Blogs – Page 31 of 39

East Delhi Residents to Pay Property Tax Online

Posted on April 27, 2021June 9, 2022 by HomeCapital Team

Following an order issued by the accessor and collector’s office, East Delhi Municipal Corporation has decided to completely move to an online mode of property tax collection. The notification issued by the civic body states that filing of returns manually has been discontinued and property tax returns will now be accepted only through online mode.

So, what is property tax and who collects it?

Property tax is a form of tax paid by a homeowner to the local government authority such as a Municipal corporation, Municipal Council or Nagar Panchayat. Revenues from property taxes are used in the development of overall civic infrastructures such as roads, lighting, utilities and other amenities. In India, property taxes are usually levied on all real estate, including buildings (residential or commercial), attached lands and improvements made on the land. The Municipal Corporation of Delhi (MCD), which is the governing body of 8 out of 11 districts in Delhi is responsible for the overall tax collection in Delhi.

How is property tax calculated?

The MCD calculates property tax based on the Unit Area System. This system takes into account the built-up area of the property, the period of construction, the structure of the building or land, location of the property, and type of property. Further, as per this system, properties in Delhi are divided into eight categories based on their valuations. Note that, the rate of property tax and its corresponding unit area value is different for all eight categories.

Apart from that, the MCD area is also divided into three zones which are North Delhi MCD, East Delhi MCD, and South Delhi MCD which impact the property tax rate based on location.

Lastly, while the computation method remains the same as per the Unit Area System, the tax levy itself may vary for different types of properties like residential, commercial or industrial.

MCD Property Tax Computation Method

The formula used for the property tax calculation by the MCD is as follows:

Property Tax = Annual Value * Rate of Tax

Annual Value = Unit area value * unit area * age factor * use factor * structure factor * occupancy factor

Rate of Tax = Tax rates corresponding to the A to H categories of the properties as published by the MCD every year. Where for the financial year 2019-20, the rate varies between 6% to 20% depending on the type of property being taxed.

Explained below are the terms used in the formulae above:

The unit area means the built-up area of the property.
The age factor refers to the age of the property. Which usually ranges from 0.5 to 1. (Note that new properties are taxed higher than old properties).
The use factor is assigned by the MCD based on the usage of the property. Which usually varies from 1 to 10. Note that commercial properties are taxed higher than properties used for residential purposes.
The structure factor refers to how the property is constructed. For instance, RCC constructions are taxed higher than semi-pucca or kucha construction.
The occupancy factor refers to whether the property is rented out or self-occupied. Note that properties that are rented out are taxed higher than the self-occupied ones.

Given below is the MCD’s categorization of major colonies of Delhi for property tax calculations.

Property Category	Main Colonies
A	Anand Niketan, Bhikaji Cama place, Friends Colony, Hudco Place, I.P Estate (Press area), Kalindi Colony, Lodhi Road Institutional Area, Maharani Bagh, Mayfair Garden, Nehru Place, New Friends Colony, Panchshila Park, Pragati Maidan, Press Area, Pushpa Bhawan, Shanti Niketan, Siri Fort Institutional Area, Sunder Nagar, Vasant Vihar, West End
B	Anand Lok, Andrews Ganj, Balaji Estate, Chirag Enclave, Defence Colony, Greater Kailash I II III IV, Green Park, Green Park Extn, Gulmohar Park, Hamdard Nagar, Hauz Khas, IIT Area, INA Colony, JNU Campus Area, Kailash Colony, Kilokri, Lodhi Colony, Nauroji Nagar, Navjivan Vihar, Neeti Bagh, Nehru Enclave, Nizamuddin East, Panchsheel Enclave, Qutab Inst Area, Safdarjang Enclave, Sarvapriya Vihar, Sarvodaya Enclave, South Ext, South Moti Bagh, Sukhdev Vihar, Vasant Enclave,
C	Alaknanda, Anupam Apartment, Aruna Asif Ali Road, Bhawani Kunj, Central Market Lajpat Nagar, Chittaranjan Park, East of Kailash, Escort Area, Firoz Shah Kotla Stadium, Kailash Hills, Kailash Kunj, Lajpat Nagar I II III IV, Malviya Nagar, Munrika Vihar, Nangal Dewat, Panchsheel Vihar, Punjabi Bagh West, Som Vihar, Vasant Kunj
D	Ajanta Park, Anand Vihar, Amar Colony, Anupam Gardens, Bali Nagar, Chander Nagar, Daryaganj, Dwarka, Gagan Vihar, Hudson Line, Janakpuri, Jangpura A, Jangpura Extension, Jasola Vihar, Kalkaji, Karol Bagh, Kirti Nagar, Mayur Vihar, Mohan Coop Industroa; Estate, New Rajinder Nagar, Nanakpura, Okhla Industrial Estate, Old Rajinder Nagar, Pushp Vihar,Raja Garden, Rajouri Garden
E	Cariappa Marg, Chandni Chowk, IAAI Colony, Indian Air Lines Colony, Khirki Ex, Madhuban Enclave, Mahavir Nagar, Pahar Ganj, Pandav Naga, Pant Nagar, Press Colony, Rohini, Shahpur Jat, Tilak Nagar,
F	Anand Parbat, Arjun Nagar, Daya Basti, Dilshad Garden, Freedom Fighter Enclave, Ganesh Nagar, Govindpuri, Hari Nagar, Madhu Vihar, Majnu Ka Tila, Uttam Nagar, Okhla,
G	Ambedkar Nagar Jahangirpuri, Amber Vihar, Badarpur, Bijwasan, Dabri Extension, Dakshinpuri, Dashrathpuri, Hari Nagar Extension, Vivek Vihar Phase I, Tagore Garden
H	Maidan Garhi, Mandi-Chhatarpur, Sultanpur Majra,

