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.

Calculator : Where you Get a Clear Picture of What Awaits

Every prospective homeowner looking for a home loan is akin to a blind man trying to make sense of everything with the help of the instinct. However, since the kind of home loan deal you manage to strike with your lender reflects on the kind of future you will have, getting to know the whole picture is always a wise decision. With the calculators at LoanYatra.com, you are gifted with the knowledge of what you will find in the loan sector. You will be able to dodge all surprises and come out stronger.

Don’t let your future boil down to a lifetime of EMI payments with the right calculator for your needs.

Home Loan Eligibility Calculator- The Home Loan Eligibility Calculator helps you know whether you are eligible for a home loan in the first place. Contrary to the popular notion, your lender conducts a thorough background check before trusting you with the money. There’s nothing worse than applying for a home loan and ending up dejected and disappointed just because you didn’t qualify. Save yourself the shock at the outset by using this calculator. You just have to input the requisite information like your gross monthly salary, the name of your company, the location of the property who are seeking a home loan on and the type of loan you desire. You can rest assured that this calculator would keep the legal formalities to a minimum. Since knowledge is power, even if you don’t find yourself eligible, you can plan for a future when you will be.

Balance Transfer Calculator- With the Balance Transfer Calculator, you are given the guarantee that not only would you be able to pay less, but also pay off your loan fast. You would be required to enter your current home loan details like the principal outstanding amount, the interest rate, your existing EMI, the number of EMIs left to be paid and the name of your bank. Once you inform this calculator of your property location, you will be notified of your bank transfer details.

Part Payment Calculator- Whenever you apply for a loan, the subject of EMI payment always persists like a thorn. Not all lenders take the time out to explain the algorithm behind the total amount you would be required to pay and the number of instalments you can distribute so as to lessen the huge financial burden. This is where the Part Payment Calculator comes in. You have to enter the total loan amount, the rate of interest on it, the repayment EMI, the number of months and whether you want to make the payment all at once, on a monthly, quarterly, monthly or half yearly basis. You will be notified of the part payment you need to make to reach closure sooner than you had formerly expected.

Home Loan EMI Calculator- The Home Loan EMI Calculator is one of the most efficient of the bunch as you would find a pictorial representation of the breakup of your total home loan repayment amount. Just input your home loan amount along with the interest rate and loan tenure and this calculator would tell you the monthly EMI value, the interest payable and the total payment you’ll be making. If you’re still trying to grasp what you are in for, the pie chart is there to make the complicated maths a lot easier to understand.

 

Good news with the release of Budget 2016- 17. 50 = 50!!?? Join with Loanyantra for the double benefit !!!

Buying a new home remains as a dream if you have no sufficient funds.  This is the time the heart understands how important every penny is. So, for the first time home buyers,  if they can save 50,000 on the first year, on a 50 lakh home, is it not a boon?. 

So how can you save 50k on the home loan?

Budget 2016-2017 states “First home buyers to get deduction for additional interessavings on tax_loanyantrat of Rs. 50,000 a year for loans upto Rs.35 lakh.” 

So, as we know, the tax exemption can be claimed on the principal and the interest as well. Now we the first home buyers can claim more 50K as exemption. Provided the apartment cost should not exceed 50 lakhs and the loan amount should be not more than 35 lakhs.

How is it more useful with loanyantra.com?

As a loyal customer of loanyantra, you can avail 0.10% discount on the prevailing interest rate. 

For instance, you are a first time home buyer and  seeking for a home loan of 35 lakhs. So, you get the loan at the prevailing interest rate, say 9.5%.

Now let us see the two benefits you can avail for the first year.

Benefit 1: According to the budget  proposal, you can claim extra tax exemption 50k.

Benefit 2 : According to loanyantra, 0.10% discount on the interest rate. Which will save upto 1 Lakh.

Additional Benefit : Loan Management by loanyantra.com till the end of your loan.

So, choosing a home loan is as important as choosing a home. Work clever and plan smart.

Be Prudent And Save Yourself The Exorbitant Amount on Home Loan

Your home loan can potentially be the biggest investment of your entire life. It is rare that a person would have the capital ready and has to invariably resort to home loans to make their dream come true. However, uninformed decision-making coupled with a lackadaisical attitude can end up taking a huge hit on your financial resources not just for a few years but your entire lifetime.

