Why 2018 Is The Year To Buy Your Dream Home?
The various policy and legal amendments in the real estate sector is helpful to make it more transparent and appealing to buy a dream home.
While 2017, a year of legal amendments in the property sector, 2018 will be the year of reaping the benefits of the amendments. The implementation of GST, RERA and the demonetization drive makes real estate friendly and transparent for buyers. The confusion and lack of clarity were palpable till the end of 2017; the beginning of 2018 promises clarity and a hope for genuine buyers. Increase in transparency and lower home loan interest rates. All this makes 2018 the ideal year to invest in real estate. A good chunk of the earning population invests their money in real estate projects – either for personal use or investment purposes. The buyers who were sitting on the sidelines waiting for the opportune moment to invest are now ready to make their move.
Not only have the rates of interest on home loans reduced, but banks and other housing finance institutions are also now more proactive. The transparency in deals plus ample unsold inventory in the market will enable buyers to invest in ready-to-move-in projects, free of GST. Developers are coming up with interesting and profitable offers in an attempt to sell off unsold inventories. Due to RERA regulations, developers will have to stick to the stipulated time period. The time to buy your dream home is now!
Take care of the following to avoid a hassle-free home buying experience.
Margin money
While the majority of your price on the property comes with home loans. The buyer still needs to invest a certain amount of funds from one’s end for the booking amount. Buyers should invest a monthly amount in lucrative investment schemes. The amount at the end of this investment can come useful as booking amount by homebuyers.
Loan eligibility
As per the guidelines set by Reserve Bank of India and National Housing Bank, banks and other housing finance organizations can not loan more than a certain percentage of the fair market value of the property. This percentage is the loan to value ratio. As per the latest regulation, 90% of the value of the property as a home loan can be availed for a property worth up to 30 lakhs, 80% for a property worth more than 30 lakhs but less than 75 lakhs and 75% for properties valued more than 75 lakhs.
EMIs payable
One thing investors need to remember while taking a home loan of the maximum amount on the basis of your loan to value ratio is: the more amount you pay as a down payment, the smaller is the EMI. In addition to the same, a lesser amount of stress on the monthly financial plan. While granting a home loan, lenders normally postulate that approximately 30% – 40% of the income of the individual will pay the EMI. Another aspect lenders look into is the individual’s remaining years of employment. Home loan takers must make a financial plan for the years to come keeping in mind their retirement age and other expenditures can come up so that other aspects of their life are not disturbed.
Additional money
Other expenditures such as stamp duty and registration charges are not a part of the home loan. The buyers need to invest in these finances by themselves. This will amount to approximately 5% of the cost of the property.
CIBIL Score
Your credit score plays a major role in your financial profile. Financial institutions will rely on your credit score to judge you before lending a loan. Maintaining a score above 700 is necessary to ensure that you receive a loan as per your requirement. The buyer also needs to factor in various expenses that come along with purchasing a house.
With proper planning and knowledge, you can make the process relatively easy. The migration to major cities is increasing exponentially. Therby, investing in real estate is the best and safest method for long-term returns.
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