Love Break-up!!! Because of Savings!!! Are you saving to buy a new home?

Naveen and Neha are a perfect match and an understanding couple. Naveen has a plan for everything in life. Neha is a cheerful and practical woman. Both of them discuss and get things done. So what made their ways apart? I should tell this.

Neha wants to visit a good restaurant and have great food. Naveen says ‘no’.

Neha wants to get away from her daily schedule and go for a vacation. Naveen says ‘no’.

Neha’s birthday time!!, Naveen got a card for her. She is happy, he had given her a card atleast. 

 Finally, Neha asks Naveen. “We earn well. We can spend though not for a luxurious life but for a relaxing and comfortable life. But why do you always say ‘no’ for anything that makes me feel happy?”

Naveen  now opens up. He has a dream house and he wants to buy it. 

So what is he doing? Yes. Saving saving saving.

Saving, forgoing the comforts and the feel good factors too??

with and without home loan savings example and loan calculator
With and Without homeloan. Know more with real example and calculations
Yes. He wants to save not just for the down payment of the home, but for the whole value of the property. So how does he save?
Let us see how it works without a homeloan

Age : 26 years

Salary : Rs.40,000

Expenditure : Rs.15,000

Savings : Rs.25,000

His dream home value : Rs. 40 lakhs.

On an average per year he saves : Rs. 3 lakhs

No. of years he should save : 14 years.

In the mean time the property’s value increases which means he has to save even he reaches his limit. Ofcourse, his salary increases and he can save more. If you observe in the example, he saves more than half of his salary. Without even fulfilling smallest of his desires. When will he explore life if not at the age of 20s and 30s.

So, Neha asks him to go for a home loan. He rejects. She tries to explain.

So, is it that you should not go for saving at all if you buy a home? No, save for the down payment and for the rest go for a home loan.

Let’s see how it works with a homeloan.

Age : 26 years

Salary : Rs. 40,000

Expenditure : Rs. 18,000

Savings : Rs. 22,000

His dream home value : Rs. 40 Lakhs

No.of years he saved : 2 years

Amount saved : Rs. 8 lakhs. (used for down payment) 

Home loan amount : Rs. 32 Lakhs

Salary after 2 years : Rs. 60,000

EMI Fixed : Rs. 32,000

Now, at the age of 28 years, he is enjoying in his own dream home. Since, EMI is fixed, he need not think of saving for a home when his salary increases. He can invest and diversify his extra income, where he gets more returns.

Is that the end? No, you rather have to, monitor your homeloan via loanyantra, the synonym for loan management services. This helps you to put an end to your home loan faster.

Experts help will always work. So, seek help to pay your home loan faster. That is what exactly Loanyantra does for your homeloan

Ohh!! the love story above!! They didn’t breakup 🙂 Naveen understood Neha’s ideas and followed her. They lived happily ever after in their own home. 😉 

How can you have a break up if you listen to her?  😉

Puravankara’s MRIP Offer

A very interesting concept –  You get assured rent for fixed years once you invest in such property. Let’s dive in to the topic.

Puravankara’s Provident Housing came up with an innovative method to grow their business and give value to our investment.

Managed Residences Investment Plan (MRIP)

 Puravankara, one of the top most real estate developers in India, believes in “We cannot really depend on our job alone if we want to achieve financial freedom. Creating and having multiple source of income is one of the best ways to step up the ladder and achieve our financial goals”.

Hence, came up with the solution, buy the ready-to-move in apartment with assured rent for seven years along with appreciation in rent.

purvankara-assured-rent_loanyantra-com

Here are some quick points for more information.