If you are just starting off, it is time to make amends from the very outset. We have come up with six ideas that would help you save up on your home loan.

  • It’s all about calculation : The home loan calculator would not only tell you whether you are eligible for a home loan but would also give you a realistic time frame in which you can expect to pay it off. Once you know the limit, you can go ahead with planning the ways in which you can cut down on your loan payment.
  • Give the honeymoon a miss : Lenders tend to use honeymoon or introductory rates on home loans as a marketing tool. If you come across one such offer, know that once that initial phase of euphoria passes on, you would be required to pay the market price at a higher rate of interest. Do your research and clearly communicate your queries to your lender before signing on the dotted line.
  • Pay quickly and more often : Though there can be many strategies to save up on your money, the moral of the story remains that you should aim to pay it off as quickly as possible. Always go for lower time frames in which to make the payments. Surely you might have to pay more monthly and lead a frugal life, but when you actually find that you have saved a couple of years worth of interest, it’ll be worth it.
  • Focus on the Principal : All of us who have had an unpleasant real life encounter with compound interest know how it feels to pay exorbitant interests every month and still not being able to cross the threshold of the principal sum. Additional repayments with some extra investment might help you cross the principal amount quite early. Paying the interest amount would be smooth sailing henceforth.
  • Don’t neglect the package deals : Ask your lender whether they have any home loan package deals which you can avail. From a free consultation with a financial advisor to special discounts, every little benefit gives you the opportunity to handle the repayment process much better.
  • Go for lower rates at the outset : Compare and analyse the various home loan options available on the market, the right lender can make the difference whether you have to part with a thousand bucks or save up the same amount of money. Even a percentage point would seem trivial when you make a deal but when your loan repayment gets extended to six months more because of it, you would repent hasty choices.

Realty Expectations from the Budget – Interesting Article with True Expectations.

Recently, an article from The Hindu, Property Plus edition, had dragged my attention. From the celebrations of the new year, will slowly go our mind to the goals and targets to be achieved this year. Very soon will be thinking of the our budget too!!! Yes, same with the government as well.  So, what are the things an investor likes to see in the forthcoming Union Budget, with respect to realty, is the article about. Here it goes. (A little cut short) . 

The Union Budget is an eagerly-awaited annual event which Indians follow closely, as the decisions and allocations announced by the Finance Ministry have great pertinence to both individuals and industries. The real estate sector is sensitive to many of policies that are announced both for various industries and individuals. The sector is just emerging from a prolonged and painful slowdown, and is looking for all and any signs of light at the end of the tunnel. This fact makes Union Budget 2016 all the more critical, and the real estate industry has many expectations from it.

Offer financial protection from project delays to home buyers

The Union Budget should pay heed to this pressing need. On purchase into an under-construction property, buyers can only claim tax benefits of Rs. 2 lakh after possession if construction is completed within three years. The benefits reduce to Rs. 30,000 if the builder delays construction beyond this, and they pay higher interest. First-time home buyers purchasing properties for self-use additionally pay rent.

Instead of allowing home buyers tax benefits post-possession, the Union Budget should make a provision that allows these from the time they start paying interest on housing loans.

This will ease their monetary burden considerably and make increase the velocity of home loan disbursements. Similarly, if an under-construction property is purchased from capital gains, its construction must be completed within three years of its sale to avail exemption. There can be delays by developer in such cases too. These deductions should be brought at par and the construction timeline should be extended from the current three years to five years.

Provide more tax saving on housing loan and house insurance premiums

The government should increase the tax deduction limit for housing loans, especially for buyers in metropolitan cities. The current limit of Rs 2 lakh is insignificant given the ticket sizes in cities like Mumbai, where most houses are priced at Rs 1 crore and above.

Also, tax concessions on house insurance premiums could be introduced to encourage end users to insure their homes. Similarly, the tax exemption limit should be increased by about Rs 1 lakh and be auto-set to match inflationary trends in a financial year.

Raise house rent deduction limit

Salaried persons get house rent allowance (HRA) as a component of their total salary, and can therefore claim a deduction. This deduction can be substantial in cases where the salary and its HRA component are higher. However, self-employed persons and those who draw lump sum pays without an HRA component can only claim a maximum deduction of Rs 2,000 a month under Section 80GG. The Budget can and should address this anomaly.

