What is GST? Impact of GST on Real Estate Sector.

What is GST?

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.

 

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No price change estimated after implementation of GST

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.

Guide to the Home Loan Process

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.

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Know the home loan process before-hand
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.

  • Income proof
  • Age proof
  • Identity proof
  • Address proof
  • Employment details
  • Proof of educational qualifications
  • Details about the property if finalized
  • Bank statements

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.

State Bank of India cuts the processing fee till 31-March-2017

SBI Home Loans no processing fee for New Home Loans and for Balance Transfer till 31st March 2017.

State Bank of India to boost the volumes of Home Loan business for the last quarter of the 2017 financial year, SBI had launched a special campaign for Home Loans. Under the Home Loan campaign, Processing Fees on all Home Loan proposals(both takeover and new) sanctioned and partially/fully disbursed upto 31-Mar-2017 will be filly waived. The waiver of the processing fee will also be made available to proposals sourced upto 31st March 2017, provided the loans are partially/fully disbursed latest by 30th April 2017.

However , the processing Fee at the applicable rate will be recovered upfront in respect of all Pre-Approved Loans(PAL) and the same will be refunded to the customers by way of credit to the loan account in respect of all PAL proposals source during the campaign period upto 31-Mar-2017 and partly/fully disbursed on or before 30th April 2017

SBI Home Loan
SBI Home Loan

With the decrease in the MCLR for 1-year to 8.00% was itself a big boost to the Home Loan customers. But increase of the margins from 0.10% to 0.60% has added heavy burden to the home loan seekers. Most of the customers are still seeing the fall in the Home Loan rates from 9.10% to 8.60% which is like a mirage which is a short term profit and long term loss compare to the customer who had taken loan in Dec-2016.

Let me explain in detail,  Before I tell you, why customer who had taken home loan in Dec-2016 is better rate then present. I would like to explain, how the interest rate is set. Interest rate consist of 2 components.

 

Interest Rate = 1-Year MCLR  Rate + Margin Rate

Recent announcement was :  1-year MCLR Rate : 8.00 %

Margin Rate  was : 0.60 %

So effectively the Interest rate was set to  8.60 %  = 8.00 % + 0.60 %

What is 1-year MCLR ?

When we avail a loan with 1-year MCLR,  it’s 1-year Fixed loan. Which means any changes in  MCLR during that 12 months, your home loan will not be affected. For example if you availed home loan in Dec-2016 your interest rate change will be only in Dec-2017. So any change , decrease of MCLR or increase of MCLR, your home loan rate will not change during this 12 months. In Dec-2017 your home loan rate will get updated based on the 1-year MCLR during Dec-2017. Again next change will be next year Dec-2018 and this would continue till closure.

What is the Margin Rate ?

Margin Rate is what Banks take as the operational costs. It gets fixed when you have taken.  For example if you had availed home loan in Dec-2017 your home loan should have been 9.00% (8.90 + 0.10) your margin should be only 0.10 %. So your Interest rate would be 1-year MCLR + 0.10% for ever.

Now let’s compare your home loan with the new rates

Year 1-Year MCLR Customer who had taken in Dec-2016 time frame. Customer who had taken in Jan-2017 time frame.
Dec-2016 8.90 % 9.00 % (8.90+0.10)
Jan-2017 8.00 % 8.60 % (8.00+0.60)
Jan-2018 If 7.50 % in Dec & Jan 7.60 %(7.50 + 0.10) 8.30 %(7.70 +0.60)
Jan-2019 If 8.60 % in Dec & Jan 8.70% (8.60 + 0.20) 9.05% (8.60 + 0.45)
Sep-2019 If 9.25 % in Sep & Jan 9.35 %(9.25 + 0.10) 9.85%(9.25 + 0.60)

It would continue till the closure of the loan.  What we are seeing right now is, Short term profit and long term loss. People who convert to new rate without the long calculation they would start to pay every year 0.50% more than December rate.

1-year-MCLR had decreased drastically only due to demonetisation. Hopefully we need not stand in long Queues every year. Mostly its once in lifetime event.

Instead of banks making profits due to demonetisation drive they should have passed on the benefits to the end customers.

Hope to see cut in the Margins in coming days. Happy home Loans.