  • An innovative, low risk real estate investment to help you build a long term rental income.
  • Investment structure – Buy & Sale back with a contracted lease term of 7 years.
  • Puravankara’s MRIP offer provides long term lease management services from JLL, the leading international property consultant.
  • Multi-city residential assets across Chennai, Bangalore, Coimbatore & Kochi.
  • Investments across 3 Price buckets –   approx. 35 to 55 lakhs ;  75 to 125 lakhs &  2.5 to  4 cr.
  • Benefit from committed monthly rentals with annual rent escalations, long term capital appreciation, zero maintenance & hassle free process.
  • All apartments offered under Puravankara’s MRIP offer are ready to move in apartments and are completed apartments/ completed projects.
Pros and Cons of Puravankara’s MRIP Offer :
  • As the company believes, it is always better to have multiple investments and multiple sources of income. And hence, this is a best source of second income.
  • Buying a home for rental purpose is a very common practice in India. Finding a tenant and getting assured income is most challenging. This offer encourages a hassle-free maintenance process for seven years by not only paying the rent but also  maintenance charges.
  • You just have to pay the property tax every year.
  • Be careful while buying as the price under Puravankara’s MRIP offer is slightly higher than the price for the units with no offer.
  • But if you are an NRI or retired employee or low risk taker, it is always best to invest.
  • Go for Purvankara’s MRIP Offer, only if you can self-invest. Since, under this offer, the pricing of the unit is relatively higher, it doesn’t make the best option if you have to pay more interest to banks under home loan.

How Loanyantra Works :

Investing in a property is no small issue. And we understand it. So your search for home ends here. Think home loan and think loanyantra.

As we discussed above about managing homes, we, in loanyantra, manage your home loan. Call us for further queries about free services on home loan management.

Personal loan for Infosys Employees

Personal loans for Infosys employees come with personalised features and discounted interest rate. With extended offers of personal loan Infosys employees can enjoy special features like quick and simple personal loan process, fixed rate of interest where interest is charged in monthly reducing basis on personal loans. No security or collateral required for Infosys employees. Attractive personal loan interest rate for Infosys employees.

Infosys employees Personal Loan Documents Required for instant approval from ICICI bank is

  • Personal Loan Application form.
  • Photograph
  • Age proof
  • ID proof
  • Income proof
  • Bank statement
  • Residence proof
  • Signature verification proof.

Many other banks offer competitive interest rates but with do some eligibility check for example, Axis bank personal loan for Infosys or some selected MNCs features some eligibility criteria like

  • Minimum age of applicant: 21 years
  • Maximum age of applicant at loan maturity: 60 years
  • Minimum Net Monthly Income: Rs 15,000
  • Maximum loan available: Rs 15 lacs.

Infosys personal loan is specially designed for the Infosys employees and Infosys bpo employees in ICICI bank. Zero Balance salary account can be maintained by Infosys employees with ICICI bank.

If you are an Infosys employee, get different deals on different loan products. ICICI personal loan offer for Infosys employee includes not only discounted interest rates but also rewards for paying loans through EMIs. Your minimum average salary per month should be minimum Rs. 15,000 in ICICI salary account for ICICI personal loan as an Infosys employee.

Before 2013, Infosys had special offers and schemes for its employees on different loans. Earlier it was tough to get loans from different lenders. Now Infosys had stopped schemes on loans for its employees. But personal loan and car loan schemes are still existing for Infosys employees.

Get the work done even smoother without even to wait as Loanyantra can assist you in every step by the loan experts. As an Infosys employee either in consultation or BPO, you can avail varied offers. So, get to know everything.

 

 

Who can be a home loan co-applicant ? Is it mandatory?

In the present day, when the cost of living is going up and usually both spouses work, having a home loan co-applicant becomes more of a necessity than a requirement. There is no legal requirement to have a home loan co-applicant.

home loan co-applicant


In order to enhance the loan eligibility, a borrower has an option to resort to by having a home loan co-applicant. This way, the total eligible income for the purpose of computing the housing loan increases, thereby resulting in higher loan eligibility.


Home loan co-applicant is a person who shares the equal responsibility towards the repayment of the home loan. Such type of home loans are called Joint home loans. Whereas a co-owner is the person who has a share in the property and rights on the property too. A co-owner of a property can be the co-applicant in home loan. But it is not necessary that the co-applicant of the home loan is the co-owner of the property.

home loan coapplicant
Home loan co-applicant adds value to your home loan


Who can be a home loan co-applicant 


A bank does not permit friends or relatives who are not blood relatives to take a loan jointly. Only if the co-applicant receives income from a regular source will that income be considered for determining the loan eligibility.


In most cases, spouse is the most common and preferred combination.



