Get a Best Deal on Home Loan

A house is bought using a home loan, with a certain portion being financed out of own resources of the borrower. There are a number of banks and housing finance companies in the market offering various products. It is advisable for a borrower to note down his concerns and then compare these across the board before taking a final decision on whom to borrow from and how much to borrow.

As a preliminary step, one may prepare a checklist covering these areas. Other areas of concerns may also be added. While discussing with the prospective lenders, this checklist will come in handy to make a good comparison and take a final decision.

Points for your checklist:

Purposes for which the loan is available - purchase of plot, construction, or for both

How and when the disbursement will take place Documents needed

Who can be co-applicant

What is the time taken or sanction, disbursement of loan. Generally, a bank takes 10-15 working days

Maximum loan the bank is ready to disburse

How and when the recovery through EMIs starts

In case of change in interest rate, how an adjustment in EMI will be made for interest reduction or early principal repayment

Method of calculating interest rate - daily or monthly reducing

Is a guarantor required? If yes, who can be a guarantor and documents required from him

Will the loan disbursement be made in phases depending on progress of construction or in one lump sum

Legal verification fee payable

Rate of interest and effective rate of interest. Effective rate of interest should be taken for a comparison

Commitment charges payable Processing charges payable

Procedure for switch over from floating to fixed rate or vice versa. The attendant conditions applicable and corresponding charges payable

In case of purchase of land and construction loan, will the bank sanction separate loans or a composite loan

Calculate Home Loan Emi Amount of EMI

Mode of payment of EMIs

Free or concessional insurance on the loan offered

Prepayment terms these questions constitute a preliminary checklist only. This list is not exhaustive. One may add any number of additional points. This will help in comparing and negotiating with the banks to get a good deal.

[Source: http://www.sooperarticles.com/finance-articles/loans-articles/get-best-deal-home-loan-95336.html?]

NRI Buying Property in India - A Beginners Guide

NRIs are now turning their long held aspirations of owning real estate in India, into reality by buying property in India. NRI Buying property in India is not surprising. India's growth story continues to fascinate the world and NRIs are looking to capitalize by buying property in India. NRI buying property in India is a no brainer as India has continued to give an average of 20% return on investment per annum even as most of the world economies are in recession.

More importantly NRI buying a property in India has become more prevalent as many avenues are being created as well as schemes being fashioned for NRI/PIO/OCIs to bring in maximum investment from abroad.

Below is a quick overview on developments that have led to an increasing interest for Home Loan and inflow of investments from the NRI community worldwide.

All persons residing outside India holding Indian passports and also people of Indian origin have been granted permission by the Reserve Bank of India (RBI) to invest in both residential and commercial properties in India.

The government including RBI and Foreign Exchange Management Act (FEMA) has liberalized the rules and regulations for the NRI buying property in India. Liberalization along with the added advantage of repatriation of the capital invested and even the rental proceeds under the circumstances prescribed by RBI have also encouraged NRI to buy property in India. Capital gains accruing from any sale of property can be remitted out of India after paying capital gains tax. This has encouraged NRI to buy property in India as it has been a big concern within the NRI community on repatriation of funds abroad.

With most world economies facing a slowdown, NRI buying a property in India has had a return on an average of 20% pa and in some pockets like Gurgaon a return of 50-60%pa. India is a safe destination - a brisk economy and a huge population fuelling it.

To an NRI buying a property in India, a base in the homeland also brings with it a sense of security. The number of NRIs who are investing in property for sentimental reasons and for better investment returns is quickly multiplying.

[Source: http://www.sooperarticles.com/real-estate-articles/property-investment-articles/nri-buying-property-india-beginners-guide-1073407.html]

Guide To Buy Resale Residential Property

When you set out to purchase a residential property, you have no other goal but live life in comfort and peace. To ensure this goal is fulfilled, there are some legal procedures that you need to abide by. This article will discuss some steps you need to take to settle all those legal matters and tell you what else you should do before you step into your new home, which is a resale property. So let's begin:

First of all, if you are buying a resale apartment or an old property for sale, transfer the title of ownership as fast as you can. Make sure you become the official owner the moment you have cleared your payment and moved in to your home.

Lawyer

Get a good lawyer because he/she can assist you with a proper guide to legal procedures. He/she can be the right vigilant and tell you if and when the seller is trying to fish out extra money from you for no good reason. Your lawyer will also be able to check whether there are any dues unpaid by the previous owner to the trust or governing authority of the residential property.

A good lawyer will also be able to take care of your home loan-related procedures. Since almost everyone buys homes these days with a loan, this is very important. To obtain your Loan for Home, you need to submit a certificate named NOC or no-objection certificate. This will be issued to you by the aforementioned governing authority only if all the dues have been cleared by the previous owner.

You

If you are moving into a relatively old building where money is being collected for remodeling, you have to participate in the process. That is why, it's best to find it out before buying your residential property that whether or not there is such an imminent possibility. Other than that, you need to check if the utility bills are all cleared by the previous owner of your home. You should not pay bills for things you have not used.