Provide more incentives to boost development and consumption of sustainable real estate

The Budget should provide clear and convincing benefits to buyers of green real estate in the country.

Stakeholders of the residential real estate sector definitely require more encouragement to press the ‘green’ button.

Most home buyers in India are averse to paying an extra premium for such projects, and the low demand means that developers are not sufficiently active in this segment.

The Budget should provide a combination of incentives to boost the development and buyer interest in green real estate in the country as this will pay off in the long run.

Make additional allocation for infrastructure development in peripheral areas of metros

Although the previous Budget prioritised affordable housing, the upcoming Budget should allocate an amount specifically for building infrastructure and improving connectivity in the peripheral areas of cities, especially the metros.

Without this, it will be difficult to provide affordable housing in the cities. Developers entering this segment should be allowed cheaper financing options, thereby also providing a shot in the arm for government’s ‘Housing for All by 2022’ target.

In the whole article, what is interesting for me is Green Real Estate. Hope, the new buildings constructed will be reasonably energy-efficient green buildings. Praying for the government to take proper care.

Best Banks For Home Loan Borrowers

In India, saving and investing money is the option which everyone looks for. Investing money in buying a home is in everyone’s to do list. So no wonder that they go for a detailed analysis about the home loan and the process involved in it to choose the best, the fastest and the safest home loan provider.

                            According to the recent analysis, here are the details of the best banks for home loan borrowers.

  1. SBI  Home Loan capturing 25.5% market share.
  2. HDFC Ltd. with 24.13%
  3. LIC Housing with 15.83%
  4. ICICI Bank with 13.10%
  5. Axis Bank with 6.23%
  6. IDBI Home Loan with 4.67%
  7. PNB Home Loan with 4.22%
  8. Others with 6.32%

These are the points usually borrowers look at while applying for a home loan.

  • Interest rate – Fixed, floating, hybrid
  • Home loan processing speed and the fees involved.
  • Loan qualification
  • Repayment terms

Let us go deep into these topics.

  • Interest rate :

                         

Interest rate offered is the primary factor of comparison. It affects the EMI and total amount payable. For a home loan, it is advised to go for a loan with low interest rates. Also it is recommended to decide whether to go for a fixed or flexible or hybrid loan rate.

Interest rates of various banks are as follows :

  1. SBI                          –             9.50% – 9.75%

  2. HDFC Ltd.             –            9.50% – 9.75%

  3. LIC Housing          –           9.6% – 9.75%

  4. ICICI Bank             –           9.50% – 9.75%

  5. AXIS Bank              –          9.50% – 9.75%

  6. IDBI Bank               –          9.60% – 9.75%

  7. PNB                          –          9.60% – 9.75%


Here is the graph showing the trends of Home loan base interest rate over the five years :

best banks for home loan

  • Home Loan processing speed and the fees involved :

                            

It is a bit difficult process to apply for the home loan. You have to submit a large set of income and property related documents. The timeline for the approval will differ from bank to bank. Some banks are comparatively slower than others in carrying out the procedures, while some banks will approve your loan in simple and less time-consuming way. 

                            You can choose your bank as per your convenience. If you can spend enough time to carry out the procedural work, then you can apply for the slower banks. 

Here is the list of some major banks processing fees :

Bank Processing Fees
ICICI Bank 0.50%  of the loan amount or Rs. 1500/- (Rs. 2000/- for Mumbai, Delhi & Bangalore), whichever is higher + applicable Service Tax & Surcharge
HDFC Ltd 0.5% or 10,000+service tax (12.36%), whichever is higher
SBI Home Loan Upto 1cr- NIL 
Axis Bank Up-to 0.50% of the loan amount subject to minimum of Rs.10,000/-
LIC Housing 0.50% of the loan amount
IDBI Home Loan Upto 0.50%
PNB Home Loans 0.50% of the loan amount
  • Loan Qualification :

                            Each bank, internally, has its own rules to grant the loan.  The different aspects usually lenders look into are the age, the source of income, credit history, employment stability, etc. Hence, each individual chooses the lender according to one’s own preferences.

