Good news! Home loans are cheaper now for more buyers

On Thursday, The government of India announced that loans will be cheaper even for marginally bigger homes bought by middle-class groups in a move that should uplift requirement and help kick-start the real estate sector. The rate at which the homes are purchased has attenuated sharply for various reasons; while the buyers wait for the prices to fall; new launches are held back due to the roll-out of rules under Real Estate Regulatory Authority (RERA) in July. It is believed that demonetization has hurt some sales of homes; by the end of September the inventory of apartments is close at Rs. 6 Lakhs. The vice-chairman of Housing Development Finance Corporation, Mr. Keki Mistry mentioned that the low interests for larger homes should boost purchases. However, Mistry also felt that the caveat that those who already own a property would not be eligible to a lower interest should be put away as there are some buyers needing a second home. A proposal to allow those with an income of Rs. 12 LPA to buy or build a house up to 1200 sq ft was approved by the Cabinet on Thursday; earlier the area was restricted to 900 sq ft. Those having an income of up to Rs 18 LPA can avail loans at a lower rate to buy or build a home up to 1,500 sq ft; earlier it was 1100 sq ft. Also covered by the scheme are purchases in the secondary market.

The Managing director of State Bank of India, Mr. PK Gupta there would be an increase in purchase at a time when buying had slowed down, thanks to the new rules. The Vice-chairman and MD of Indiabulls Housing Finance, Mr. Gagan Banga, implied that given how buyers’ favoured slightly larger homes in the Tier-II and Tier-III cities, some prospective buyers had not been able to take advantage of the soft loans. “We expect many of them will not use the opportunity to buy homes now,” Banga noted, adding that the cities such as Pune, Chandigarh, Ludhiana and some pockets in south India could see a boost in sales. Recently, Crisil Research wrote it was unlikely that the demand of residential property would revive in the next 12-18 months.

The analysts at the ratings agency noted: “Though capital values have been under pressure over the past few quarters, a significant chunk of supply in many micro markets remain unaffordable”. At the end of September the total outstanding of mortgages with banks was 12.8% higher than those in September 16. The increase in outstanding between September 2015 and September 2016 was significantly higher, when they had grown 18%. Since demonetisation the pace has moderated averaging 15% monthly in spite of an effective asset price correction of around 5-10% in H12017. However, over the past year the housing finance companies disbursed at a reasonably fast rate.

The government, earlier this year, had permitted buyers with an income of between Rs 6 LPA and Rs 18 LPA to borrow at reduced interest rates. According to the data on the MahaRERA website, nearly 3.5 lakh homes of the registered 6.7 lakh apartments in Mumbai Metropolitan Region have not found buyers yet. Experts note that to make homes affordable, developers are exploring for more affordable locations. “Developers are building smaller apartments because compact two-bedroom homes are selling faster at the moment. The interest subsidy for slightly bigger homes will help clear off inventory from older projects,” implied Rohit Gera, MD, Gera Developments.

November 17, 2017 / by / in , , ,
Advantages of Married Couple Owning a Joint Property

Property buyers these days in India first work out on the best means available for acquiring the immovable assets along with making a well- versed decision. Keeping in mind the most feasible financing options for benefit against taxes or to avoid the brokerage, directly meeting up with the sellers, people now a days are making an even smarter move by registering the property jointly with their spouses.

There are subtle benefits of getting the property registered jointly with your spouse such as elevation of the wife’s status in patriarchal society, impressive bonding, and long term commitments among the spouses. However, only a few are familiar with the financial benefits.

inexpensiveness

While purchasing a property, the budget is decided according to the loan eligibility which further depends upon the income of the buyer. The provision for joint registration here comes to your benefit since you can apply for joint home loan too whose eligibility is increased since two incomes will be considered and the debt burden is shared between two people. Not only the spouse, the joint home loan can also be opted with your parent or siblings

incentives in stamp duty

In order to encourage women to purchase property individually or jointly, government has introduced lower stamp duty for women. Like in Delhi, stamp duty payable by women is 4% as compared to 6% for men. Similarly in Rajasthan, it is 4% but men have to pay 5% the market value.

Claiming Tax Benefits on a Joint Home Loan

Under Section 80C, all the co-borrowers in a joint home loan can claim a tax reduction of 1.50 lacs for principal repayment. Besides, under Section 24, tax reduction up to 2 lacs could also be claimed for interest payment.

As a family you can claim a larger tax benefit for the interest paid on home loan when your property is jointly owned and your interest outgo is more than Rs 2lakhs per annum.

For more information- call an expert

 

November 9, 2017 / by / in