In case of parents and children , these rules will apply:

  • Father/ Mother and son

If the applicant is the only son, he can jointly apply with his father with both the incomes being considered. The property should be in their names jointly and it does not matter who the main owner is. This is because in any case the son is the legal heir of the father’s property.

  • Father/ Mother and sons

In case a person has two or more sons and if he wants to apply jointly with one of them, he should not be the main owner of the property. This is because, on his death, his children should inherit the property jointly and may cause an inheritance dispute.

The father may only be taken as co-applicant and his income may be considered for the loan. He may be a co-owner or not own the property at all. Under no condition should he be the main owner of the property.

  • Unmarried daughter and Father/ Mother

An unmarried daughter can apply jointly with their father. However, the property should only be in the name of the daughter and the income of the father should not be considered . This is to avoid any legal complications on the subsequent marriage of the applicant .

Where applicant is the owner and has a son and a daughter, an affidavit may be obtained from the daughter that she has no claim on the property.


In case of Brother and brother/sister 

Home loan co-applicant approval is subject to certain terms and conditions like address of both should be same which means a joint family and intent to stay together in joint family in future. It is at the sole discretion of the bank.


Who cannot be a home loan co-applicant :

  • Father / Mother and Married Daughter 
  • Brother and Sister 
  • Sister and Sister

Documents Needed : Documents are needed from both the applicant and co-applicant. 


General home loan documents needed are :

  1. Identity proof
  2. Address proof
  3. Salary slips
  4. Bank statements

Loan Eligibility

A common doubt is – ‘Will the home loan eligibility amount increase if we opt for a joint home loan?’  Yes, it will. Banks will be ready to offer you higher loan amounts if you opt for a joint home loan. The reason for it is that your repayment capacity increases as there are now two people who repay this loan. How much it would increase depends on the income of co-applicant. Apart from income, organization reputation is also considered. Be sure that you compare multiple loan offers before deciding on loan eligibility.

Benefits of being a Home Loan Co-Applicant 

  • Increase Home Loan Eligibility :

If you are not the co-owner of property but would like to help your spouse or relative to increase their Home Loan eligibility. In this case, you may consider being home loan co-applicant. It is absolutely necessary that you should be aware of all the risks and legal liabilities.

  • Taxation Benefits :

From a taxation point of view, a joint home loan is also beneficial as all co-borrowers can claim tax deductions under section 24 (upto Rs. 1.5 lakh) of the Income Tax Act against interest paid and under Section 80C (up to Rs. 1 lakh ) against principal repaid. 


The tax benefits that can be claimed would be in proportion of the share that the individuals have in the loan.

Dis-advantages of being a Co-applicant 

  • CIBIL score of the co-applicant will be impacted.
  • Reduced credit eligibility : Being a co-applicant will reduce the credit eligibility to the extent of 50% of home loan value. It may impact approval of any future credit requirement of co-applicant.
  • Operational Hassle : It is an operational nightmare  for home loan co-applicant at the time of availing or closing the home loan.

Repayment Options 
The repayment process for joint home loan is similar to that of a regular home loan. The payment, however, has to be made through one cheque. 


Renu Sud Karnad, manging director, HDFC, explains, “Payments can be from a single or joint account by way of cheques or Electronic Clearing System (ECS).” 


“Another way of repayment could be that the co-borrowers share the number of EMIs between them such that a specific number of cheques can be issued by one borrower and the balance by the other,”  says Suvrat Saigal of Barclays Corporate India.


What if Dispute Arises
home loan co-applicantThe problem arises when one of the co-borrowers refuses to repay the loan. Be warned that  each party would be liable for part of repayment or up to as much as all of the repayments.


Renu Sud Karnad of HDFC says, “It does not matter whether the payment is made in the normal course by only one of the joint borrowers as long as the full EMI is paid as per schedule”.


In the event of default, the lender will proceed with the normal recovery process  which may include a legal recourse against all joint borrowers.

Solution 


home loan co-applicant

  • Agreement between all Home Loan Applicants  – 

To avoid any legal dispute in future, it is advisable to all home loan applicants to sign a separate legal liability agreement on a stamp paper. And get the paper notarized. This agreement will clearly segregate the liability of each party. 