Please note that the Delhi Government appoints a Municipal Valuation Committee every third year to review and determine these categorizations based on the unit rate of each colony and other multiplication factors.

Given below are the property tax rates based on the property category and property type.

Property Category	Rate For Residential Property	Rate For Commercial Properties
A	12%	20%
B	12%	20%
C	11%	20%
D	11%	20%
E	11%	20%
F	7%	20%
G	7%	20%
H	7%	20%

How is the rebate on property tax calculated?

The Municipal Corporation of Delhi offers the following rebates to homeowners based on property tax computation:

In case the property tax is paid in a single instalment, in the first quarter of the year, a rebate of 15% on the total tax amount is provided.
A rebate of around 10% of the annual value is provided to DDA/CGHS flats covering space up to 100 sq. meters.
A rebate of 30% is provided for senior citizens, women, and physically challenged on only one property covering space up to 200 sq. meters.
Note that no rebates are given on payments done in quarterly instalments.

Let’s say there is a self-occupied house of 100 square meters, in the category C area, constructed in the year 2019. How much property tax is to be paid?

Unit area value in Category C = ₹ 400 per sq meter

Unit area = 100 sq mtr.

Age factor for 2019 = 1

Use factor = 1

Structure factor = 1.0

Occupancy factor = 1.0

Annual Value = Unit area value * unit area * age factor * use factor * structure factor * occupancy factor

= 400 * 100 * 1 * 1.0 * 1.0 * 1.0 = ₹ 40,000

Property tax = Annual value * Rate of tax

= 40,000 * 12%

= ₹ 4,800

The property tax to be paid is ₹ 4,800.

However, in case the owner is either a female, a senior citizen or a disabled person, a rebate of 30% would be applicable and the tax payable would be ₹ 3,360.

Also, in case the entire property tax for the year is paid in a single instalment, a further rebate of 15% would be available to the taxpayer.

Why is it Beneficial to Buy a Plot in India?

Posted on April 22, 2021July 7, 2023 by HomeCapital Team

The recent pandemic has changed the preferences of homebuyers majorly. With the prevalence of a work-from-home situation, now young professionals are exploring locations outside of the crowded cities, to experience living in standalone houses as opposed to cramped up apartments. It’s no wonder that the demand for plots and plotted developments in cities like Bengaluru, Hyderabad, Chennai, Pune and Gurugram, has seen a momentous rise in recent times as per an Anarock report.

Further, investing in land is seen as lucrative in India because it yields high returns at a relatively lower cost of investment. Also, for homeowners, buying a standalone plot means they now have the flexibility of building a house consistent with their tastes and budget constraints. However, before investing in a plot of land, several important aspects like cost of building, appreciation, financial assistance and income have to be assessed. We are here to help you with that, read to learn more.

