How Bangalore mass molestation can impact real estate sector?

Bangalore mass molestation case

Buying a property is not just about purchasing a space surrounded by concrete all around. It is not only the premises of the developed project that matters for residents, but also the peripheries outside the campus. And that’s why it is crucial for residents or prospective buyers to a proper research and assessment of the neighbourhood. But what happened recently in Bangalore has alarmed buyers and investors of real estate.

The Bangalore case

Bangalore was shamed on the New Year’s Eve, when mass hooliganism overtook the streets of MG Road area in Bangalore and women were molested. A large number of inebriated men went berserk and the incident left an indelible mark on the reputation of Bangalore.

Image source: https://irb-344c.kxcdn.com/wp-content/uploads/2017/01/banglore-new-years-eve.jpg
Bangalore mass molestation case

Why is safe neighbourhood important?

Having a safe neighbourhood is crucial for investing in a real estate project. Security of life is a basic human need for survival. However, in real estate sector, it also helps in the growth of market nearby and also helps in the price appreciation of the real estate project.

Market growth

A safer locality translates to greater freedom to walk around and be outdoors. It also attracts more buyers to a real estate project. As a result, the area developers more and there is a significant growth witnessed in the shops, malls and marketplace nearby. This leads to the birth of a vibrant local economy and better living standards.

Greater investment

The development of a locality safe for residents and the local economy also leads to greater interest in the area by the real estate investors. Subsequently, developers launch real estate projects in the area, leading to better development of the place.

Price appreciation

As a direct consequence of the growth of local economy, the area around the real estate project becomes more attractive to other buyers and investors. As a result, the price of the real estate projects you have invested in also soars higher. As a result, the returns on investment in case of a resale are quite higher.

In short, a safer locality creates a ripple effect and leads to better results on all fronts. But the collapse of safety can have deep impact on real estate sector. Cases like the one of mass molestation in Bangalore are some examples.

What can it imply?

Lack of safe neighbourhood in Bangalore can lead to greater challenges for real estate sector, at least around the area where the incident took place. The incident highlights the following issues that can be of concern to the prospective buyers.

Widespread eve teasing

Image source: Rediff (http://im.rediff.com/getahead/2014/dec/09surviving-in-delhi-after-dark.jpg)
Women are still unsafe in India

The mass eve-teasing that was observed on the New Year eve is a clear indication that miscreants roam the city of Bangalore. Moreover, the place was quite crowded and the entire neighbourhood was in the mood of festivity. One can imagine the audacity of the eve-teasers who tried to molest women very much in the public view.

If such rowdies can go on with their vandalism of the ethical codes of the society, then one can wonder the dangers that keep lurking in the dark streets of the city and the crannies of the less posh localities.

CCTV footage

Image source: IBN Live (http://img01.ibnlive.in/ibnlive/uploads/2017/01/BANGALORE-CCTVVIDEO-CLEAN.jpg)
CCTV footage on woman molestation

A number of CCTV footage also surfaced following this incident. One footage showed a girl being surrounded by hoodlums and being harassed. Another one showed a girl standing on a footpath and being lifted by a rowdy, only to be carried away by him. The occurrence of such incidents in a metropolitan city like Bangalore is enough to alarm the residents and incite second thought in the minds of prospective buyers. These show that the incident at MG Road is not the only one that happened in the city in just a short span of days.

Inaction of police

The inaction and incompetence of police forces was stark visible on the New Year’s eve. The ones entrusted with creating and ensuring safety of residents could not maintain law and order even in a posh locality, where they were deployed too. Commissioner of Police, Chandragupta told media that 1,000 personnel were deployed on the stretch between MG Road and Brigade Road. Numerous reports claimed that around 50,000 people had assembled in the area for celebrations. One can understand the gravity of the problem. More personnel could have been deployed. This was not the first time when MG Road was inundated in festive mood during New Year’s eve.