  • Online Term insurance Plan – 

What if bank insists on a co-applicant. If the bank insists only to hedge risk against home loan repayment, then a simple solution is that the primary borrower can buy an online term insurance plan and can submit a copy of a that policy assuring bank that bank that he is insured against home loan.


Conclusion


Joint home loans are definitely beneficial as compared to normal home loans. In case you are looking for a home loan and you can speak to your blood relatives to get a joint home loan, be sure that the EMIs are paid as per schedule.

Home Loan Schemes and Home Loan Interest Rate for Women

Home Loan Interest Rate for Women are softened in India

A sharp rise has been noticed in the number of women property buyers in India of late. These days, women play a crucial role in taking a key decision like home buying. About 30% of the property buyers in urban India comprise of women buyers. Financial institutes and banks are often known to offer certain privileges to women home buyers when it comes to providing Home loans for women. That’s why it’s more important for the women borrowers to acquire more knowledge on home loans and the new housing market.

women buyers home loan interest rateand stamp duty prices discounted
Women Power – Dream Big and Invest in Real Estate
Here are some of the advantages female homebuyers have in India:
  • Women home buyers can avail home loans at cheaper rates from some of the leading Indian banks and financial organizations. Banks are keen to lend funds to women as they don’t miss out on the due dates and repay loans more punctually. However, the banks tend to run a check on the Adhaar Card, PAN Card, Driving License, and Voter ID prior to issuing home loans to women borrowers. Certain utility bills are also sought as residence proof e.g. telephone bills and electricity bills.
  • Housing-for-All Mission of the Indian Government has set the norm for women to be either sole owners or co-owners of new homes at cheaper rates. This is a direct effort of our central government towards empowering women belonging to underprivileged and low-income groups. It even has a direct impact on shaping the new housing market.
  • A lower stamp duty is accepted from women across a number of Indian states. The women borrowers are expected to pay 2% lesser on stamp duty in states like Haryana and Delhi. That’s one reason why some of the couples tend to get their properties registered jointly in the name of the female partner. A lower stamp duty is met even when the female partner receives the property in the form of a gift.
  • Women home buyers can even enjoy a tax deduction worth 2,00,000 INR on the amount of their home loan interest. While letting out your property, the rate of interest to be met by you and your husband are subject to tax deductions if you sign up as co-applicants to your home loans.
  • While letting out homes, women are even allowed to offset the net rental value by deducting the rate of interest to be met against their mortgage loans.

All key home buying tips for women suggest that the SBI is not just one bank that softened the rate of home loan interest for women.

‘Woman Power’ was another scheme launched  in 2015 by the HDFC bank for motivating the woman home buyers. This scheme enabled women buyers to achieve home loans with a lower interest rate 5 bps below the normal applicable home loan interest rate. The Mahila Awas Loan was yet another financial scheme that enabled women to achieve an amount of up to 12 Lakhs; this scheme was launched by the Aspire Home Finance, known as MALA (Mahila Awas Loan from Aspire) Scheme. The rate of interest for this loan is much higher and is directly proportional to the risk borne by the applicants as they often fail to produce proper identity proofs.

Women belonging to low-income groups are even endowed with other financial schemes like that of the MALA scheme. This scheme assists women belonging to the unorganized sector like those that are working as domestic help and daily-wage earners to be able to pull out of their financial crisis.

According to the Narendra Modi government’s Housing for All Mission, women should be either co-owners or sole owners of affordable houses. The government decided that this should be so to empower women from low-income households. In poverty alleviation schemes in Indian states like West Bengal, women’s names are included in the land titles of the plots that the government allocates to low-income households.

Women home buyers are also eligible for stamp duty concessions under certain state governments. The men in Delhi need to bear a stamp duty worth 5% of their property price while women have to bear only 3%.

In India, home ownership, which has been dominated by males for ages, is all set to undergo a radical change in favor of our women. Thanks to a large section of developers and financial institutions for all their efforts.

Author Bio:

Ron Johnson has worked as a financial strategist for a few eminent business houses based in India. Ron is still attached with many such organizations that boast a strong presence throughout the web. Currently, he’s involved in shaping the roadmap for a few resourceful global websites that expedite corporate financial solutions for fortune 500 clients.