Why invest in a plot of land over a ready-made home?

Low investment

The cost of a vacant plot of land is comparatively lower as compared to residential apartments due to the absence of construction costs. Making buying a plot of land a cheap and budget-friendly capital investment for young professionals who are looking for affordable yet spacious housing options.

High returns

Land or plots have been recorded to show a higher rate of return. Moreover, in case you have bought a plot of land in an area with good infrastructure or development scope, its price is sure to appreciate by leaps and bounds shortly. Considering these guaranteed high returns at relatively less costs, it is no wonder that buying a plot is seen as an excellent cost effective investment in India.

High flexibility

Buying a plot of land gives you the flexibility to design a house as per your tastes and space requirements. Also, even if you decide at a later time that you do not want to build a house on the plot, you can always resell it. Both ways it is a win-win scenario for you because the returns on land investment in India tend to be alarmingly high.

Freedom of customization

A home reflects your personality, your lifestyle and everything that makes you unique, which is why only you have the right to decide how it will be built. Buying a plot of land ensures you get to exercise this right in its true sense, where you are not just investing in a plot but a blank canvas that you can paint your dreams on. Moreover, keeping in mind that your preferences keep changing with time, building a home on your plot, gives you the sovereignty to make any aesthetic changes to your home, as and when you please.

It appreciates in every aspect

An apartment’s value increases consistently over time. However, the owner of a plot can get considerable returns on his investment if they plan wisely by constructing multiple floors and renting them. Moreover, a limited supply of land ensures higher competition in the market, leading to increased price points. Purchasing plots purely for investment purposes can yield healthy profits, too.

To buy a plot requires a down payment. HomeCapital provides down payment assistance for plots. Such assistance is highly beneficial for young buyers who usually do not have enough savings to pay the entire down payment upfront. The amount borrowed from us can be repaid in 12 easy EMIs.

Important factors to keep in mind before signing the plot ownership deed:

Verify the seller’s claim to the plot through original documents and deeds.
Rectify the title deed properly, to ensure that the transfer and legal ownership of the land by the seller is undisputed.
Collect any previous tax receipts generated from the seller for further verification.

Final thoughts on buying plots in India

If you are planning to buy a plot, evaluate the property in terms of the future growth prospects, that is if any infrastructure project is coming in the nearby location and how good is the connectivity. Better connectivity and upcoming infrastructure projects increase the chances of value appreciation of plots.

Also, keep in mind in the case of agricultural lands, only a small percentage of the property can be used for house construction. In some states, you need to qualify as an agriculturist to buy such land.

Further, for lower risk of dispute on the title, better security and amenities, one can also look at gated plots offered by reputed developers. It would be remiss to note that, gated developments offer better amenities compared to standalone plots. Also, building a house on your own requires a fair amount of time and effort so you can alternatively consider buying a plotted development from a reputed developer.

Government makes slot booking essential for property registration in Maharashtra

Posted on April 20, 2021April 20, 2021 by HomeCapital Team

The government of Maharashtra has made slot-booking compulsory for registration of property from the month of April. The new directive has been issued in order to prevent Covid spread through restrictive movement at registration offices. From April, people have to book their slots through the e-step-in facility to register the property. The new system in place will help break the Covid chain and ensure more safety for the citizens. All the registration offices in Maharashtra will open between 10 am to 6 pm for 5 days a week in the month of April.

Homebuyers registering properties in the month of April, both who have paid in advance their stamp duty and those who will pay in April, will have to follow the slot booking procedure. People with valid slot notification will be allowed inside the office premise. Authorities are also encouraging developers for e-registration of new projects to decrease the footfall at registration offices.

Is it necessary to register a property?

For homebuyers, registration of newly bought property is a mandatory part to complete the buying process. Under the Registration Act, 1908, homebuyers have to pay a percentage of total purchased value in form of stamp duty apart from 1% registration fee or Rs. 30000 (whichever is lower).

Most states offer registration services in both modes as offline and online facilities. Buyers can opt for any of these services as per their convenience to register plots and apartments. The online registration services are offered to provide all property registration services in a time-bound and hassle-free manner.

However, the online process can only give partial registration and to complete the registration procedure, one has to visit the sub-registrar’s office. Homebuyers can use the official registration portal of Maharashtra state to fill key information about the property, seller and the buyer. Even homebuyers can also pay the registration fees and stamp duty online.