  • Repayment terms : 

                            Housing finance regulator, National Housing Bank (NHB), has already barred home finance companies from charging any prepayment penalty. Among banks, State Bank of India was the  first to do away with the pre payment fee on both fixed and floating rate loans. Following this, nearly 20 banks withdrew the penalty on floating rate loans. however, most lenders continue to charge the penalty on premature closure of fixed rate loans. Hence, it is another aspect a borrower looks at while taking a loan.

                            Different lenders use different yardsticks for measuring the borrower’s eligibility. Why shouldn’t borrowers consider doing research and compare several competitive feature of home loans offered by different lenders? It is better to have the policies, facts, terms and conditions clarified well in advance before locking in a seemingly ideal home loan with any lender.

How Banks evaluate loan eligibility using Risk Rating Parameters.


All home loan applications are subject to Risk Rating Parameters & Model Table. Total maximum marks a person can get is 168 and the cutoff is set at 96. 

Risk rating parametersThe details of the various ‘Rating Parameters and Risk Rating Model’ are given here. Most of the Banks in India, take the decision, whether the borrower is loan eligible or not, based on number of points the borrower gets  from the below table.

‘Rating Parameters and Risk Rating Model  Table’

Sr.

No.

Variable Score Max Min
1 Borrower Age (in Year)

(a)0–8

(b)Above 18–upto 25

(c)Above 25–upto 40

(d)Above 40–upto 50

(e)More than 50


0
1
4
5
0
5 0
2 Education Qualifications

(a)Doctorate/Post Graduate

(b)Graduate

(c)Diploma

(d)Higher Secondary

(e)Less than Higher Secondar


5
3
2
1
0
5 0
3 Marital Status

(a)Married

(b)Single


12
3
12 3
4 Mobility of Individual-Location

(a)Has not changed location in past 3 years

(b)Changed location once in past 3 years

(c)Changed location more than once in past 3 years


10
3
0
10 0
5 Number of dependents

(a)Zero

(b)One

(c)Two

(d)More than two


8
5
2
0
8 0
6 Number of join applicants

(a)0

(b)1

(c)2 or more


0
5
9
9 0
7 Relationship with bank

(a)All banking done through bank

(b)Good track record of banking with bank

(c)Short term relationship

(d)No existing relationship


14
12
3
-4
14 -4
8 Employer type

(a)Govt./Public sector

(b)MNC

(c)Listed private sector companies

(d)Professional

(e)Unlisted private companies

(f)Own business

(g)Self Employed

(h)Pensioner drawing pension through Bank of Baroda

(i)Pensioner drawing pension from others

(j)Others


9
9
9
4
8
2
2
0
0
0
9 0
9 Designation

(a)Senior Management

(b)Middle Management or Self employed

(c)Junior/Clerical/Pensioner


5
3
0
5 0
10 Stability of Income

(a)Income has been steadily increasing over the last 3

years

(b)Income has been almost the same over the last 3

years

(c)Income has beenunstable over the last 3 years

(d)Income has been steadily decreasing over the last 3years


12
7

0
-5

12 -5
11 Proof of Income of borrower

(a)Income tax returns

(b)Salary slip

(c)Letterhead

(d)No proof


3
3
1
0
3 0
12 Marketability of property (Marketability will increase if

significant developments are happening in nearby areas,also it will depend on the condition of the property etc.)

(a)Very good

(b)Good

(c)Fair

(d)Poor

 

15
10
5
-8

15 -8
13 Housing loan purpose category

(a)Construction (New)

(b)Purchase (Old construction)

(c)Improvement

(d)Foreclosure (for borrowers who borrow in order to

repay a previous housing loan)

(e)Loan given under the rural housing scheme


4
0
8
8
2
8 0
14 Loan to value ratio

(a)Less than 0.5

(b)0.5–0.7

(c)Above 0.7–upto 0.9

(d)More than 0.9


18
12
7
0
18
0
15 Net worth to loan ratio

(a)0–0.5

(b)Above 0.5–upto 0.75

(c)Above 0.75–upto 1.0

(d)Above 1.0–upto 1.5

(e)Above 1.5–upto 2.5

(f)More than 2.5


0
1
2
3
4
5
5 0
16 Net annual income of the borrower (in)

(a)Lessthan 1,00,000

(b)1,00,000–2,00,000

(c)Above 2.00,000-upto 3,50,000

(d)Above 3,50,000–upto 6,00,000

(e)More than 6,00,000


-5
2
4
6
10
10 -5
17 Fixed obligations to income ratio

(a)0-0.3

(b)Above 0.3–upto 0.5

(c)Above 0.5–upto 0.7

(d)More than 0.7


12
8
4
0
12 0
18 Guarantor’s net worth to loan ratio

(a)0–0.5

(b)Above 0.5–upto 1

(c)More than 1


-4
4
8
8 -4
Sum 168 -23


So, 


Did you calculate your Risk Rating Points?