 

RBI Hikes Repo Rate. Will EMIs also Increase?

First time in Modi’s regime, RBI had back-to-back increased the Repo rate by 25 basis points which is gone to 6.50 from 6.25. Since 2014, till the recent Budget 2018, RBI either reduced the repo rate or maintained status quo. Let us know more details from Loanyantra about how the Repo rate, home loan, personal loan interest rates are interlinked.

What is Repo Rate?

Repo rate is the rate at which the RBI lends money to the banks. As we pay interest to the bank s when we take loan, the same way the banks pay interest to the RBI when the banks take loan. So, that interest rate at which the banks pay to the RBI is called Repo rate.

Impact of Repo rate hike on banks and banks rates – Understanding through Loanyantra.com

So, the repo rate increase means, the banks need to pay more interest to the RBI. So, for the banks it is time to increase the revenue. The source of revenue to banks is Public. So, banks calculate their earnings, profits and then increase their source of income from lending (home loan, personal loan, etc) by increasing the lending rates.

Repo rate hike and the Banks Home loan, auto and other personal loan interest rate hike – 

The leading banks like State Bank of India (SBI), Punjab National Bank (PNB), HDFC and ICICI Bank increased their benchmark lending rates or MCLR by up to 10 basis points, making loans a little costlier for consumers in the last quarter one week before the RBI rate hike.

Every time there is a repo rate cut, SBI is the first bank to pass on the benefits to the customers by reducing the lending rates. Which is followed by other major banks like ICICI and HDFC.

That was the first time we have seen these major banks increasing the lending rates before the increase in the RBI repo rate. Hence, it is anticipated that within near period, there will not be any increase in the lending rates by the major banks like SBI, ICICI, HDFC, AXIS Bank. And truly there were no increase in the home loan interest rate.

RBI repo rate hike, loan interest rates and EMI hike
RBI Repo rate Vs Loan Interest Rates Vs EMI hike

While there is a back-to-back hike of repo rate by RBI for two times this year, 2018, it is natural for the borrowers to estimate a hike in the lending interest rates. However, the lending leaders are yet to react. This is the question of total system liquidity as RBI also hiked reverse repo rate to 25 basis points. If liquidity is tight, banks may react on the hike by increasing the lending interest rates. We may have to wait for the news from the banks before even we calculate our EMIs.

The home loan interest rates were never below 9% before 2014. In the near recent times, the home loan interest rates have reached to the maximum of 8.7%.

So, it is still advantageous, for all those who want to buy home, go for home loans and get the best one that suits you better via loanyantra.com. as, though the repo rate has increased, the lending rates remain the same, atleast for a while.

Hurry and fix your loan, home, auto or any other personal loan at the best interest rates ever. Do your research with Loanyantra.com., know the interest rate trends, and the market trend. Get the best fit loan from your favourite lender. All you need to do is just give a missed call to 040-71011991. Our relationship manager calls you and you can discuss in detail and get the best product with low interest rate.

 

SBI Home Loan Process – Step by Step

Searching for the best home loan is as important as searching for a dream home. You might find the best home loan lender, but the process involves many steps. You have to be patient and careful while dealing with the process. Though applying online has become very easy, reaching the disbursal stage is no cake-walk. If you had chosen a nationalized bank, you have to be even more careful in following each and every step.

Here is the step by step procedure for your SBI home loan disbursal.

  • Collecting the Property related Documents
  • Legal Opinion
  • Property Valuation
  • E-stamping
  • Submitting the Application
  • Documentation
  • Disbursement

1.Collecting the Property Related Documents:  Firstly, go to the builder and get all  the property related legal documents. Get the Legal opinion and Share of agreement and Sanctioned Site plan from the builder.

Collect : Booking Receipt along with the copy of the cheque.

2.Legal Opinion: Go to an Advocate who is in the SBI Panel with the documents in step 1 to get it verified. For the advocate to give the final legal opinion he needs to see the Sales Agreement & Construction Agreement and he needs a photostat copy of it.

