Shaveta Dua and Sonam Lalhotra | Magicbricks | Oct 16, 2017, 14:14 IST
An NRI or a non-resident Indian can easily take a loan from any of the lenders in India for buying a property in the country. Magicbricks tells you how you can avail of a home loan without physically being present in India.
1) A resident Indian as a co-applicant or a co-borrower or a co-owner of the property should be a part of the application that is to be submitted
2) The minimum age of the borrower should be 24 years
3) The borrower needs to submit last three months’ salary slips and bank statement of the salaried account to the lender
1)There are a lot of online platforms available wherein you submit an online application with all the details
2) Such platforms help shortlist the right lender. They also give an option of uploading all the requisite documents online and then manage the entire process on your behalf
3) You will have to issue a power of attorney in the name of your co-applicant, maybe your family member or whoever is going to be the joint owner of your property or co-applicant to the loan in India
4) Additionally, you’ll have to go to the Indian embassy in your country and take the power of attorney format from the lender to whom you’re applying. There is a definitive format which has to be signed in favor of your Indian co-applicant in the application, after which the Indian Embassy will put a seal of approval on it
Switching banks: If you wish to transfer your home loan from one bank to another in the wake of lower interest rates, first check if there is a switching cost with the lender from whom he has taken the loan. If there is no cost of switching then there could be other costs involved such as fee which the new lender will charge. Stamp duty may also be applicable if you are creating a mortgage deed in favour of the new lender.
Be flexible: Taking a loan on fluctuating rate of interest is recommended because fixed rate of interest is generally 50 – 100 basis points more than the flexible rate of interest. They also attract a foreclosure charge whenever you want to switch. Thirdly, the Indian market rates may go down. If you are going to take 9.4 per cent floating rate right now, it is quite likely that in the next 12 months you might be at 8.75 per cent. Instead, if you go for a 10 per cent fixed rate of interest, you will be stuck at 10 per cent even if the market comes down to 8.5 or 8.75 per cent
Pre-payment: If you wish to make a pre-payment then you should tot up the numbers diligently. How much interest cost is getting saved by reduction in tenure? If you feel that is more as compared to the tax benefit which you would have availed by investing this money somewhere else, then you should go for it
What you must know
1) For a salaried customer, the maximum tenure possible is 30 years. For a self-employed person, it is 20 years
2) First get a loan approval for yourself and then decide on the value of the property you want to buy. Your savings should give you enough financial buffer
3) The age of the property does not matter much. If the property is well-maintained and the residual age of the property is at least 12 years, then the bank will definitely fund it
4) The home loan interest rates remain the same for Indian residents as well as NRIs
5) As in the case of Indian residents, if a female is the joint owner of a property, a five basis points reduction in the rate of interest is available under home loan
6) Two NRIs can also opt for a joint home loan in India but only if they are blood relatives and they stay in the same house
Deepak Singh | Magicbricks | Updated: Oct 17, 2017, 15:25 IST
If you have been protracting your decision to buy a house then this festive season is the right time to loosen your purse strings. Although the festive season is considered an auspicious time to buy new things, including real estate, here’s a list of five reasons why prospective home buyers should buy a property now.
Post the real estate slowdown, most developers had been waiting for the re-emergence of positivity back into the market. Buyers’ renewed enthusiasm in the real estate has brought cheers for developers who are now trying to liquidate their existing inventory and recover costs. To make the most of this development, builders are offering a number of discounts and freebies to attract end-users.
Low property prices
Property prices have decreased in the last couple of years. Although prices have remained stagnant for a while now, this is the ideal time to indulge in a hard bargain with the seller to extract the best deal for yourself.
Discounts and freebies galore
Developers are trying to encash the market sentiment and attract buyers by offering them freebies to make the deal look attractive. Munish Mishra, Sales Head, Wave City, says, “There is no better time than the festive season to avail attractive offers. We have tied-up with LG to offer various products such as AC, refrigerator, LED TV, washing machine, oven, etc. to our customers.” But a word of caution, don’t fall for the freebies instantly. Judicially analyse the freebies and try to monetise them as well. You may ask your builder to give you the value of the freebies as discount on the property and if the offered price is reasonable then go ahead and accept the offer. If festive offers from developers include important amenities such as free car parking, then go for them but make sure to bargain hard on the final property price.