Under Section 25, Maharashtra Registration Act, homebuyers need to submit complete documents for a property deed within four months beginning from the registration date to their respective sub-registrar’s office. A violation in the registration process, the state may impose a fine of ten times the registration fee.

Benefits of property registration:

The following are the benefits offered to home buyers on registering their new house:

• Ensures the genuineness of the property deed.

• Reassures the transfer of title to the owner, conservation of evidence, and avoidance of frauds.

• Maintains a public record for property registration.

• Ensures the authenticity of sale purchase documents of the property.

• To produce security of title deeds and to prove titles in case the original deeds are lost or destroyed.

Eligibility criteria and documents required

There are various sections under the Registration Act, 1908 that deals with the presentation of registration documents, by the homebuyer along with an authorised representative at the respective registration office.

A homebuyer needs to provide following documents along with the application to register a property:

• Copy of the agreement between the original purchaser and the developer

• Passport-size photo of both buyer and seller.

• Aadhar card of the homebuyer and seller

• Verified copy of the previous original sales deed

• NOC as per the land ceiling Act

• Copy of the recent property registration card

• Copy of the municipal tax receipt

• Completion certificate of the project

To assist homebuyers, especially the new one, HomeCapital offers interest-free loans for paying the initial amount to buy a property. This amount can be repaid in 12 easy EMIs. The scheme benefits young homebuyers who may not have sufficient capital to pay the down payment amount.

Owning a house is everyone’s dream, and property registration gives peace of mind to homebuyers in terms of genuine deals that do not invite any hassle post buying and payment. Every home buyer must register their property after thorough inquiry and proper documentation.

Mumbai Residential Real Estate: 2020 Performance Update

Posted on March 30, 2021March 30, 2021 by HomeCapital Team

The year 2020 will be remembered for many reasons in the real estate industry. When the pandemic had paralyzed the entire world, the real estate sector seemed to be on the move, especially in Mumbai. In a bid to revive the industry, the government announced a number of relief measures, which included reducing the stamp duty, hiking the differential rate, slashing development premiums, and rationalizing risk weights. They seem to have worked because Mumbai saw a record number of new home registrations in the last quarter of an otherwise forgettable year.

So how well did Mumbai’s real estate market perform? Here’s a close look at its 2020 performance update.

How did Mumbai’s residential real estate market fare in 2020?

Unsurprisingly, the market dipped when the pandemic induced a lockdown as the world ground to a halt. But it bounced back to a great extent as most of Mumbai saw a rise in sales. South Central Mumbai experienced a three-figure YOY growth. Other areas such as Central Suburbs, Western Suburbs and Thane saw a more modest two-figure rise. In the Peripheral Western Suburbs, the sales figures were up by 2 percent.

It was only in the Peripheral Central Suburbs and Navi Mumbai that sales figures dipped slightly. Most of this growth in sales was due to the various relief measures such as reduction in stamp duty, low interest rates on home loans and offers run by developers themselves. The number of new home bookings surged on the backs of these three factors. Mumbai residential real estate market is finally showing a steady growth after a year full of ups and downs.

Is there really a demand for real estate?

According to reports in the third quarter of 2020, residential sales saw an increase of 85% over the previous quarter. Thane West was the biggest contributor in this growth. This rise in sales showed that there is very much a demand for residential properties, especially for affordable housing options. And it doesn’t look like it is going to slow down in 2021 either.

Sure, most of this is a pent-up demand that was initially thwarted by the worsening global situation of the pandemic. But home buyers now want to take advantage of the measures announced by the government such as reduced stamp duty, low home loan interest rates and developer offers. In fact, an appreciable percentage of buyers in the market now are looking to looking for a place to stay rather than create assets rather than. Whatever the reasons may be, the demand is there, and it is gradually growing.

Will the growth sustain?

Many industry insiders are predicting a sustained demand for residential real estate in Mumbai. According to them, Maharashtra has emerged as one of India’s fastest-growing real estate markets. The growth is also partly being driven by the fact that new home buyers are now being smart about their timing. Those who were on the fence before are now taking the plunge, thanks to the new relief measures.

The prudent home buyers know that they might not get such measures and offers in the future. Now is the time if they want to spend their hard-earned money on a new home. Experts are anticipating that this surge of growth in Mumbai will spur the growth in Central India.