Real estate may take a hit

Less demand for property

Bangalore is a city that never sleeps. People and vehicles keep moving around all the time. Various companies have night shifts and the late working hours in IT industry often compels women to return home late at night. In the wake of such incidents, Bangalore’s reputation can easily get tarnished and professionals, especially ladies, may prefer Bangalore less than other safer job destinations.

As a result, there may be a dip in the number of migrant skilled workforce. Moreover, people may not opt for a property in Bangalore, looking at the grim situation of security for women in the city. As a result, real estate can get negatively impacted because of loss of buyers. This reduced interest of buyers can lead to investors pulling out money from the real estate market. The impact can spiral down to severe consequences too.

Reduced prices

People often pay less to live in areas with higher crime rate. Moreover, price discounts turn futile if people live in constant fear that one day or night, they may fall a prey to heinous offences. The prices in Bangalore, especially unsafe localities, may come down. And even if people buy the properties inspired by reduced prices, the resale of property may not get a good price in return.

Delhi vs. Mumbai– a comparison

It is not a Herculean task to understand the impact of safety and security in a city on real estate sector. Take for example, the case of Mumbai and Delhi. Women generally feel safer in Mumbai than in Delhi. Mumbai has larger workforce of women and presence of more women outside translates to more safety. Moreover, the public transport of Mumbai is far safer than that of Delhi.

If Census is to be believed, the proportion of working women in Mumbai is almost double that of Delhi. There are more women in the public places too and the safety of women in the city ensures higher proportion of migrant population of working ladies in Mumbai. This increases the number of women in the public sphere and hence, it ensures greater women safety. The domino effect has happened since many years and has helped to propel Mumbai, instead of Delhi, as a preferred destination for women to work.

Image source: The Hindu (http://www.thehindu.com/migration_catalog/article10020698.ece/alternates/LANDSCAPE_660/MumDel)
Women’s presence in public helps

As a result, the price of real estate in Mumbai has soared incredibly and has left that of Delhi far behind. The divergent trend in the real estate sector of these two cities is even more surprising when one considers the status of New Delhi as the national capital. Between 2012 and 2014, Mumbai’s real estate has shown price appreciation of 25.27%, while Delhi’s figures have been a dwarf 4.4%. It can be very well observed that along with other factors, the greater safety of women in Mumbai has contributed to the price appreciation and greater interest amongst buyers, investors and developers.

Bangalore has not reached levels of Delhi as of now. It is as safe as Mumbai and you can find womenfolk in the public spaces at night too. The high proportion of womenfolk in Bangalore right now makes the city still safe for ladies. Bangalore is the IT hub and the world’s outsourcing caoital and hence, the entire world keeps watching the happenings at the city. Government is often swift to act on the mishaps that happen in the city. So, buyers can still be helpful of having a safe living in Bangalore. The real estate sector right now is not so dismal as is the case of other cities.

Conclusion

It is wise to have second thoughts before getting a property in Bangalore. If such grave scenarios go unrestrained, then Bangalore can sink deeper into the mirth of lack of a safe neighbourhood. Prices for properties may come down, but lack of security may affect the returns on investment. It is required for all buyers to seriously consider other options before purchasing a property in not so secure localities of Bangalore.

What is Benami Property And Why Is The Indian Government After It?

In Narendra Modi government’s quest to cleanse the country of black money and go after those who hoard wealth accumulated through wrong means, the next thing under attack seems to be the Benami property. Just a few weeks after the controversial demonetization scheme was launched, the recent ‘Mann ki Baat’ program hinted at another surprise much to the displeasure and discomfort of the black money hoarders. Though nobody knows the exact step to be taken by the government regarding benami property, yet our prime Minister Modi has reiterated time and again that he will operationalize a stringent law to deal with benami property. If you are the one owning properties that have been acquired through tax evasion and unsolicited means, you may have a cause to worry. Though for larger good of the society this will be a welcome step.

What is Benami Property?