Normally if its a builder share following documents need to be collected from the builder :

a. Encumbrance certificate till current date (from some 35 years advocate may ask)

b. Tax Paid receipt till date. Lawyer might ask you for multiple documents, so the maximum delay is expected at this step. Once this step is done, half part is done.

Collect : Legal opinion

3. Property Valuation: Once the Legal valuation is done, go to a property Valuator who is in the SBI Panel with the sales agreement. He valuates the property and gives a letter.

Collect : Valuator statement

4. E-stamping: SBI mandatess the Sales agreement and Construction agreement to be estamped/Franked.  Regarding whats the value to which e-stamp, do concern the branch staff. Normally for a ongoing construction flat, there are 2 Agreements a)sales Agreement and b) Construction Agreement. E-stamping and franking are actually the same, e-stamping is the new technology where as franking is the old one where we stamp it, Franking can be done only at register office where as e-stamping can be done at post offices, Syndicate banks, Selected registrar offices, etc.

Note: Make sure you, your wife and builder sign on the e-stamp which you purchase.

Collect : e-stamp and franking on the sales agreement

5. Submitting the Application: Once you get the valuator statement and Legal opinion, go to the SBI with the filled in application forms along with the required documents for loan application. Also attach the legal opinion and the Valuatorstatement.

Note: Its always good to go for a interiors loan (max up to 3 lakhs) along with the home loan, which might save you the hidden chargeswhen combined. For the interiors loan you need to get a quote from an interior designer and get it valuator sanctioned.

Collect : Application form Valuator Statement

sbi-home-loan-process_loanyantra

6. Waiting period: Now its time for the waiting period. The waiting period may vary from person to person. Normally in the special home loan branch, it can be as fast as 3 days. Periodically call them to ensure that the process is going forward. Also make sure they inspect the property, because unless and until they inspect, you can’t reach the disbursal stage.

7. Documentation: Once the loan is sanctioned, you get a call from the bank for documentation. Carry all the original documents which you have submitted while applying for the loan.

Loan applicant along with guarantor needs to be present at the bank for the documentation. Builder is normally not required, if its a land lord share, then it is a must for him too to attend.

8. Disbursement: Once we get the Loan Sanction letter go to the builder and get the following documents 1. NOC from the builder stating he hasn’t mortgaged this property to any other bank 2. Tripartite agreement [This is required only if its a ongoing construction.3. Demand Note from the builder[how much money he needs for the particular construction stage]. Note: Please make sure whatever demand note they make is matching with the schedule of payment.

Collect : DD in favor of builders

9. If it is an under-construction property, for partial disbursements and for further payments you can just send a mail to the manager to please disburse the amount XXX and then ask the builder to send a boy to the SBI branch with the original demand note and they can collect the DD from the bank directly. You need not go to bank anymore.

10. Registration : Now its time for registration and the final payment to be made to the builder. You need a DD for Registartion Stamp duty in the name of Sub-registrar and a DD for Mortgage Stamp duty in the name of Sub-registrar

Conclusion. Send an SBI Postal mail form after registration saying you had submitted all the registered documents to SBI.

How Can Loanyantra Help You.

The above process needs a lot of care and patience. More than anything, it needs your valuable time, planning and energy. Once you register with loanyantra, you can relax and fulfill your loan disbursal process. Our relationship manager guides you in each and every step, also assisted home service for all your documents that need to be submitted in the bank. Also, loanyantra’s relationship manager is accessible to you to answer your questionnaire , anytime. All you need to do is just login, as it doesn’t cost you but it only helps you.

Frustrated with Your Home Loan Lender? Here is the Solution for Best Bank for Loan

Answer these questions and think of a solution for the best bank for your requirement.


How many of you are frustrated with your home loan lender? Either for a loan disbursal or for a balance transfer or the most important for the higher interest rate changes!!

new home laon, balance transfer, or any loan, get the best product via loanyantra
Frustrated with your lender? Your lender doesn’t reduce your loan interest rates? Chill out…Loanyantra is the solution.


How many times do you postpone going to a bank for a balance transfer and doesn’t go because you didn’t research which bank is giving lowest interest rate or which bank charges less on the balance transfer?


How many office hours do you spend to visit the bank on your home loan work?


How many of you didn’t research before taking a home loan and now taking the pain?