This complex calculations and to understand what is long term profit & short term loss versus short term profit with long term loss is better to be left to the professionals. http://loanyantra.com is best at this. We will wait for the margins to come down, then we would recommend the right change that would ensure you save the most on your home loans…

Happy Home Loaning…

Team

Loanyantra.com

Demonetisation effect on Home Loans

Demonetisation effect on Home Loans was seen from Jan-1st-2017, when SBI made a announcement of it’s forth-Night MCLR rate coming down to 8.00% from 8.90% and Home Loan rate from 9.00% to 8.50% itself shows demonetisation effect was positive on Home Loan rate. But, did you miss something, I am sure you have missed it.

MCLR had reduced from : 8.90% to 8.00%  :  reduced by 0.90%

Where as Home Loan rate has reduced by only 0.50% (9.00% – 8.50%) where did the remaining 0.40% go.

Who is taking that extra 0.40% , when its not passed on to the new home loan rate ?

What most of the banks have done is they have increased there margins from 0.10% to 0.60%.

Now let me go into more details about, was demonetisation a benefit or loss to new Home Loan Seekers and existing customers.

Demonetisation effect on Home Loans

Let me explain in detail,  Before I tell you, why customer who had taken home loan in Dec-2016 is better rate then post demonetisation. First I would recommend how MCLR is calculated  to understand why MCLR had reduced due to demonetisation and now I would like to explain, how the home interest rate is set by banks.

Interest rate consist of 2 components.

Interest Rate = 1-Year MCLR  Rate + Margin Rate

Recent announcement was :  1-year MCLR Rate : 8.00 %

Margin Rate  was : 0.60 %

So effectively the Interest rate was set to  8.60 %  = 8.00 % + 0.60 %

Prior demonetisation was 9.00% = 8.90%(1-year MCLR) + 0.10% (Margin Rate)

What is 1-year MCLR ?

When we avail a loan with 1-year MCLR,  it’s 1-year Fixed loan. Which means any changes in  MCLR during that 12 months, your home loan will not be affected. For example if you availed home loan in Dec-2016 your interest rate change will be only in Dec-2017. So any change , decrease of MCLR or increase of MCLR, your home loan rate will not change during this 12 months. In Dec-2017 your home loan rate will get updated based on the 1-year MCLR during Dec-2017. Again next change will be next year Dec-2018 and this would continue till closure.

What is the Margin Rate ?

Margin Rate is what Banks take as the operational costs. It gets fixed when you have taken.  For example if you had availed home loan in Dec-2017 your home loan should have been 9.00% (8.90 + 0.10) your margin should be only 0.10 %. So your Interest rate would be 1-year MCLR + 0.10% for ever.

Now let’s compare your home loan with the new rates

Year 1-Year MCLR Customer who had taken in Dec-2016 time frame. Customer who had taken in Jan-2017 time frame.
Dec-2016 8.90 % 9.00 % (8.90+0.10)
Jan-2017 8.00 % 8.60 % (8.00+0.60)
Jan-2018 If 7.50 % in Dec & Jan 7.60 %(7.50 + 0.10) 8.30 %(7.70 +0.60)
Jan-2019 If 8.60 % in Dec & Jan 8.70% (8.60 + 0.20) 9.05% (8.60 + 0.45)
Sep-2019 If 9.25 % in Sep & Jan 9.35 %(9.25 + 0.10) 9.85%(9.25 + 0.60)

It would continue till the closure of the loan.  What we are seeing right now is, Short term profit and long term loss. People who convert to new rate without the long calculation they would start to pay every year 0.50% more than December rate.

1-year-MCLR had decreased drastically only due to demonetisation. Hopefully we need not stand in long Queues every year. Mostly its once in lifetime event.

Instead of banks making profits due to demonetisation drive they should have passed on the benefits to the end customers.

Hope to see cut in the Margins in coming days. Happy home Loans.

This complex calculations and to understand what is long term profit & short term loss Vs short term profit with long term loss . Which one is better, to be left to the professionals. http://loanyantra.com is best at this. We will wait for the margins to come down, then we would recommend the right change that would ensure you save the most on your home loans…

Happy Home Loaning…

Team

Loanyantra.com

What is Re-financing?

Refinancing

If a borrower wants to have a change of the rules/terms or interest rate or payment period of the existing lender, he opts for a new lender. This is called as refinance. In a refinanced loan, the old loan is paid off with the new loan, and the old terms are replaced with new terms.