In technical words, ‘benami property’ is a property acquired through any transaction in which a property is held by, or is transferred to, an individual called ‘benaamidar’ and the consideration of such a property has been provided, or has been paid by another individual. Such properties officially lack the real owner’s name. The property could have been purchased in the name of a family member and the payment might have been done through unaccounted sources. There have been instances in the past where properties have been found to exist in names of those who couldn’t have ever found economic means to own them. By misuse of identification documents, a person with clout can end up violating rational means to acquire sizable properties.

Is this the first policy on benami property?

The upcoming policy, if any, will not be the first step taken by the Modi government towards addressing the issue of benami property. In August 2016, the Parliament had passed the Benami Transactions (Prohibition) Act. The provisions and rules of the Benami Transactions (Prohibition) Act came into force on November 1st, 2016.

Image source: http://www.primepost.in/wp-content/uploads/2016/11/benami-property-act-comes-into-force.jpg
Image source: Primepost

There was a law existing even before this Act. The Benami Transaction (Prohibition) Act, 1988 was renamed as “Prohibition of Benami Property Transactions Act (PBPT), 1988”.

How will it benefit?

No circumvention of tax

Cash-rich investors have always found benami transactions as an ideal gateway to park their untaxed money or wealth acquired through wrongful means. This helped them to circumvent the tax authorities and also reap significant returns on their investments. Politicians, NRIs and businessmen often resort to such practices. However, with the laws on benami property, the practice of buying property without an official name will take a hit, and there will be more transparency in the real estate sector.

Real estate opportunities

Increased buyer confidence

The higher transparency in the real estate sector will help in boosting buyer confidence regarding the purchase pf residential projects. This will bring more cash flow in the real estate sector, and the banks will benefit out of larger number of loans and more legal transactions; thus helping the economy at large.

Minimized title risks

Most often, the properties, like lands and apartments, pass down the generations without any change in the name of the original owner. This Act will help in addressing this issue and the land records will be updated by the heirs of property, leading to increased transparency.

Benefit to buyers

A larger consequence of this step will be the greater availability of land for development. The benami property that was lying non-tradable till now will become available and land distribution can be more equitable. The increase in land availability will bring prices of land down. Moreover, there will be more tax collection and hence, less tax burden on every citizen.

Why is money locked in real estate?

Investment in real estate used to be one of the best ways to hide black money. The holders of black money can easily get caught if income tax officials conduct a raid at their house or place where the black money in the form of cash has been hidden.

Image source: http://bsmedia.business-standard.com/_media/bs/img/article/2016-03/01/full/1456855047-6296.jpg
Image source: business standard

However, investing in property helps the black money hoarders as the cash can be invested to purchase land. Since the cash no longer exists, the raids won’t be able to disclose any black money. Moreover, since the land does not bear the name of the black money hoarder as the official owner, the offender (benamidaar) can roam scot-free. The land is often registered in the name of a relative of this person or in the name of another person not related to the benamidaar. The returns that are reaped on this land anyways go to the offender. Just imagine the returns the black money would have given if it was stacked as cash in a hidden cellar. The returns would be ‘zero’. This way, benami property acts as a medium to hide black money, while also giving higher returns. And this puts the benamidaar in a safe zone.

The punishment

The violation of the PBPT Act can have serious consequences, which have been enlisted as follows.

  • Imprisonment and fine
  • Prohibition of recovery of the benami property from benamidaar by the real owner.
  • Benami property is liable for confiscation by the government, without any payment of compensation.
Image source: http://www.hindustantimes.com/rf/image_size_640x362/HT/p2/2016/11/14/Pictures/home-privacy-concept_c0318708-aa46-11e6-8409-a9cfd08eff29.jpg
Image source: Hindustan Times

The earlier penalty of one to three years can be increased to one to seven years. The fine may extend up to 25% of the fair market value of the benami property.