Also, do not forget to check out the state of wiring and plumbing in the apartment. Will you need to re-wire the apartment? Do you have to get the plumbing repaired as well? Is there adequate space for parking your car? If yes, how much will it cost? These are the questions you need to find out answers to.

Broker/Real Estate Agent

In most cases, brokers or real estate agents, whatever you want to call them, are in a hurry to sell an apartment to you. They tend to conceal facts and tell you complete lies in order to sell you a flat and bag their share of the money. Needless to say, you should never encourage such behavior and never put your complete faith in these people. Find out the truth for yourself.

Consider

Weigh every pro and con of a property for sale. Do not make a hasty decision as buying a resale property is a major step. Assess your position in detail. Are you at an advantage or at a disadvantage? Then and only then can you make your decision.

[Source: http://www.sooperarticles.com/real-estate-articles/property-rent-articles/guide-buy-resale-residential-property-1102655.html?]

Going About Refinancing Home Loan

Depending on the condition you are currently in; refinancing home loan could either be an advantageous or a disadvantageous move. A lot depends on your assessing capabilities. Simply put, refinancing is an option which helps you deal with a foreclosure-like situation. If you are unable to pay up you monthly mortgages, losing your house as a result of foreclosure may be the inevitable outcome. In order to avoid losing your property, you can apply for refinancing your loan which extends a lower rate of interest than the previous one. 

They may also provide loans at much more favorable terms as they would be using your home as the collateral. The fresh secured loan will help in settling the balance mortgage amount with ease. Although the settlement seems primarily advantageous, there are several aspects which need to be taken into consideration before deciding on refinancing home loan.

When Can Refinancing Prove Cheaper?

It could seem difficult to judge if refinancing Loan for Home is after all a favorable option. You could compare the appraised value of your home to the mortgage. If the mortgage is less, refinancing home loans may be a good idea when the interest rates are depreciating. You could then refinance for the same period but at a more favorable interest rate. As a result, your monthly installments will go down.

Second, you can also apply for refinancing for a shorter period and lower interest rate. You can save the interest charges and any refinancing fees which might be charged, in both cases. What you will need is a financing calculator. You can easily download one online. The results of the calculations will tell you if refinancing at a lower interest value is actually worth it or not.

Alternatively, you might also choose to refinance the loan balance for the same time period as the original loan but at more favorable interest rates. This could bring down your mortgage amounts. Some amount of discipline will also save you money in the long run as you pay the same amount as you would have for your old mortgage.

Advantages of Refinancing Home Loan

Considering that refinancing has proved to be a favorable option for you, the advantages of refinancing home loan could be listed as below:

* Reduction Of Monthly Mortgage Payments: Refinancing home loan will allow you to land a brand-new loan at reduced and more favorable interest rates. Therefore, your monthly home loan installments can be successfully lowered.

* Transition To Fixed Rate: Refinancing will allow you to make a transition from adjustable mortgage rates to fixed rates which can be truly beneficial.

* Doing Away With PMI: When you refinance your home loan, you can do away with PMI or private mortgage insurance when you have touched 20 percent equity on your property.

* Settling Other Bills: With refinancing, it is easier to settle your current bills. You can settle your outstanding loan balance and can also deal with other outstanding amounts with ease. You can also utilize the money you have saved for other investments.

Therefore, if you go about it correctly, refinancing home loan could be a great help in times of distress.

[Source: http://www.sooperarticles.com/real-estate-articles/mortgage-financing-articles/going-about-refinancing-home-loan-496607.html?]

Personal EMI Calculator

Emi Calculator Home Loan

How Indians can save with income tax benefits of home loan

A home loan is a big responsibility. Typically for middle income people it eats away most of their monthly salary. While my dad had a home loan, it used to consume major portion of his salary. Imagine earning Rs. 20000 and paying 12000 for home loan. I assume most of us will face a similar situation.

On the other hand, a home loan creates an asset (at least technically, though it does not give any regular income). The government wants you to invest and provides lot of income tax deduction and exemptions when investing in a home. Let us try to understand the benefits one can enjoy on a home loan from the tax man.

Income tax benefits of a home loan

It is preferable to understand the tax benefits associated with home loan to benefit from it every financial year. Before beginning with the details of the benefits that can be enjoyed by an applicant while taking a home loan, the repayment of home loan falls into two parts/categories:

Repayment of the principal amount

Repayment of the interest

As the repayment falls into two different categories, the income tax benefits enjoyed by the applicant on the home loan are divided into various sections of the Income Tax Act. Claiming the tax deduction is possible using different sections while filing for an income tax return.

Also read: Documents to check when buying a home

Section 80C: Tax Benefit on Home Loan against Principal Amount

It is possible to claim a tax benefit on home loan for the principal amount by an individual or HUF under Section 80C of the Indian Income Tax Act. The maximum allowable deduction under this section is Rs 1.5 Lakh.