Lower home loan rates
Lowering of repo rate by the Reserve Bank of India has led to a decline in the home loan interest rates. In September 2017, banks were providing home loans at an interest rate of 8.35% which is attracting home buyers. Renu S Karnad, Managing Director, HDFC, says “low interest rates help buyers in reducing their borrowed costs. Interest rate is one of the important factors that a home buyer looks at while buying a home. Lower interest rates not only helps in reducing the borrowing costs but also improves their loan eligibility.” She further added, “CLSS under PMAY for interest subsidy of 6.5% for EWS and LIG categories and the extension of the scheme for MIG category (interest subsidy of 4% on Rs 9 lakh loan and 3% on Rs 12 lakh loan) by another 15 months till March 2019 is in itself much more than a festive offer.”
A RERA-compliant project means that the developer can’t take you for a ride anymore. Policies like RERA and GST have instilled a sense of compliance in developers and thus, they are most likely to fulfil their promises now. Sanjay Shenoy, Joint Managing Director, Legacy Global Projects, also expects such policies to bring cheer to the market. He says, “We expect a marked upswing as buyers are now more confident that their interests are being taken care of, with a strong policy in place.” Adding that there are attractive options for buyers this festive season, he explains, “There is a plethora of attractive options for a home buyer today. Differed payment schemes, EMI free investment options and other flexible payment options which reduce the cash flow burden of clients continue to be a big hit.”
By Vandana Ramnani | Sep 14, 2017 03:54 PM IST | Source: Moneycontrol.com
Jaypee home buyers want interim relief from court that they should be allowed to stop paying EMIs until flats are delivered to them as they have no hope yet
More than 100 homebuyers, who have invested their hard-earned money in Jaypee projects, are planning to move court to grant them interim relief to allow them to stop paying their equated monthly instalments (EMIs) until completed residential units are delivered to them.
“Why should we pay EMI for a non-existent property? What is the monetary relief we are getting from the September 11 SC order? We are not asking for suspension of EMIs – we are only asking for deferment of our EMIs until the insolvency resolution professional (IRP) comes up with a resolution plan and preferably possession of the flat is given to us without any interest or penalty to ensure that we are not charged or penalised for the delay in paying EMIs,” says Shilpa Vij, a buyer who bought a house under the subvention scheme in 2011and started paying EMI in 2013 in the hope of getting her house in 2014.
“We want an interim relief. EMIs and monthly rents are draining us and there is no hope yet that we will get a flat,” she says.
Ramakant Rai, Trilegal, who is advising Jaypee home buyers, says that buyers have two options – one, they can write to RBI or the National Housing Bank concerning their problems and two they can file a writ petition either in the High Court or the Supreme Court concerning the issue.
“Many buyers have already sent complaints to RBI and NHB. RBI can act on the basis of these complaints. Also, in case the issue is raised through a writ petition before the Supreme Court, the SC on grounds of equity to protect the interests of home buyers can issue directions to RBI, NHB or directly to banks to allow them to hold EMIs until units are fully developed,” he says.
Homebuyers have alleged that banks did not do their due diligence and disbursed loans even when project approvals were not in place and that banks had given pre-approved loans for the project.
“We have filed RTIs with the Noida Authority and received a response from them that approvals were sanctioned only in 2012 whereas projects have been sold since 2008. The requisite permissions were not in place at the time of the project launch. There was lack of due diligence on the part of banks as they had disbursed loans even when plans were not in place,” says Pramod Rawat, a buyer.
S K Suri, a home buyer, who has filed RTIs with the authorities for information regarding dates of applications made by the developer and final approval of plans, says that he has been given copies of approval letters for seven Jaypee projects, details of the builder filing an application for approval and the date of the authority granting approval.
“Most of the approvals were received only after 2011 whereas most bookings/loan disbursements started way back in 2008,” he says, adding it took him nearly four months to get a response to his RTIs and several rounds to the authority’s office. One response is still awaited.