The highlights

  • The person, found guilty in the offence of a benami transaction, shall face an imprisonment of one to seven years. The fine may extend up to 25% of the fair market value of the benami property.
  • Each proceeding or suit of a benami transaction, which is pending in any court (other than a High Court) or a Tribunal or before any forum on the commencement of the PBPT shall get transferred to the Appellate Tribunal or Adjoining Authority, whoever has the jurisdiction on this matter.
  • If any individual provides false information and furnishes fake documents in the proceedings under this Act, the person shall be punishable with imprisonment of 6 months to 5 years. The fine can extend up to 10% of the fair market value of the benami property.
  • The benami property cannot be transferred by the benamidaar to the beneficial owner or any other individual acting on his behalf.
  • The benami property can be confiscated by the Central Government.
  • The Central Government shall appoint an Appellate Tribunal to listen to appeals against the orders of the Adjudicating Authority under this Act.
  • The Appellate Tribunal shall consists of  a Chairperson, along with at least two members. These two members must consist of a Judicial Member and the other should be an Administrative Member.
  • The Government will appoint a Special Public Prosecutor. The Special Public Prosecutor shall be an advocate in practice for not less than 10 years.
  • The Public Prosecutor under this Act must be an advocate in practice for no less than 7 years.
  • The Central Government shall, in consultation with the Chief Justice of the High Court, designate one or more Courts of Session as Special Court(s) for such areas and cases, for the trial of an offence punishable under this Act.
  • The Special Court shall not take cognizance of any offence punishable under the PBPT Act, except upon a complaint in writing made by the authority; or any officer of the State or Central Government authorized in writing by that Government through a general or special order made in this behalf.
  • The trials should be conducted with expedition and all efforts must be put to conclude the trials within 6 months from the date of filing of the complaint.

The challenges

Corrupt politicians and officials

Any policy requires strict implementation for its success. The strict implementation requires diligence and honesty of the politicians and officials. In case, the officials are corrupt and join hands with the offenders, the policy can go for a toss.

Urban land ceiling

The Urban Land Ceiling Act regulates the amount of land that a person can hold. As a result, several politicians and businessmen register their property in the name of their family members or relatives or even under fake names. At times, to circumvent the land ceiling, these black money hoarders have no official name of the owner while buying a property. This is exactly what creates benami property. The black money hoarders can resort to such practices again. They can get lands registered under the name of their family members or other people and still be able to invest their black money. It has to be seen how government tackles such a situation.

Image source: https://www.telegraphindia.com/1150803/images/03bus-pf.jpg
Image source: The telegraph

Misuse of PAN cards

The offenders can resort to misuse of PAN cards. Who knows that fake PAN cards may be obtained for a single person, so that the offender can buy property using bank accounts that are registered with the fake PAN cards. This will lead to challenges for the government as it will find it difficult to keep track of the offenders.

Digitisation of land records

Digitisation of land records for transparency purpose may also face challenges with respect to technical capacity of the concerned institutions and the efficacy of officials. The time required for digitisation can drain away government’s resources and can lead to budget problems too.

Conclusion

The government is taking commendable measures to address the issue of corruption. The PBPT will help in curbing the menace of benami property. The law has to be enforced with stringent implementation and the empowered authority will have to be quick and strict in its action. Read more about benami property bill

What if E-Property Passbook Becomes a Reality?

A piece of content doing rounds of social media these days is on the hot topic of E-Property PassBook (EPPB). In lieu of the slew of measures that Modi government has undertaken to curb black money, there are widespread speculations that Modi government may soon come out with EPPB to tackle the menace of unregistered property. Whether this speculation that is rife on social media will ever come true or not, is something only time will tell. But in case it does, do you know the consequences of the step? If not, let us help you understand.

What is EPPB?

According to the measures supposed to be taken with respect to EPPB, the government will not allow the registration of any kind of property unless it exists in the E-Property Passbook. Each citizen of India will have to submit his/her ownership details of his/her property wef April 1st, 2017. The details have to be shared at the Deputy Clerk’s Office. The agents will be required to verify the veracity of the property, and if deemed fine, the details of the property will be entered in the EPPB.

