The various policy and legal revisions have made the real estate sector (particularly home) more transparent and appealing to both buyers and investors
While 2018 was a year of constitutional amendments in the property sector, 2019 will be the year of reaping the advantages of the revisions. The implementation of GST, RERA and the demonetization drive has made real estate helpful and transparent for clients. The confusion and lack of transparency were evident until the end of 2018; the beginning of 2018 promises transparency and a hope for genuine clients: increased clarity and lower home loan interest rates. All this makes 2019 the perfect year to invest in real estate. A good chunk of the earning society invests their money in real estate projects – either for personal use or investment ideas. The clients who were sitting on the sidelines waiting for the suitable moment to invest are now able to make their transit.
Not only have the rates of interest on house loans reduced, but banks and other housing finance institutions are also more active. The clarity in deals plus ample unsold inventory in the market will let buyers invest in ready-to-move-in projects, unfettered of GST. Developers are coming up with exciting and profitable offers to sell off unsold inventories. Due to RERA regulations, developers will have to stick to the stipulated period. The time to purchase your dream house is now!
While the preponderance of your price on the property can be funded with house loans, the buyer still needs to invest some amount of funds from one’s end for the booking price. Buyers should invest a monthly amount in profitable investment schemes. The value received at the end of this investment can be utilised as booking amount.
As per the guidelines set by Reserve Bank of India and National Housing Bank. Banks and other housing finance companies are not allowed to loan more than a specific percentage of the usual market value of the estate. This percentage is proclaimed the loan to value ratio. As per the latest ordinance, 90% of the value of the property as a home loan can be availed. For a capital worth up to 30 lakhs, 80% for a property meriting more than 30 lakhs but less than 75 lakhs. 75% of estates evaluated more than 75 lakhs.
Primarily investors need to keep in the mind while taking a home loan of the highest amount. Based on your loan to value ratio is: the more value you pay as a down payment, the shorter is the EMI. Hence a lesser mass of stress on the monthly financial layout. While granting a home loan, lenders usually postulate that approximately 30% – 40% of the salary will be used to give the EMI. Another phase lenders look into is the individual’s outstanding years of employment. Home loan takers should make a financial strategy for years to come keeping in mind their retirement age. Other payments can also come up so that different slants of their life are not disrupted.
Other outgo such as stamp duty and registration charges are not incorporated as part of the house loan. The buyers need to fund in these finances by themselves. This will amount to roughly 5% of the cost of the property.
Your credit score performs a significant role in your financial profile. Financial companies will rely on your credit score to assess you before lending a loan. It is recommended to maintain a score over 700. It is done so to make sure that you receive a loan as per your need. The buyer also needs to factor in different expenses that come along with buying a home.
With proper plan and knowledge, the process can be made relatively easy. With the movement to cities is increasing on an exponential percentage, investing in real estate is the best & reliable method for long-term returns.