Home Loan Eligibility For Salaried Individuals

Before applying for a home loan it is important to gauge whether you are eligible for it or not. Approaching a bank for a home loan without meeting the bank’s eligibility criteria may get your loan application rejected which in turn will lower your credit score. The repercussions of having a low credit score makes it harder for you to get your home loan approved. 

Although different banks have different eligibility criteria, some basic Home Loan Eligibility Criteria are mentioned below:

• The borrower must be an Indian resident and an employee of a firm that is either a multinational, public limited, or a private company. Even self-employed individuals such as doctors, C.A’s, etc. are eligible to obtain a housing loan
• The applicant must not be younger than 21 years of age, however, some banks disburse loans to applicants that are over 18 years of age. The maximum age that an applicant can be is 58 in case of salaried individuals and 60 in case of government employees and employees of public limited companies
• One of the most important factors that banks consider before approving your home loan is your salary. Banks usually are allowed to disburse a loan amount up to 65 times the net income of the individual
• If the applicant has other loans he is paying off, the changes of his home loan getting approved diminishes
• Most banks provide a maximum loan that amounts to only 80 – 85% of the value of the property/house. The rest of the amount would have to be provided by the applicant in the form of down payment. The applicant does not pay at least 20% of the value of the property/house as down payment will not be eligible to obtain a housing loan
• The applicant must have been living in the city for at least 2 years before opting to apply for a home loan

Making sure that you are eligible to obtain a home loan before applying for it increases your chances of approval. Getting your home loan rejected will have an adverse effect on your credit score which means that all future loan applications are more likely to get rejected. Use online portals that tell you if you are eligible for a particular loan or not. This is considered as a soft inquiry and will not have any effect on your credit score.

Calculating Stamp Duty Charges for Properties in Karnataka

One should consider the cost of registration and stamp duty while calculating the cost of buying property. Paying stamp duty is a compulsory part of the process that involves buying property. The process for Calculating Stamp Duty and Registration Charges for Karnataka is the same as other regions. The value of the property is first assessed. This is done by considering both the circle rate and the market rate. The circle rate refers to the minimum amount for which the property can be sold in a particular area. This rate is fixed by local regulatory authorities. This is done in order to ensure that both buyers and sellers have a fair idea of the cost of the property in a particular area. The market rate is the rate agreed to by the buyer and the seller. The market rate is always higher than the circle rate. The stamp duty is calculated on the rate that is higher, which is the market rate.
In general, the cost of the stamp duty is borne by the buyer, but there could be cases where the developer can opt to pick up the cost of the same. The stamp duty varies from state to state. But in general, the stamp duty ranges from three to ten per cent of the value of the property. The rate also varies depending on location. The stamp duty charges for a property located in a rural area will not be the same as the charges for a property located in an urban area. The state government specifies the stamp duty rates for each type of location.
In Karnataka, the property registration charge is 1% of the total value of the property. The stamp duty is 5% of the total value of the property. If the property is in a location that is administered either by the BBMP or BMRDA, then a surcharge of either 2% or 3% is added to the cost of the stamp duty. In general, one can assume that the stamp duty charges for properties located in urban areas will be close to 5.6% and the stamp duty charges for properties located in rural areas will be close to 5.65%. Therefore, if you wish to buy property worth Rs.50,00,000 in an urban area, then, your registration charges will be 1% of that which will be, Rs.50,000. Then, since the location selected is urban, the stamp duty charges will work out to 5.6% of Rs.50,00,000. Then, the stamp duty charges will be, Rs.2,80,000. Therefore, the total cost of the property will be the sum of the actual value of the property, the registration charge, and the stamp duty charge. In this case, it will be Rs.53,30,000. Therefore, when you budget for the property, you need to keep this amount in mind in order to be able to fully cover the cost of the property.
It is to be noted that the government will not permit any reduction in the stamp duty charges. Willful default will attract a penalty or even imprisonment.

Home Loan Balance Transfer

Home loan balance transfer, also called refinancing a home loan, is a process where a housing loan is paid off with another loan. People generally transfer the balance of a loan in order to attain lower rates of interest. In case a bank or other financial institutions are unwilling to reduce the interest rates on a particular loan, it can always be refinanced with a help of another bank.