The duration

This process will continue from April 1st, 2017 till March 31st, 2018. And here comes the real twist. All those properties that are not listed in the EPPB after March 31st, 2018, will directly go under the possession of the Government of India. This is exactly how Government of India is trying to tackle corruption in real estate. Read more on our website about the predicted impact of Demonetisation on black money in the real estate sector.

How will it help?

There are a lot of corrupt people who buy and sell property, but don’t let the government ever get to know of it. Some people invest their black money in buying land or real estate projects. But with E-Property Passbook, the following benefits will be conferred over the country.

Knowledge of person’s financial strength

If a person buys a property, it will have to be shown in EPPB. This way, the government will keep getting information on the transactions a person has done. In case a large transaction has been done, it can sound an alarm with the IT department, which can investigate the source of the money invested.

E-Property Passbook Reality consequences, Indian Real Estate, corruption
E-Property Passbook Reality

*Photo credits – http://blogs.economictimes.indiatimes.com/

Land Redistribution

A large part of the unclaimed lands will come directly under the possession of the government and that will help to redistribute the land, so that the landless people can hope to get their dream houses built.

Better Transparency

There will be a lot of transparency in the process of buying and selling properties. It is being said that EPPB will be linked to PAN and Aadhar. This will ensure that people are not able to evade tax once they sell off their property.

National Development

The revenue earned by the Government of India through increased tax money will be fed back into the loop of national development. The money can be used for funding national projects, leading to development of the nation.

Blow to Land Mafia

Since a large portion of emptied land will be released by the government, and the fresh purchases of land will be dictated by E-Property Passbook, the step can give a death blow to land mafias. Due to demonetization, a large part of the black money accumulated by the land mafias is believed to have been turned to waste paper. This has given a blow to the practice of taking some part of the payment for real estate project in the form of unaccounted cash. As a result, the prices of the properties and the real estate in general are supposed to come down soon.

The news about the EPPB may b just no more than a spam and fake news. But it can have positive implications if announced. However, digitization of property is not something new to India. Since 2015, New Delhi is already benefiting out of UPIC (Unique Property Identification Card) scheme.

Conclusion

There has been no confirmed report from government about EPPB. Though it may seem possible for the government to announce a measure to curb black money in real estate, yet the demonetization scheme has already dealt a big blow to corrupt real estate houses. It is wise to take this piece of news about E-Property Passbook with a pinch of salt.

But it is indeed worthy to keep a close look at the real estate market, which is certainly riddled with the issue of black money and may receive a cure for this issue very soon from the government. To read more about E-Property Passbook, you can check the Indian CEO website.

Types of home loans

Home loan types

Buying a home is a dream for everyone. It is not a rarity to watch a long queue of people at banks with the lowest interest rates asking for details on best home loan interest rates. But before you switch on your home loan calculator, you need to know about the types of home loans available.

What is a home loan?

Home loan is basically money borrowed from a bank or other lenders for financing home purchase. The money is borrowed on a certain rate of interest and the loan repayment is the final sum of principal borrowed and the interest calculated on that principal amount.

Mortgage loans

Mortgage is a loan that you get from a mortgage lender or mortgage companies for which property or real estate is kept as collateral. The borrower receives cash upfront and then makes payments over a fixed tenure until the entire loan repayment is done.

Loan against property (LAP)

As the name implies, a loan against property is the money disbursed against the mortgage of a land or property. The loan amount provided is usually a percentage of the property value and the percentage is usually 40% to 60%.

Reverse Mortgage loan

It is also called home equity conversion mortgage (HECM). This is meant for older homeowners– above 62 years of age– and requires no monthly mortgage payments. However, borrowers are still responsible for property taxes and homeowner’s insurance.

Home purchase loans

The first category is the home purchase loans. These are also known as housing loan. They are provided for home finance, i.e. for buying houses or apartments. These loans generally cover 80-85% of the market value of the property. Type of interest rate varies between floating rate, fixed rate and hybrid rate of interest. The tenure of the loan can be chosen based on the borrower’s convenience.