There has been an increase in the permissible amount from Rs. 1 Lakh to Rs. 1.5 Lakh during the 2014 Financial Budget.

The tax deduction under this section calculates or is inclusive of the total amount invested in PPF account, taxes, saving fixed deposits, equity mutual funds, national savings certificate, senior citizens, and saving schemes.

The reduction under section 80C is further available as payment basis, irrespective of the payment year. Furthermore, the registration fee and stamp duty also falls under tax deduction, even if the applicant has not applied for a home loan.

The important point is that the applicant should remember is that the tax benefit is only applicable on the principal amount of the home loan Emi Calculator only after completion of the construction. Therefore, it is important to submit the construction complete certificate to enjoy the tax benefit.

Furthermore, according to this section, the individual will not be eligible for tax deduction for the years during which the construction was in the process.

If an individual or HUF chooses a property that is under construction, because the price is lower than a completed property, one will still have to compensate the service tax levied on the under construction property.

In addition, the Finance Minister changes the rates of the service tax on under-construction properties during the 2013 Budget. Meanwhile, there is no service tax applicable on a completed construction.

However, if the applicant transfers the property for which he or she claims the tax benefit under Section 80C before 5 years from the date of possession of the property, there will be no deduction and tax benefit on the home loan.

The tax deduction claimed on the property for the respective years will become the income of the applicant. The amount from the sale of the property also becomes the income the applicant shall pay the tax on such amount. The tax deduction will depend on the current income tax slab rate as declared by the government.

Must Read: 7 things to do during home loan closure

Service Tax on under construction property

Service tax on an under construction property is the taxable amount collected by builders, real estate developers or any other individual who offers services for selling the unit. However, the payment is due at the time of construction and before the issuance of building complete certificate by the competent authority.

Although many developers and real estate companies have opposed the move, the court ruled the case in the favor of the government.

[Source: http://www.smartmoneygoal.in/blog/income-tax-benefits-of-home-loan/]

Top tips for buying House & Land

Purchasing Vacant Land

If you are planning to build immediately, or at least fairly soon, a construction loan might be the best option. Most lenders demand that building on a construction loan must start within a specified time, usually between one and three years, depending on which lender you use and whether the property will be owner-occupied or investment.

This mortgage type allows you to draw down segments of the loan amount in stages as they are needed – for the land purchase and then for the stages of construction – which saves you paying interest on the entire loan amount when you don’t need to be.

If you don’t plan to build immediately, and you want the loan for the land without any time pressures, a vacant land loan may be the best option.

While regular mortgage types can be used for the purchase of vacant land, most lenders also offer vacant land loans. Most will go up to a 30-year loan term and finance up to 90 per cent of the land’s value, and some go as high as 97 per cent loan-to-valuation ratio (LVR). Lenders’ mortgage insurance (LMI) would still most likely be payable on any LVR higher than 80 or 85 per cent, depending on the lender.

Construction Loans

If you are thinking of building your own home, you will need to be familiar with the ins and outs of construction loans.

Construction loans are not as straightforward as your usual home loans with proper Home Loan Interest Calculation. There are additional decisions to be made about the structure of the loan, additional documentation is required and the funding is released in an entirely different way.

Documentation

In addition to documentation about your finances, income and identity, your application for a construction loan needs to include contracts or tenders for the construction, as well as the plans so that a valuation can be performed.

Further documentation will also be required before the first payment is made from the lender to the builder, including a schedule of the payments to be made (called drawdowns), the builders’ insurance details and the final plans that have been approved by the local council.

Structure

To avoid having to contribute your full deposit and being charged interest on the entire loan amount from the moment the land purchase settles, you can split your mortgage into a land loan and a construction loan. At settlement of the land purchase, you pay LMI on the land loan (if LMI applies) and start being charged interest and making repayments on the balance of the land loan. The interest and repayments on the construction portion then kick in only as each drawdown is processed.

Funding

The drawdown schedule is very important, as you don’t start paying interest on each portion of the loan until it is paid to the builder – you, the lender and the builder need to be satisfied with the schedule.

For the lender to make each payment to the builder, you will need to fill out a drawdown request form from your lender, and submit it to your builder. The builder can then send the lender your form with an invoice for that part of the payment and, after the lender is satisfied that the work has been completed and is up to the standard expected in the valuation, the drawdown can be completed with a payment to the builder.

Any changes to the contract and plans can trigger a reassessment of the loan, so be as sure as you can be that the plans and contracts the lender sees are final, and it is also worth trying to pay for any small amendments from your own pocket, rather than changing the loan and risking a reassessment.

Problems can also arise when other work on the site that isn't completed by the builder needs to be paid for, as some lenders only make the remaining funds of the mortgage available after the completion of construction. While some builders will include subcontractors as part of the main contract, meaning that they can be paid by the builder as stages of work are complete throughout the drawdown schedule, others will not do this. Again, this may make it necessary to pay from your own pocket.

[Source: http://www.dreamfinancial.com.au/blog/top-tips-for-buying-house-land]