How many of you dream of closing the home loan fast but don’t know how and when?


Do you know, 50% of the people in India use banking portals. Out of which 40% use them for research. 18% of the time is spent on searching for the best banks while on internet.


The one-stop solution for all these is
www.loanyantra.com
Visit the website and fill the details. Get a solution to all these questions. Truly a reliable, economical, one-stop solution.

Renting or Buying a House

Renting or Buying a home – Should you stop renting and buy a home? What are the costs involved? Calculate the hidden costs for renting or buying.

If you’re ready for the commitment, you bet!

Yes. Buying a home is a big decision. A big commitment, too. But if you think renting vs buying a home thoroughly, clearly understand your financial situation, and you’re ready for the short- and long-term responsibilities, it can be one of the most rewarding decisions you’ll ever make. Once you decide on renting or buying a home in India, Loanyantra helps in building the bridge between you and your dream home.

Rent or buy a house costs calculation and which is better
Costs involved in renting or buying a house in India
Renting vs Buying – Why buying a home is a good idea.

Build equity: 
Every EMI payment you make is part interest and part principal. The principal is what you owe on the loan and it goes directly towards your home’s equity. It’s like investing in yourself. Which is a lot better than 100% of your rent payment going to the landlord. Plus, whenever home values (land price) increase (and historically they do) so does the value of your home.

Tax advantages: 
The interest portion of your monthly payment is like any other interest. It’s the fee you pay for borrowing the money. However, the great thing about home loan interest is it’s tax deductible. And so are your property taxes.*

Loan options: 
There are different types of loans to choose from. So depending on your financial situation, and long and short term plans, you can apply for a home loan that will fit your needs.

Live your way: 
Do you feel comfortable in a sparse, minimalistic space design? Or do you like different colored walls and pictures everywhere? As a homeowner, you’re free to live, decorate and change your home however you want. Rented houses’ owners do not allow the walls to be drilled or make the way comfortable for you.

What the experts say on renting or buying a house in India.

Many experts in the real estate market believe it makes good financial sense to buy your home rather than rent. Experts predicted that rents for apartments would increase year on year nationally – by average 8% in 2014-2015 – by 7.5% each year in 2015 and 2016. Though due to demonetisation in India, the residential rental value remained same in some areas for an year, now there is again a steep increase and rents will continue to increase year on year.

If the average national home loan interest rate hovered around 10,5% (they’re much lower today), home ownership may well be a better investment of your money, especially if you plan to stay in the home for at least five years. Experts estimate that buying will be cheaper than renting until the 30-year fixed rate reaches 12%, more than what it is currently!

 Important homeowner costs to consider.

Down payment: 
Different loans require different amounts. The RBI allows LTV (Loan to Value) of
90% for home loans up to INR 30 Lacs
80% for loans between INR 30 and INR 75 Lacs
75% for loans beyond INR 75 Lacs.

While deciding on renting or buying, down payment calculation is a must. Decide on your budget, calculate your savings, keep it ready for down payment.

Insurance:
Property insurance  or home insurance is recommended, once you get into your home. Flood or other types of coverage may also be required.

Now, in India, home loan insurance is made mandatory. Insurance on home loan supports your family in any unforeseen event by paying the outstanding loan amount. The home loan insurance offered by the loan cover will progressively come down as the home loan gets repaid. For instance, by the 10th year, if the loan cover would have been to be Rs 13.5 lakh. By the 14th year, it would have been reduced to about Rs 3.5 lakh. 

Property taxes: 
Varies widely. Determined by local city or state government. 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.

Maintenance and home improvement: 
From a leaky faucet to new paints, you don’t have to fix everything yourself, but paying for and getting it done is your responsibility. Maintenance charges to the society need to be paid which you pay even when you stay for rent in a house. But for the next five to ten years, you need not worry about the shifting or transportation charges,  home improvement costs and repair costs if you had used average quality for the first time.

But over the time, you have to be responsible for your sweet home for making it look good and neat. You can also do a makeover whenever needed with the home improvement ideas and facilities in the market by top-up loan or home improvement loan. Once you are a loanyantra customer, loanyantra helps you in getting the best interest rate in the market at a discounted price.