See Also : Where to buy your home in 2017

Home construction loans

Home construction loans are provided for construction of a house. This can be availed by people who have purchased plots. The plot of land on which construction is to be done must have been bought within a year. Only then, the cost of the land can be included as a component for calculating the total price of the house. If the plot was purchased more than a year ago, then the clause is not applicable.

Land loans

Land loans are available for purchase of land or empty plots for a residential activity like construction or investment. However, if you want to buy a piece of land for agriculture, this loan is not for you. The loan to value (LTV) of land loans is around 70% as compared to 80-85% for housing loans.

Bridge home loans

You may have come across a situation where you would have liked to invest in a property but have not been in favor of taking a home loan, because you found your current property can partially finance it. Bridge home loans are useful for people who sell their existing property and use the funds to upgrade their other home or buy a new property.

A borrower need not wait till the final sale execution of the existing property. Bridge home loans can be taken for buying a new home and repay it once the current property is sold.

Home improvement loans

In case you are willing to do a renovation work for your existing home, a loan can be taken from bank. Such loans are extended towards all construction and renovation work. The ‘work’ includes extending a room, flooring work, painting, all kinds of plumbing, making a new balcony, exterior elevation works among a few others.

Home extension loans

In case you want to extend your current house, like altering your rooms, creating a floor, a larger balcony or anything else related to extending your home, can be covered under home extension loan.

Stamp duty loan

While buying a house, you are supposed to pay stamp duty and registration charges. Before signing the loan agreement, you can include the stamp duty and the registration charges to the loan amount, provided the property value is up to INR 10,00,000/-. RBI has issued a circular on inclusion of stamp duty and registration charges in the loan amount. This way the denominator is loan to value (LTV) increases and hence, loan amount can increase too. LTV is the ratio of the amount you want to borrow to the property value. Generally, stamp duty and registration charges account for 15% of the cost of the house. The other documentation charges can be added too.

However, it is always better to pay the stamp duty, registration charges and other documentation charges without loan. Why to pay an interest on these amounts, after all?

Home conversion loan

Home conversion loans come handy when you have already taken a housing loan from a bank or a NBFC. Home conversion loan can be availed if you have a house purchased with home loan and you want to move to another home with a few bucks in hand.

NRI home loans

These loans are exclusively for NRIs who want to buy property in India. This type of loan involves a lot more paperwork.

What is a balance transfer?

Balance transfer happens when the entire unpaid principal amount of the loan is transferred to another bank for a lower interest rate. The previous bank gets the entire unpaid money and you need to pay EMIs to the new bank. If you have a good credit score and if you have been paying your EMIs well in time, then you should not face any hassles as almost every bank in India has the facility of balance transfer.

Read more on types of home loans

There are various types of home loans that can be availed based on the kind of investment you are making. The EMI can be calculated quite easy using calculators and excel sheets. Check which category your loan falls in before applying for home loan.

Home loans- what, why and how

Are you planning to buy a home? Are you looking out for property hotspots to invest in real estate? And are you worried about how to get enough money for investment? If the answer to all these questions is a Yes, then you must consider taking a home loan. However, ‘home loan’ is a vast concept and there are many nitty-gritty that you need to be aware of before approaching a loan officer for money lending.

What is a home loan?

Home loan is basically money borrowed from a bank or other lenders for financing home purchase. The money is borrowed on a certain rate of interest and the loan repayment is the final sum of principal borrowed and the interest calculated on that principal amount.

How much do banks lend?

A bank will never finance the home 100%. Most banks follow the scheme of 20:80. This implies the bank finances 80% of the loan amount, while you need to have 20% as down payment for home finance. So, before you approach a bank for best home loan interest rates or banks with the lowest interest rates, you need to have enough money to finance 20-25% of the property value.

Types of interest rates

Here is the catch that you always need to pay attention to. The world has always debated over the advantage of floating rate over fixed rate of interest. Basically, it all depends on how closely you watch the market and how wisely you assess it. Let’s look in detail as to what is each of these types.