Where do you stand?

Is Your Builder Recommending a Home Loan Lender?

I have been checking for a home loan transfer recently. When I bought a house, I did not go around banks to get a home loan. Guess why? Because my builder, at the time of selling, suggested a bank for the home loan and I followed him. Now with the raise in interest rates, when I looked for a balance transfer to another bank, I ended up with no result after going around all the possible banks.So where does the problem lie? Is it with me because I didn’t confirm the legality of the required documents or because I blindly followed the builder recommended bank? Or is the builder at fault because he made himself comfortable with the one he was tied up with? Both of us looked for our safe side. That’s good. But what happens next is the question. I can look for financial institutions or individual lenders. So for those, like me, who want to get home loan from the banks, it is very much important to research on the banks, on the legality of the property and then decide to buy the property.


It has been found that in many cases, the agents of the banks colluded with the builder to help them to sell their residential units and for this, they keep the prospective home loan buyer in dark about some of the important aspects of the housing project.


So what are the things one should look at while buying a property or I should rather put it as, what are the things a bank looks at while granting a home loan.

  1. Legal search report to ascertain the title of the property.
  2. Technical search report to know the layout plan and the quality of construction.
  3. Land record, occupancy certificate, Title deed, authority or municipality approvals and other similar documents. Note : Please demand these documents from the builder in whose project you are going to invest. After all you are going to invest your hard earned money. you have all the rights to go into the details.

After granting the home loan, the next stage is disbursement. So, if you go with the builder recommended bank, it usually happens that instead of 20% disbursal, the bank might disburse 40%. So again the buyer is at loss. The buyer ends up paying more interest without any reason and necessity. 

In contrary, not all the cases would be the same. The buyer should always keep in mind that in real estate sector there are a very few honest builders. Also one should always check with those home buyers who have earlier bought the flat from your selected property developer. 

What Loanynatra.com does

So, after buying the home with the help of home loan from your preferred bank, what is the next step. Keep watching for the lower interest rates every now and then, find out for the lowest interest rate and that too a suitable home loan for the balance transfer. So it is a cyclic process. Is there any solution that you can keep your hands away from the research and have a sound sleep? Yes. www.loanyantra.com stays with you from the time you decide on buying your new home. It selects a suitable home loan product for you, helps you in knowing the interest rates by giving alerts. Suggests you with the best balance transfer option when needed. So being a loanyantra customer, it saves your time and also saves your money. Use that saved money and time to spend with your family. Plan for a vacation. 

Loanyantra Customer? Know your Benefits.

The major change this century is going through is e-commerce. Isn’t it surprising at the change we are into now! To purchase an item say a saree or a shirt, earlier was the time when we used to go to different shops, explore and then decide and finally buy it if it is of the right price. Now it is all “online.”  For what not and where not, this convenience has been experienced? 

Yes, home loan sector also takes up this change and makes it convenient to the customers. So is the convenience only till choosing the home loan or suggesting a home loan? No, loanyantra.com goes a little beyond this. Let us see till where loanyantra.com makes its customer convenient and above all risk-free.

Two friends conversing..

Friend 1 : Hi bro, finally I took a home loan from a bank after a lot of research.

Friend 2 : Oh cool. But I didn’t research, I got associated with a company. 

Friend 1 : Company? what company?

Friend 2 : It is loanyantra.com… a website which manages your home loan. 

Friend 1 : But what is the need bro..is it really thaaat advantageous?

Friend 2 : Ok let me explain you. Suppose that both of us are in a home loan entered at a same time. Say loan of Rs.45 lakhs with interest of 9.50% with EMI being Rs.41,946 for 240 months. 

Friend 1 : Ok fine. Say the time to be Jan 2015. So our loan goes till 2035.