Who is buying homes now?

As people are gradually returning to the city to resume their lives, there’s a marked preference for purchasing a home as against renting one. This has resulted in the demand being driven by young families who are looking for their first home in the Maximum City. Hence, the demand graph is skewed more in the favour of affordable housing in the suburbs.

Additional Incentive – Home Down Payment Assistance Program

In addition to these developments, HomeCapital kept its Home Down Payment Assistance Program open all throughout the pandemic. So, even though many prospective home buyers took a hit in their income levels, they could still take advantage of the relief measures and book their dream homes with home down payment assistance. The program offers up to 50% of a property’s down payment amount as an interest-free loan which can be repaid in 12 EMIs. They partner with leading residential developers all over the city to maximise the benefits of their program. Here are some of the projects they are associated with in the vibrant Mumbai residential real estate market:

Mahavir Square by Squarefeet Group (Thane)
Codename Rising North by NRose Developers (Dahisar)
Sumer Codename Casa by Sumer Group (Chandivali)
Purva Clermont by Puravankara Limited (Chembur)
Elegance by Group Satellite (Goregoan)

Reduction in stamp duty in India’s most livable city

Posted on March 23, 2021March 25, 2021 by Pradumna Kamani

Another reason to rejoice and own a home in India’s most livable city i.e. Bangalore is that the homebuyers will now get a discount on stamp duty during 2021-22. The government of Karnataka has reduced the stamp duty from 5% to 3% for affordable segment apartments that are priced between Rs 35 – 45 lakh. This cut in stamp duty is valid for a period of one year. The State government is looking to boost affordable housing sales in Karnataka where Bangalore is the largest real estate market.

Bangalore, undoubtedly, offers best-in-class civic amenities to residents and is also the most flourishing IT hub in the country. The weather of Bangalore is also a prominent reason for people to make this city their abode. Working professionals, who come to Bangalore, can now avail this opportunity as most of the market scenario favors the buyers such as low home loan interest rates, availability of properties, offers by the developers, and now reduction in the stamp duty.

Impact on Bangalore’s affordable housing sector

Experts believe that move will encourage homebuyers to own a home in India’s most livable city, especially who were willing to delay their decision to buy a house due to uncertainty infused by the pandemic. The reduction of stamp duty in Karnataka is also expected to follow the trend in Maharashtra where sales picked up after cut in Stamp duty. The announcement will also improve the sentiments in housing sector of the State. The state stamps and registrations department of Karnataka had collected Rs 9,014-crore from stamps and registrations till February from across the state as against the annual target of Rs 12,655 crore for the upcoming fiscal (2021-22).

As per the estimates by Anarock Research, the city of Bangalore alone has about 59,350 unsold inventories in affordable segment, out of which 24% are priced below Rs 45 lakhs. The current incentive by the State government will help developers to clear the unsold housing stock.

HomeCapital helps young working professionals who are willing to own a house and may not have enough savings to pay the down payment. Our home down payment assistance platform offers an interest-free unsecured loan of up to 50% of the down payment amount to such individuals. The borrowed amount can be repaid in 12 easy EMIs. So if you are planning to purchase your first house, this is the most favorable time. Several options are available before buyers to choose from ready-to-move-in and under-construction segment.

Affordable segment projects available in Bangalore

There are some good housing projects available in Bangalore under affordable price segment of Rs 35-45 lakhs.

Godrej Nurture – located in Electronic city, Bangalore – offers 1,2, and 3 BHK apartments and is surrounded by greenery for fresh air. The project is spread over an area of 22.8 Acres.
Provident Park Square – is situated on Kanakapura Road in Bangalore. The 20-acre project offers 1, 2, and 3 BHK apartments. Provident Park One is the 5^th phase of the Provident Park Square project, which is at a 5-minute walking distance from the upcoming metro station and offers similar unit types.
Shriram YUVA is a newly launched project in Budigere Cross located just off Whitefield, Bangalore. The project covered by beautiful landscapes and has more than 78% open spaces. The project is spread over 11 acres with 9 towers.
Shriram Codename Dil Chahta Hai by the Shriram Group in Attibele, Hosur Road, Bangalore. The project has 20 blocks in 19 acres and offers only 2 BHK units, under the most affordable price segment.

