for a period longer than 36 months whereas the short-term capital assets are held for 36 months or less.
Another important point of consideration that one need to take care of is the holding period which is applicable to the particular assets held by the person. In certain assets, the holding period is more than 12 months but still, they are considered as part of the long-termasset. This rule comes into picture if the asset has been transferred after 10th July 2014 (date of purchase stands irrelevant).
The following assets when held for a period more than 12 months are considered to be long term capital assets:
Equity or preference share (of company sites in stock exchange of India)
Units of UTI
Securities like bonds, government securities, debentures etc.
Zero coupon code
Units of equity oriented mutual funds
Calculation of Capital Gains:
Tax on long-term capital gain: It is taxable at 20% + surcharge and education cess.
Tax on short-term capital gain: In the case of securities, transaction tax is applicable, then tax applicable is at the rate of 15%+surcharge and education cess.
Calculation of Capital Gains:
Short-term capital gain = Full value consideration- (cost of acquisition + cost of improvement + cost of transfer)
Long-term capital gain = Full value of the consideration received or accruing – (indexed cost of acquisition + indexed cost of improvement + cost of transfer). Where;
Indexed cost of acquisition = Cost of acquisition X cost inflation index of the year of transfer/ cost inflation index of the year of acquisition
Indexed cost of improvement = cost of improvement X cost inflation index of the year of transfer/cost inflation index of the year of improvement
The cost of transfer is a brokerage paid for arranging the deal, legal expenses incurred, the cost of advertising, etc.
Advantages of capital gain tax
The tax payments differ till the time assets are sold. Security investor doesn’t have to pay tax on profits earned from bonds and stocks till the time he/she sells the assets.
Tax rates on long-term capital gains are lesser than normal income tax rate.
Capital gains rate does not apply to inventory, even if this asset is held by you for more than one year.
As per the Section 54 and Section 54F of the Income Tax Act, there is a provision wherein long-term capital gains can be used to construct or acquire resin details house property if, conditions like time frame within which the gain must be invested for buying or constructing property, then the person is exempted from capital gain tax.
Loanyantra stands with you if you look for investing your capital gains in a property. It helps you for a easy and hassle-free home loan process and management.
It is always advisable to take expert advice how to invest and where to invest before selling the assets.