Most homebuyers have decided against not paying their monthly EMIs for fear that their CIBIL score and future credit history may get impacted. But legal experts say that in case the court intervenes in this matter, it can direct CIBIL to not touch their scores. “Also, buyers are not asking for a refund, they are only asking not to pay EMIs until they get possession of the flats which has been delayed by almost five to eight years,” they say.
Legal experts also say that the September 11 SC order puts a moratorium on all cases against Jaypee. ‘All suits and proceeding instituted against JIL shall in terms of Section 14(1)(a) remain stayed as we have directed the IRP to remain in Management,’ says the order. “Homebuyers can argue that this is a uni-dimensional order as homebuyers cannot file cases against the builder in other courts such as NCDRC or RERA. It should also protect home buyers and allow them to stop paying EMIs and banks should not proceed against buyers until the time homes are delivered,” they say.
“The only possible way that home buyers have recourse to the bank is if the deal has been brokered by the bank’s real estate arm or if the bank has disbursed the full amount rather than construction-linked progress payment. Even in such cases they should issue a notice to the bank first claiming damages before taking any precipitate action such as stopping pre- EMI interest payment,” says CA Harsh Roongta, a fee only investment adviser.
To avoid last-minute hassles, it is always good to plan taxes and loans in advance.
Sep 15, 2017 06:29 PM IST | MoneyControl.com
In order to avoid any last minute hassles while filing your tax returns, you need to ensure that you plan your taxes in advance. If you have the right foresight and plan your loans and taxes properly, then you can surely save a lot of money.
Here are some key details on planning your taxes and loans…
There are a few components which can help in bringing down your tax liability. For this, you need to reallocate your salary. Like medical expenses which are reimbursed by the employer, certain food coupons, house rent allowance, leave and travel allowance etc., should be used efficiently to bring down your tax liability.
Proper use of tax exemption
There are several tax saving options under 80C and 80D. Under 80C, you have options like NSC, PPF, a premium of life insurance, 5-year FD with banks and post office etc. 80D includes premium paid in Mediclaim policies.
Your tax plan and financial plan must go hand in hand
Your tax-saving plan has to be in tandem with your financial plan. Opt for tax-saving options which will contribute to achieving your financial goal.
The loan factor
There are loans which can actually help in reducing your tax burden. So, you should ensure that you make use of this benefit to the maximum.
Exploiting the loan factor:
If you are planning to take a home loan for buying a home, then restructure it in the best possible way as it can give you tax benefits. Under Section 80C, the principal repayment of housing loan can give you a deduction of up to Rs 1,50,000 and under Section 24B, the interest paid on a housing loan can get you a deduction of up to Rs 2,00,000.
Now, if the home loan amount is huge, then it may cross the tax exemption limit. In such cases, you can opt for a joint loan with spouse or parents or siblings. This will help both the individuals to get the tax benefit. It, thus, becomes a useful tax-saving option for the entire family. It should be noted that stamp duty and registration charges that are paid while transferring the property are also eligible for income tax deduction under the Section 80C.
If you take a loan to buy a second home, then to you can get the advantage of tax deductions under Sections 80C and 24B. Under Section 80C, the principal loan amount will be considered and under Section 24B, the interest paid towards the loan will be considered.
Education loan can also be taken for self or for your spouse or children. You can get tax benefits if you take the loan from a scheduled bank or a notified financial company. You can easily claim a deduction for payment of interest. The tax benefits can be enjoyed for a maximum period of eight years or on the term of the loan repayment.
Personal loans also come with the tax advantage. Personal loans which are taken for renovating or repairing home are helpful. Personal loans taken to make down payment of home loan will also give you the advantage of tax benefit.
To sum up…
Thus, there are different ways and means of reducing your tax liability. Loans give you the dual advantage. They take care of your financial needs i.e., buying a home or higher education of your children and at the same time, they also give you the much needed tax-benefit. So, explore all the pros and cons of the various loans and use them to plan your taxes effectively.
By Namrata Dadwal | ET Bureau | Updated: Sep 18, 2017, 03.42 PM IST
A financial emergency can hit any time—a sudden hospitalisation, a natural calamity or even an unexpected celebration at short notice.
While money pundits say you must have an emergency fund equal to six months’ expenses in place, not everyone follows this rule diligently.