How to transfer a home Loan Balance

• Request your current lender for the documents required to refinance the loan.

• After the lender provides you with a consenting letter with the outstanding loan amount, these documents will have to be provided to the new lender you wish to refinance your loan with.

• The new lender will then transfer the outstanding amount to the old lender.

• The old loan account will now be closed, and all future payments will go towards the loan you have availed with the new lender.

• The old lender will then hand over all the property documents to the new lender, officially completing the refinancing process. 

Top sex reasons to transfer your Home Loan Balance 

• Refinancing your loan may lower you Equated Monthly Instalments (EMI) in some cases.

• As mentioned earlier, the rate of interest payable towards the loan reduces.

• Transferring your home loan balance will increase your credit score as well.

• While refinancing your housing loan, you can negotiate for a shorter tenure with the new lender.

• Often times, while looking out for a new bank to refinance your loan, you can opt for a bank that provides better service than your existing bank.

• Refinancing your home loan in the age of technology has become hassle free. The documentation required is minimal and more often than not, it is a quick procedure.

Why and when must you avail the Home Loan Balance Transfer?

Landmark Reforms like GST and RERA Setting the Tone for the Real Estate Market in India

In 2017, the Indian real estate market witnessed two major reforms – the Goods and Services Tax (GST) and the Real Estate Regulatory Authority (RERA). While GST is estimated to have far-reaching impact on various sectors across the economy, the implications for the real estate sector can be a mixed bag. Over the next few months, GST will unfold the total construction cost. However, the ‘Housing for All by 2020’ project under the Pradhan Mantri Awas Yojana (PMAY) has been excluded from the purview of the GST.

Image Source : accommodationtimes

For under construction properties, the Indian Government has permitted one-third of an apartment cost to be deducted towards the transfer of land. The GST that needs to be paid on the outstanding amount is 18%, which brings the effective GST rate on under-construction properties to 12%. The occupation cost is expected to rise up as the 15% service tax has been replaced with an 18% GST. You may feel that GST works best in a planned economy where the supply chain is structured and value additions are clear. But, the implementation of GST might be the first step towards the country’s economy becoming organized. In the long run, the benefits will trickle down to make his reform better for businesses in India. GST will help logistics industries achieve supply chain efficiencies, leading to consolidation in the warehouse segment and entry of credible industries. The increase in cost of cement will be passed down to to end-users. Real estate companies will also gain from the ITC on raw materials used for construction. As a whole, GST will reduce the compliance cost and improve the convenience of doing business in India. RERA Act was first introduced on 1 May 2017. It was passed to ensure accountability, transparency, and uniformity in real estate prices. This reform has been implemented in 18 states and all union territories, out of which, only 11 states have an active online portal. 10 states are yet to adopt RERA rules. RERA was put in place to increase transparency, address consumer complaints, and help in rejuvenating residential demand.
Real Estate Trends in 2020
Due to the advancement of technologies like data science, artificial intelligence, big data, and so on, the back-end businesses are becoming completely automated. Moreover, data analytics are being adopted increasingly to determine how technology can be used to enhance business operations.

The past two years have not only adopted numerous legislative measures, but also glorified the ‘Affordable Housing’ concept. Initiatives like granting infrastructure status to affordable housing, 100% deduction on profits for affordable housing projects, increasing the habitable area of units, and flexible completion timelines have been taken up.

Delhi NCR and Mumbai have been at the core of retail activity, but lately Bangalore, Hyderabad, Chennai, and Pune have also witnessed robust retailer interest. The southern cities like Bangalore and Chennai are expected to see a strong supply – 30% in the overall retail stock by 2020.

The government’s initiatives to organize the logistics ecosystem has resulted in India ranking 35 out of 160 countries on the 2016 World Bank’s Logistics Performance Index. With the government interested in giving manufacturing the long deserved thrust, it is estimated that demand from the segment will pick up.

The warehousing sector will be dictated by domestic demand and be governed by regional opportunities. The 2 reforms will have a bearing on real estate sector. The risk associated with Indian real estates will reduce due to leading and trustworthy developers. Over the years, this sector will become more organized and attract wider funding avenues.