The concept of Refinance:

Many times when the home loan borrowers get overburdened with the interest rates of the bank, they decide to move to another bank offering better interest rates.

For example last year, RBI had slashed down the rate of interest for home loan borrowers. Banks like HDFC and SBI had slashed the interest rates by .15% in their lending rate but many banks were not willing to offer this leverage to their existing customers; but, the new home loan borrowers can avail this sliced interest rates.

Under such circumstances, the borrower might prefer for a refinance, to enjoy the benefits of the new customer.

The following information will be checked when you apply for refinance:

  • Your credit score and payment history.
  • Your income and employment history.
  • Your assets (stock, retirements and savings accounts).
  • An appraisal to determine the current value of your home.

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Types of Refinance

Considering the Indian market scenario, here is the classification of refinancing loans:

  • Rate and Term:  This is the most common type of refinance. Here you can replace the existing loan with a new one with new interest rate, new timeline (optional) and new terms.
  • Cash Out: In case you are willing to mortgage a large amount, then cash out is a good option. With cash-out refinancing, you refinance your mortgage for more than you currently owe, then pocket the difference. Be aware where and how you spend the extra amount.
  • Cash In:  A cash-in refinance is the opposite of a cash-out refinance. When you execute a cash-in refinance, you bring money and pay the new lender and lower the loan amount, either to qualify for the loan or to retire fast from the loan.
  • Short Refinance: . Here your existing bank may agree to pay off(refinance) your existing loan by replacing it with a new one, making it more cost effective for the borrower. But this might hurt your credit score.
  • No-Closing Cost: Here you can get a new loan after paying upfront fees of considerable amount. But make sure that you only pick up this option when your existing interest rate is lower than the present interest rate by at least 1.5%

Factors you should consider before refinancing your home loan :

  • Interest rates – Never ignore this factor while you plan for refinancing your existing home loan. It is advisable that you should search in a number of banks to make a comparative analysis of the interest rates so that you can find out which bank offers the best rates.
  • Processing charge: Getting your loan refinanced from another bank may require the bank to process your application which makes you liable to pay a processing fee which could be between .5% to 1% (depending on the bank you are opting) and hence, we suggest that you should always compare the savings you make while opting another bank. If the saving amount is significant go ahead with refinancing.
  • Tenure of the loan – Tenure and EMI are inversely related to each other, if you want a lesser tenure go for higher EMI and vice versa. Few banks do not agree on reducing the loan tenure, under such situations, no wonder you might opt for a refinance, provided you also have a lesser interest rate when compared to your existing lender’s.
  • Be calculative while planning to refinance. It’s not mandatory that refinance will always reap benefits to you and hence, you need to meticulously calculate the amount you will save while applying for refinancing. Different banks have different exit policies and penalties; some might go up to 4% of loan amount, thus, calculate the amount and then go ahead with refinancing.

Advantages of Refinancing / Reasons for Refinancing :

  • It lowers the monthly payment as you opt for a lower interest rate.
  • It makes it easy for you to plan and pay off your loan if you refinance your new home loan from floating to fixed interest rate, as you have a planned EMI.
  • Consolidation of debts for, there will be a reduced EMI.
  • Change of maturity of the loan. Refinance is the best only if you opt for a lower tenure at a lower interest rate.

Ask yourself before you go for Refinancing : 

Before you contact a refinance lender, make sure refinancing makes sense for you. Ask yourself these questions:

  • Is there a prepayment penalty on my current mortgage?
    Though the RBI had removed the pre-payment charges, the banks and NBFCs still ask for a penalty if the loan amount crosses certain limit. So, find out if you will be charged a “prepayment penalty.” The amount varies, but it can add up to several months’ worth of interest payments. Ask your lender.
  • What are the costs of the new mortgage?
    Lenders almost always charge fees for taking out a new loan. These can add up depending on the size of the loan. The charges could include application fees, insurance fees, plus title search, insurance and legal costs. However, many of these fees are negotiable and are different from lender to lender. Make sure to shop around and compare all associated costs and fees of your refinance.
  • Will my tax savings be reduced?
    If you claim mortgage interest on your tax return, refinancing to a lower rate will mean that you’ll have less mortgage interest to deduct. That means you might have to check with your tax adviser to see if your overall savings will be increased if you refinance.