Why you should stay for Rent? Reasons to keep renting for now.

Sometimes, due to your personal situation and long term plans, renting is currently a better option.

  • You anticipate a change in employment or income in the near future.
  • You’re not comfortable making a long-term commitment to a particular location or area.
  • You need to build a stronger credit history.
  • You’re not prepared to handle responsibilities like leaky faucets, paint and other routine maintenance.
  • You’re not financially ready to cover monthly and yearly costs for utilities, insurance and taxes.

Rent if – You are currently prioritizing other financial goals above homeownership. Buy if – Homeownership is your primary financial goal, and you are both aware of and comfortable with how the cost will affect your progress towards your other goals.

*Everyone’s tax situation is different. Please consult a professional tax advisor.
** This summary is based on a Rs-30,00,000 home loan amount, loan term of 240 months and an interest rate of 10%.
Loanyantra offers the best interest rate ever in the market. Know more and save more.

Ask yourself – 5 Questions about Home Loan Insurance.

Q1. What is home loan insurance? Is home loan insurance and house insurance same?

Home Loan insurance or insurance on home loan supports your family in any unforeseen event by paying the outstanding loan amount. Home loan insurance is an insurance term plan provided on your home loan amount for the same tenure like your home loan. Now in India, home loan insurance is made compulsory by all the lenders while opting for the home loan. Team Loanyantra can suggest you the loan products with low home loan interest rate as well as  home loan insurance low premium products.

Before that we should know that house insurance is totally different from home loan insurance. With regard to home loan insurance, you get the home loan insured whereas with house insurance, you get the structure of the house and the contents of the house insured.

Q2. How does Home loan insurance work? Will the home loan insurance cover reduces over the home loan tenure?

“A loan insurance plan covers the balance to be paid in case of the borrower’s death as per the loan schedule decided at the time of taking the policy,” says Rituraj Bhattacharya of Bajaj Allianz Life Insurance.

The home loan insurance offered by the loan cover will progressively come down as the home loan gets repaid. For instance, by the 10th year, if the loan cover would have been to be Rs 13.5 lakh. By the 14th year, it would have been reduced to about Rs 3.5 lakh.

Q3. How to pay the home loan insurance premium ?

To calculate the home loan insurance premium, primarily, the home loan interest rate is taken into account. A few companies or financial lenders also have a different rate for metropolitan and non-metro areas.

The other factors considered are, the age and medical record of the policy holder, the loan amount and the repayment period. The larger the loan amount or the repayment period, the higher the premium.

The home loan insurance premium payment can be paid at once or annually. You can either choose, 3,4,5,7 or 10 year, not exceeding 2/3rd of the loan term. For example, if you have to pay a premium of Rs.50,000 and choose to pay annually,  the bank includes that premium into your loan amount and calculates the EMI. So be wise and diversify your funds.

home loan insurance _loanyantra

Q4. What are the tax benefits while paying the home loan insurance premium ?

Only, if the premium is paid by you, and not by the lender, you are eligible for tax deduction under Section 80C and Section 10(10D).

If it has been paid by the lender and is part of the loan which you will repay through EMIs, it will not be possible to claim deduction.

Infact, the tax benefit is very negligible. The tax limit is Rs. 1,50,000. So, when you choose to pay annually, the premium is spread across your tenure which is added in your EMI. Understand that you don’t lose much.

Q5. What are the other options to insure your home loan? 

Usually home loan insurance is compared with insurance term plans. The main advantage with term plans is they cover other financial needs along with the home loan. However, whether you opt for a home loan insurance or choose any other term insurance plan, the premium is calculated accordingly, which can be higher for higher cover.

But now in India, it is mandatory to opt for the insurance for any loan you take. So, you can only opt whether you pay the premium directly or pay the premium through EMIs. 

NOTE :  Why should you opt for Home loan insurance?

The solution lies with you. But, the best advantage with home loan insurance is, incase of unexpected happening to the borrower, the insurers go to the bank directly to close the loan. The family need not go around the banks or insurance companies. So, for those whose family does not have much exposure about these financial matters, it is a good decision by the lenders to make it mandatory. So, plan smart and choose the best fit.