Fixed rate

This one is as easy to understand as its name. Fixed rate is an interest rate that you promise to pay on a liability, like mortgage or loan. This rate of interest remains fixed for the agreed period of time. This type of home loan interest rate is best for those who don’t want to worry over market trends and want to play safe.

Floating rate

In floating rate of interest, the rate keeps on changing as per the market scenario. The rate fluctuates as per the benchmark interest rate. If the market is on an upward trend, the benchmark goes up and that makes the loan costlier. However, if there is a slump and the benchmark rate goes down, you will end up paying less than your counterpart who opted for fixed rate of interest. Adjustable rate mortgages have rates that adjust based on preset margins and mortgage index like COFI or monthly treasure average (MTA).

Interest rate risk

Interest rate risk is a term related to floating rate of interest and comes with a variable interest rate. On the loan repayment calculator, the rate payable on debt obligation varies in accordance to benchmark interest rate or index. Make a note that floating rate comes with a low introductory rate to make it appealing.

Hybrid home loan

There are schemes by a few banks that provide loans combining the features of both the types of interest rate. The hybrid loans have fixed rate for a certain period of time and floating rate for the remainder of time period, for example floating rate for first half of the tenure and fixed rate for the remainder of the tenure. Some banks offer a part of loan on floating rate and the rest on fixed rate, for instance 70% of loan on floating rate and 30% of fixed rate. You may need to sign two different agreements for both types of loans.

A third kind of hybrid loan exists. In this option, the bank lets you know the reference rate, i.e. benchmark rate at the beginning of every financial year and you can decide which type of interest rate to go for.

Calculator

The EMI can be calculated quite easy using calculators and excel sheets. Let’s assume we have borrowed a sum of INR1, 00,000/- for 2 years at fixed rate of 12%. The formula for EMI is EMI = [P x R x (1+R)^N]/[(1+R)^N-1], where P is principal, R is interest rate per month and N is no. of monthly installments.

You will end up paying EMI of INR 4,707. But in case, you opt for floating rate at 10% and the rate changes to 12% in the next year, then you will end up paying EMI of INR4,614/- for first year and INR4,707/- in the next year.

Loan insurance

Before you check how to apply for a home loan online, you need to know about home loan insurance. Get an insurance equivalent to your home loan amount. In case of any untoward incident that affects you, your family will not have to worry about loan repayment as the insurance money will be of help.

Tax exemptions

Getting a home loan has more advantages. Find below the details of exemptions allowed in our Constitution.

Quantum of deduction under Section 24

INR 2,00,000/- for self occupied property and no limit on non-self occupied property

Quantum of deduction under Section 80C

INR 1,50,000/- for self occupied property and INR 1,50,000/- on non-self occupied property

Quantum of deduction under Section 80EE

INR 50,000/- for self occupied property and INR 50,000/- on non-self occupied property

But in case you sell the home shortly, the tax that you had saved on interest payment will be added to your income from sale of property and will be taxed.

Credit score

CIBIL score from Credit Information Bureau of India Ltd. Is very important as banks check your credibility based on credit information report. For guaranteed loans and fast cash loans, the score must be above 750. Poor credit loans and loans on bad credit are not welcome by any bank. Check CIBIL score before filling home loan agreement.

How to apply for home loan?

Get all the documents ready and reach out to the nearest bank or the banks with best interest plans. The documents that you will need are as follows.

  • A duly signed application form, with photographs affixed.
  • Cheque for processing fee.
  • An identity proof, residence proof (like passport, ration card, utility bills etc.
  • Latest 3 salary slips or bank statements of 3-6 months or passbook (3-6 months) or current salary certificate.
  • Your information on tax paid, like latest ITR form or latest Form 16 is also required. Carry your employment proof like employment certificate or any legal document establishing your business/profession (for self-employed people) like MOA/Partnership deed.
  • Relevant documents on property.

See Also : Where to buy your home in 2017

Home loans are available in various schemes these days. They come with tax exemptions and other benefits too. Keep a watch on market trends and choose an interest rate wisely. Indian realty Bytes is open to solve your queries on home loans.