Friend 2 : Correct if there is a change in interest rate by 0.5%, the EMI to be paid will increase from 240 months to 271 months.

Friend 1 : Yes, ofcourse. What can anybody do with that.We just have to pay.

Friend 2 : No dear, that is what loanyantra.com does. 

Friend 2 (loanyantra.com customer)                             Friend 1

Home loan : Rs. 45  Lakhs                                                              Rs. 45 Lakhs

(Jan 2015)

Interest :       9.50%                                                                           9.50%

EMI :             Rs. 41,946                                                                    Rs. 41,946

Period :         240 months                                                              240 months

* (June 2015) Increase in interest rate by  0.5%

Period :        Remains at 240 months as he                              271 months

(June 2016–  paid 3 EMIs extra as part payment                     Still paying.

June 2027)    as suggested by loanyantra.

June 2027  :  Loan closed                                       

                     Total paid  – 

                     148 EMIs + 

                           36 EMIs                                                                     Still paying

                  (as partpayment suggested by loanyantra)

                   So,184 EMIs * 41,946 =  Rs.77,18,004

                                                

July 2027 : Started investing Rs.42,000                                      Still paying

                   in SIP till 56 months with 

                   average returns of 15%.

                                     

                                          

Jan 2032 :  Received Rs.34,19,126                                                        Still paying

                  (Left these returns untouched for 5 years)

                                     

June 2037 : Final returns received Rs.68,76,830           Loan closed 

                                                                                                     Total paid – 

                                                                                                     271months *41,946 = Rs.1,13,67,366.

Friend 1 : Those are really big figures!!! So, you say, with  loanyantra managing your home loan, you could finish your home loan faster and also could invest in investments of your preferred choice.

Friend 2 : Yes, dear. Remember that the above situation has change in interest rate only for once. In practice, the interest rate change can be many a times. So, each time researching might not be possible. So, why not leave it to the managing company. It costs you really a minimal. 

Second Home – A Relaxing Option?

With increasing affluence on the one hand and a growing realization that there is a need for a relaxed lifestyle at least on weekends, the concept of second homes appears to be gaining popularity. According to the National Council of Applied Economic Re­search, the number of households de­scribed as rich is expected to reach 11 million by 2013 from 3 million in 2003. Meanwhile, the number of mid­dle class aspirers is predicted to leap even more dramatically, from 46 mil­lion to 124 million. The number of HNW Is in India is growing at 20% YoY, second only to Singapore.

This growing opulence of Indians surely makes the second-home mar­ket pretty hot. According to a study conducted by Kapston.com, a Banga­lore-based E-business consulting firm, second-home sales in India in­creased by 50% from 2002 to 2007. The trend slowed a bit in 2008, most­ly due to the economic woes of the US. Then it picked up in mid-2010 to slow down slightly only in the recent time, although now it’s a normal, reg­ulated market where good stuff sells very quickly.


Motive 

Different people invest in a secondproperty with different motives. For some, second home is to have a re­laxing place away from the hustle and bustle of city life, extreme heat and the stresses of work. There are many who’d like to have a second home to spend the rest of their lives in, post-retirement. Others invest in a second home in order to earn rental income.

The primary reason for buying a second home is still lifestyle among Indians; however people have start­ed realizing the investment potential, but the investment consideration comes in a strong second place.


Be Wise 

Even if buying a second home in­volves spending a lot more money be­fore retirement, you will be wise to consider it as an investment. If, for ex­ample, you buy a second home five years before you retire, you will be able to earn money by renting out your property for the next five years, and cover a part of the mort­gage costs.


For NRIs

And it’s not only for Indian dwellers. Non-resident Indians are buying this mid-level housing as well. NRIs can easily attain housing in In­dia because they were born there— but they can also buy even if their parents or grandparents were born there.

Many NRIs choose to go back to where they came from; they have dreams of having India as a possible place to retire, where hired maid ser­vants will run their day-to-day tasks while they relax close to friends and family. The home towns where they grew up always have a certain draw on their heart strings.


A second home is not a bad idea. It can serve the purpose of a change from the routine, once in a while, and leave you refreshed and energized. It can also be a wise investment. In fact people in the higher income brackets even opt for more than one second home as part of their long term in­vestment strategy.