Our role: Loanyantra is a complete solution guide to the home loans existing in India. We are the first real-time loan monitoring system that work dynamically as the market changes. Our continuous monitoring and market analysis always keep you posted on the latest development and changes in the home loan market and your loan status. Apart from loan management, we work on refinancing and balance transfer as well. Our sole objective is to make sure that all the customers of Loanyantra are able to close their loan easier and faster.  

Know more on how to add a co-borrower while you refinance your home.

How to add a co-borrower when you refinance a home?

Know more about cost of switching home loan from one lender to another

Cost of switching home loans to new lenders?

 

Applying for Home Loan or Balance Transfer as an NRI / OCI/ PIO

Applying for Home Loan or Balance Transfer as an NRI / OCI/ PIO

Most of the times, its a dream for NRI to buy a property in his/her home town or clear existing home loan before they return India. We come across NRI/OCI/PIO buying property in India very frequently. There are a lot of doubts which seem to be repeated by most clients.

This blog would give a insight of the process so that one can avoid errors and rework.

Process for Non Residents Indian / Person of Indian origin PIO or Overseas Citizen of India  OCI for Home loan application.


NRI OCI PIO Home Loans

HOW TO APPLY ? 


First Step is to Decide the Power of Attorney (POA) Holder

The first step for any NRI/OCI/PIO is to decide who would be the POA holder. He/she has to be a blood relation residing in India preferably in a Metro or Mini Metro like Bangalore,Hyderabad, Mumbai or Mysore, Pune.

Most of the banks ask for a Co-applicant. Your blood relative in India that is your parents/spouse can be a co applicant. You also need to convey the property ownership details .

In case you are buying in joint name i.e either your spouse / parents he /she would have to be on the loan as a co applicant.

Please note the POA holder is the person who would be called in case you delay/ default on our loan.

Power of Attorney(POA)

The most crucial document you need to execute is the POA in the format of Bank that you are applying for the home loan. Each Bank has its own format for the Power of Attorney.

Do not execute a generic general power of attorney as most banks refuse to accept the same for the application. Once you have the power of attorney format of the bank that you wish to avail home loan from since you would be executing the POA outside India you need to visit the Indian Embassy and complete the process.

In case your co applicant is an NRI you would need to execute POA for him/her also. Both POAs can be given to the same relative in India.

Please get the Power of Attorney checked from your banker before notarizing it from the embassy. Any errors can be rectified.

Kindly note that the POA attracts a fee in the embassy as well as here in India. In India you need to affix a Rs 500 stamp paper and get the documents notarized.

Kindly note in case there are any errors / gaps in the POA you waste a lot of time, energy and money because the entire exercise has to be repeated.

For Property Registration

The power of attorney you have executed for the bank can also be used for the registration of the property document. However you need to get the same checked from the developer from whom you are buying property.

All the income and personal documents as per the list have to be self attested by you (signed by you/POA holder) when you despatch the same to India.

Kindly also provide your overseas address proof which can be your employer’s letter in original.

You need to provide following documents attested by Indian Embassy : PAN CARD COPY, PASSPORT COPY and Overseas Residence proof

WHAT TO SUBMIT ?

List of Documents for NRI

  • Photo of Applicant and co-applicant
  • Latest 4 months salary slip
  • Appointment letter
  • Increment letter with salary breakup
  • Address proof
  • Previous work experience letter
  • Pan card copy & Passport copy
  • Processing fees cheque from NRE account
  • Co-applicant photo ID proof and sign Proof ( Pan Card ,Passport, Driving License copy)
  • Employment contract (English copy if the contract is not in English, attested by the Embassy/Employer).
  • Latest work permit.
  • Details of previous employment.
  • Identity card issued by current employer.
  • Bank Account Statement For Salary & Saving a/c (six months).NRI,NRO A/C
  • Pages with visa stamp on the passport.
  • Power of attorney For Bank Format
  • Pan Card Copy, Address proof, Photo for POA holder
  • Detailed credit report from Equifax / Experian

Credit Report

A credit report is a mandatory document for NRI/OCI/PIO US/UK/European countries, Australia, New Zealand and South Africa.

The credit report is not required for professionals working in the Middle East

Please download a detailed credit report which would clearly state your credit score. Most of the times you would have to pay fee to download the credit report. the credit reports available free of cost do not provide detailed credit history and might not provide the score.

WHERE TO PROCESS ?