So, where do you get cash instantly to tide over a financial disaster? Don’t despair. There are a few ways you can get money in a pinch, depending on how urgently you want the funds. “The key things that will determine where you get the money from are how urgently you want the funds, the tenure of the loan, the interest and how expensive will it be to source the funds,” says Navin Chandani, Chief Business Development Officer, BankBazaar.com
Before you opt to borrow money, be sure that it is really needed. Even then, borrow as little as possible. Remember, it is a loan and you need to ultimately repay it. If you are unable to do it on time, you could end up in a debt trap.
1. BORROW FROM YOUR EMPLOYER
Interest rate : 5-8% ( Could also be interest-free.)
“If you need funds ASAP, consider your workplace first. Many companies extend an advance on salaries,” says financial trainer P.V. Subramanyam. The funds could be equivalent to 1-6 month’s takehome pay and will be deducted from the salary over 3-24 months.
Upside : The loan can be custom-ised to your needs, and you will be able to get the money within three days.
Downside : The loan will be taxable as part of your salary. It will be exempt only if the funds are used for certain medical treatments or if the amount is less than Rs 20,000.
2. CASH WITHDRAWAL ON A CREDIT CARD
Interest rate : 2-3.5 % a month
A credit card can be used to withdraw money from an ATM, the amount being equivalent to 40-80% of your card limit. However, there might be a cap on daily cash withdrawal. Most banks will allow you to over-extend your limit on a caseto-case basis. Be ready to cough up an over-limit fee over and above the usual interest rate on cash advance.
Upside : Instant cash, available anywhere, anytime.
Downside : A transaction fee of 2.5-3%. Interest is levied on the money from the day it is withdrawn until it is fully repaid.
3. TOP-UP LOAN
Interest rate : 9-13%
Already have a home loan? If yes, you can use it to get a top-up loan of up to Rs 50 lakh for a maximum of 20 years or till the balance tenure of your original home. This option works if you have repaid the original home loan for some years as the combined value of the home loan and the top-up cannot exceed 75% of the value of the house.
Upside : You can get a loan quickly, in three days, since the bank has your documents.
Downside : Any default in repayment could cost you big.
4. PERSONAL LOAN
Interest rate 13-24%
One of the quickest options for borrowing money. You can get a loan within 30 minutes to three days, depending on your relationship with the bank. In fact, you might already have a preapproved loan in your name from your bank which will make the process faster.
Upside: Quick disbursement if you borrow from your own bank.
Downside: High interest rate and processing fee of 2-3%. You will also have to pay GST on EMIs. For prepayment, a foreclosure fee of 2.5% of the outstanding amount is charged.
5. LOAN AGAINST PROPERTY
Interest rate 9.5-13%
If you want a large loan and own a house, you could take a loan against property. You can loan Rs 5 lakh to Rs 10 crore, depending on the market value of your house. The loan tenure varies between 2 and 15 years. Both residential and commercial properties can be used as collateral. Banks could to lend you up to 65% of the value of your property. However, the house must be insured. Processing fee is 1.5-2% while prepayment charges are 2-3% of the outstanding.
Upside : Quick disbursement, lower interest charges.
Downside : If portfolio value declines, you will have to put in the differential or pledge more funds/shares.
7. LOAN AGAINST GOLD
Interest rate : 10-17% from banks
14-26% from non-banking financial companies
You can get 60% of the value of your gold and can borrow from Rs 10,000 to Rs 25 lakh. The tenure is usually 6 months or 12 months but you can renew the loan at a nominal charge. While you can repay part of the loan whenever you want, gold you have pledged as collateral is released only after you repay the entire loan.
Upside : You can get funds within a day.
Downside : Gold appraisal charges of Rs 250-2,500. If you are unable to repay loan, you will lose the gold.
Under this new offer ICICI Bank is giving cashbacks of up to 20 per cent subject to a maximum amount of Rs. 10,000 on your credit or debit card spend.