We would recommend to process with Bank or institution which is providing Online Access to monitor, manage and allow part payments online. Most of the banks provide online access. So make sure you collect all the required online access details at the end of Loan process. We, at Loanyantra as part of process checklist, make sure our customers get the required online access to your loan process.

WHOM TO APPROACH?

NRI/OCI/PIO Loans if not professionally handled it might be very cumbersome job. It is always good to be ready with all the documents before starting the Home Loan process. In case of additional documents required then it would take extra money to send , extra time it would take to receive and extra efforts by the  Power of Attorney(POA) to submit the documents. We would recommend, use services from a prompt loan professional to process it smoothly. It might come at a cost, but it would really worth the money you pay.

In a hawk’s eye, Loanyantra provides professional service at free of cost. As our process protocol, we first send entire checklist and have a professional video call before we start the process. Once the process starts you get online access on Loanyantra portal which would update the status of the Loan process and it provides a chat facility between you, Loanyantra executive appointed for your process and the Banker. We make over all experience a cake walk.

SIX REASONS TO FILE YOUR INCOME TAX RETURN EVEN WHEN YOU DON’T HAVE TAXABLE INCOME

Whether a return should be filed or not depends on your income level. When total income is within the minimum exemption limit, it’s not compulsory to file a tax return. The minimum exemption limit is INR 2.5 lakh if you are less than 60 years old. For those who between 60 and 80 years of age, income is exempt up to INR 3 lakh. And for those who are 80 years and above INR 5 lakh is the exemption.

It may come as a surprise that return filing may be mandatory or beneficial in some circumstances where you do not have taxable income. Let’s understand in detail.

YOU OWN FOREIGN ASSETS OR FOREIGN BANK ACCOUNTS:

Return filing is mandatory if you are resident as per income tax act and own foreign assets Or where you have financial interest in an entity located outside India or have a foreign bank account. This applies even though you have less than taxable income or no income at all. Non-reporting of foreign assets has attracted a lot of attention from the tax department. Penal provisions apply if your status is resident and you do not report them. You must file a return and report all your foreign holdings.

SIX REASONS TO FILE YOUR INCOME TAX RETURN EVEN WHEN YOU DON'T HAVE TAXABLE INCOME


REASON – 1: WHEN YOU BUY/SELL SHARES:

Sale purchase of equity shares result in capital gains. Many a times retired individuals or housewives trade in equity shares but do not report their gains or losses. Not that it is mandatory to do so when your total income is below exemption limit. But if you have short term capital losses, you can adjust them against capital gains. And in case losses are not fully adjusted they can be carried forward for 8 years and adjusted against capital gains in future. These losses can be carried forward by submitting your tax return for the year to which they belong.

REASON – 2: WHEN YOU ARE SEEKING A REFUND:

The only way to claim a refund of taxes is by filing an income tax return. This applies to NRIs who have less than taxable income but is subject to TDS on rent payments. Or where, you could not submit Form 15G/Form 15H timely and TDS were deducted. Tax is already deposited by way of TDS, and the deductor cannot refund this TDS to you. It can only be claimed by filing a tax return. All returns seeking a refund must compulsorily be filed online.

REASON – 3: CLAIM DEDUCTIONS VIA RETURN:

We know that the minimum exemption limit is INR 2.5 lakh. But is this limit before or after allowing deductions? If you are claiming any deductions under section 80, those must be claimed through a tax return. So, INR 2.5 lakh exemption is the gross income level. If your income before deductions is more than this limit, you should file a tax return and claim deductions in the return. This applies even if there is no tax payable.

REASON – 4: REPORT EXEMPT INCOME:

Sometimes, we earn a large income which is exempt from tax such as commuted pension or tax-free gratuity or long-term capital gains from shares and we do not file a tax return or do not report them.

REASON – 5: ANNUAL INFORMATION REPORT (AIR):

The government tracks investments and expenses of PAN holders via AIR submitted by banks and financial institutions. Explaining the source of a large investment or expense made via exempt income, may be easier when such income is reported in your tax return.

REASON – 6: PLANNING TO APPLY FOR A LOAN OR A VISA:

The most trusted indicator of your earnings is your tax return. Visa authorities’ may ask for copies of your return. Lenders also request for tax return copies as proof of your income capacity. Sometimes, tax returns also have to be submitted for applying for a credit card. So even though, you may have less than taxable income you can benefit by filing your returns regularly.

Disclaimer: These are few of the important reasons to file your income tax return even when you don’t have taxable income. Expert advice and user discretion is recommended prior to application of the contents of this document to specific situations.

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Know-how, Before You Close Your Home Loan

One of the best days in life for any home loan payer is the day when you have to close your home loan. The loanyantra.com customer can experience this day, much before the estimated time line, as loanyantra manages the loan and helps in the process of closing the home loan earlier.

The very usual reasons to close the home loanclosing the home loan

a) Either you pay off prematurely or,

b) Your loan might naturally reach the end of the tenure.

However may be the case, take note of these points before closing the home loan.

  1. No Due Certificate (NDC) – The bank will issue a loan closure letter or NDC stating that all dues have been repaid and there is no outstanding amount in your name. Check and re-check all your details.
  2. Original Documents – After you obtain NDC, take back all the original documents you had submitted at the time of approval or disbursal. The documents can be the original sale deed, prior title deed, power of attorney, builder-buyer agreement, property cost break-up, possession letter, payment receipts, cancelled cheques, tripartite agreement, encumbrance certificate, land and building tax receipts.
  3. Home Lien – Get the home lien removed, if any. You need to submit the bank’s NDC to the local registrar to get the lien removed.
  4.  Inform CIBIL – Request your bank to inform CIBIL about your successful loan closure. The bank will inform you once they have shared the details with CIBIL and you can check your credit score to confirm.

Note : Take back Post-Dated Cheques (PDCs) you may have, earlier, issued to the bank.

Even after successful loan closure, make sure you have all the details of the loan, including bank statements, NDC and prepayment records, in place, for future use.

 

 

Keep Your Interest Rate In Check With Loan Rate Shield (LRS)

First things first. You might have been wondering exactly what is Loan Rate Shield or LRS. LRS is fast emerging to the greatest thing that ever happened to prospective homeowners who have no clue how to go about the loaning procedure. It is a service offered by LoanYatra.com for all its esteemed clients and you too might want to squeeze in to ensure your chance of a brilliant future.

In this article, we take you on a trip to what lies in the heart and soul of LRS and exactly how you can mould it for your own interest.

What is Loan Rate Shield (LRS)?

Loan Rate Shield (LRS) is one of a kind loan monitoring system that believes in thorough analysis before providing you with the requisite data. If you thought that the algorithm engine of LRS would only monitor your home loan until you reach the point of closure, you couldn’t be more wrong. Loan rate shield is dedicated to provide you with a holistic service and also sends you periodical alerts and recommendations about all the exciting home loan investment opportunities in the market so that you don’t miss out on anything. Loan rate shield stands true to its name and acts as your shield in the most acute of financial crises and helps you get out of the loan loophole by drastically cutting down on the high interest rates.

Loan Rate Shield- Your chance at a better future

Shielding your way to success- Investing in a home loan and signing on the dotted line is one of the most euphoric feelings in the world. However, all that happiness collapses in an instant when you find one of your friends has got a better home loan deal than you at a much lower interest rate. LRS shields you from the horror of it all by scouring the market for the deals that would be optimum to your purposes.

Monitoring your money- When you engage in a home loan with a lender know that they have financial advisors who are monitoring it all from behind the curtain. It is not always possible for a common man to avail the services of an advisor and that’s where LRS comes into the picture. It monitors your home loan with the eyes of a hawk and minutely takes track of your overall cash outflows so that you know exactly where you stand.

Alerting you at every step– There are lenders who would try to attract you with promises of reduced rate of interests but not all of them are genuine. LRS alerts you of all the best home loans in the market and even informs you if you have been paying more EMIs than the requisite amount in the years leading up to the final closure.

Extends a helping hand- Closing your home loan before the ultimate due date is a dream that all of us cherish. Loan rate shield helps you in making that dream a reality.

Provides you with effective recommendations- LRS would pin point the areas on which you need to focus in order to save up more on your EMIs and if you manage to follow the advice diligently, you can bid adieu to your mortgage once and for all.

Love Break-up!!! Because of Savings!!! Read more to know more./ Are you saving to buy a new home?

Naveen and Neha are 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 nice 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 after all 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??

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?

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.

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 in somehting else, where he gets more returns.

Is that the end? No, you can, rather have to, monitor your loan. 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.

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?  😉