Business | NDTV Profit Team | Updated: September 15, 2017 17:04 IST
ICICI Bank, India’s biggest private-sector lender according to assets, has introduced a cashback offer for its customers who avail a new home loan or transfer their existing home loans to the Mumbai-based lender, ICICI Bank said in a release. Under this new offer ICICI Bank is giving cashbacks of up to 20 per cent (subject to a maximum amount of Rs. 10,000) to its existing credit card or saving account customers on their spends of minimum Rs. 30,000 on their credit or debit card if they avail a new home loan or transfer their existing home loans from other banks/NBFCs. The offer is valid from September 1, 2017 to November 30, 2017.
For example, Mr. Shah, a home buyer is sanctioned home loan in September 2017 with disbursal in October 2017. Also, during the offer period, he spends Rs. 55,000 on his ICICI Bank credit card. He will get cashback of Rs. 10,000 on his credit card. (eligible for 20 per cent cashback, up to Rs. 10,000).
While both the home loan sanction and card spends needs to be within the offer period, the chronology of the two does not matter, ICICI Bank said.
In the absence of credit demand from corporates, retail loans have been the focus for most of the lenders in recent days. Banks are launching new offers every other day to entice more and more retail customers. In the first quarter of the current fiscal, ICICI Bank had reported 19 per cent growth in its retail loans compared to overall loan growth of 3 per cent in the quarter.
As of 2:39 pm, ICICI Bank shares traded 0.51 per cent lower at Rs. 292.20 compared to 0.16 per cent gain in the broader Sensex.
When Pre-Closing your Home Loan it is better to keep these 7 Points to keep hassles at bay and gain complete peace of mind
Contributor Content | Updated:August 24, 2017, 9:16 AM IST | News 18
We Indians are as much eager to pay off our Home Loans as we are to take it when buying their home. The countdown to finish the Home Loan starts as soon as the lock-in period is over. Be it arranging money from one’s own savings, provident fund, getting something from inheritance, the first thought for any such amount is to put it in pre-payments so that the home-loan can be pre-closed as soon as possible.
However, when Pre-Closing your Home Loan it is better to keep these below mentioned 7 Points to keep hassles at bay and gain complete peace of mind:
1. Original Documents and Post-Dated Checks
At the time of obtaining a home loan, you must have submitted some property papers in the bank like the sale deed, mother deed, etc. in Original, so once you have paid off the debt, you need to take back all those Original documents from the bank. The Bank personnel don’t entertain customers later, therefore it’s important to check all the documents on the spot, check they’re in proper shape and no important doc is missing. Same goes for your post-dated checks, if you are pre-closing your home loan in all probability your bank will have extra post-dated checks. Therefore, do not forget to collect them at the time of pre-closure.
2. CIBIL (Credit Information Bureau India Ltd.) score
A High CIBIL Score shows your credit worthiness and that you’re a good borrower, thus helping you obtain subsequent loans. The bank or the lender has a casual approach towards updating your CIBIL score however, take it as your responsibility and make sure that while pre-closing your home loan, the bank or lender informs the CIBIL authorities and updates your CIBIL score.
3. No Objection Certificate (NOC)
NOC is an important certificate that states that is a clearance note from your bank that your property is debt-free and the bank or the lender has no interest in your property. Before you obtain the certificate you can instruct the bank to include a debt-free property clause in the NOC. Additionally, when you obtain the certificate check that it specifically mentions your name, address, home loan account number, date of loan closure, etc.
4. Get a Home Loan Statement
Once you’ve paid the pre-closure amount and made your property debt-free, it is crucial for you to get a home loan statement which is a proof of all the payments made by you with details of dates and amounts.
Many banks register a lien on the property of the borrower in the Registrar’s office and thus it is legally binding and deters the borrower from selling that property. Once you have paid off the loan, ask the bank to get the lien removed from your property. The removal of lien from the records takes up to 10 days.
6. Encumbrance Certificate
Encumbrance certificate is a legal document that reflects all the monetary transactions pertaining to the property and once the loan has been paid off, the same must reflect on the encumbrance certificate. Once the prepayment of the loan is done and the removal of lien (if any), then you need to get yourself a new encumbrance certificate issued from the Registrar’s office.
7. Legal Clearance Certificate
In case you intend to sell the house, getting a Legal Clearance certificate from a lawyer will only increase your credibility along with accelerating the procedure.
Once you have all the above documents in your possession, it is all the more important to get a separate folder and keep these documents safely in it.