Effect of Concession of Stamp Duty for Women Homebuyers in Maharashtra

Posted on March 22, 2021May 12, 2023 by Pradumna Kamani

In its budget for 2021-22, the Maharashtra government, announced a 1% concession on stamp duty for female homebuyers. To avail this discount the house property should be transferred to registered in the name of a woman. The new concession brings down the stamp duty charges to 2% for women homebuyers from existing 3% for property registration in the state of Maharashtra.

Industry Welcomes the Move

The real estate industry has welcomed the move saying that this will boost the sale of houses across Maharashtra. An increasing number of homebuyers are expected to take benefits of cut in stamp duty. Earlier in 2020, the Government of Maharashtra has reduced the stamp duty charges in August from 5% to 2% to boost the property sales impacted by the pandemic. The stamp duty was raised to 3% for first quarter of 2021. This reduction in stamp duty encouraged homebuyers to purchase their first house and saw a significant surge in property registration in past few months. For example, in February alone Mumbai saw registration of more than 10,000 housing units in February 2021.

How Women Buyers will Play a Key Role in Home Buying?

Home buying is an important decision for the family, especially for women, making them a key part of the decision-making. The rate of 2% on stamp duty and benefit of up to 2.67 lakh under PMAY, which mandates property registration in a woman’s name, is going to boost confidence of homebuyers especially women buyers.

According to a survey report by ANAROCK property consultants, women also prefer to buy a home as it gives them a sense of security.

The survey also concludes following points:

More than 70% of women consider this as an opportune time to buy a house.
Owning a physical asset, cheaper home loans, and attractive discounts and offers attracts around 31%, 28%, and 22% women, respectively.
Around 80% of women would purchase a house for end-use.
After the pandemic, women’s preference for a home has increased to 62% from 57% in the pre-pandemic era.
Around 71% of women would prefer ready-to-move-in property over an under-construction one.
Majority of women preferred 2 BHK and 3 BHK homes in the affordable segment.

The survey results are also encouraging for the developers, as families and women homebuyers have clarity on the choice of house, budget, availability, and offers, etc., which will add to a quicker home buying decision.

Benefits for Women Homebuyers in Current Market Scenario

The new announcement by the State government will surely prompt families and women to purchase properties in a woman’s name and that will also boost homeownership among women. In addition, some banks also offer discounted home loan rates if sales deed is made in a woman’s name. The difference in home loan interest rates between female and male borrowers can be up to 25 basis points, which makes a huge impact in the long term for large borrowings. Besides getting the benefits under new announcement for stamp duty, the initiative will also empower women to guide one of the key decisions for the family. For young working women, this new directive and add on benefits will instill confidence among themselves to buy a house on their own.

For such young homebuyers, who may have insufficient savings to pay down payment to purchase their first home, HomeCapital offers interest-free capital towards the initial booking amount. HomeCapital is a platform that supports individuals to help them purchase their first home by offering an interest-free unsecured personal loan of up to 50% of the down payment that can be paid back in 12 EMIs.

Impact on Real Estate Sector

In cities like Mumbai, Thane and Pune; where number of working women is more as compared to other parts of Maharashtra, the concession in stamp duty and other benefits will give much needed push to sales in real estate sector. The new work from home culture that emerged across many service sector jobs, the demand for upgrading to bigger house may also prompt families to upgrade their existing homes. This will encourage the sales of larger 2 BHK or 3 BHK apartments.

Real estate experts also predict that all of these benefits will encourage families and women to buy a house, which will further boost the sector’s growth. The associated 260 industries that cater real estate sector will also get benefited by the State government’s decision. The current real estate market favors homebuyers in all perspectives whether home loan rates, stamp duty charges, availability of ready-to-move properties, and offers from developers.

Importance of your credit score in a post-Covid scenario for your home loan

Posted on March 17, 2021March 23, 2021 by HomeCapital Team

A credit score is an assessment tool for lending institutions to verify the customer’s profile to sanction a home loan. A score above 750 is considered good for securing a home loan. The score has become more important in post-Covid -19 scenario. Lenders are now pricing loans differently based on the creditworthiness of the borrower. Due to the Reserve Bank of India’s new policies on interest rates, all banks and lending institutions are offering home loan interest rates as low as they were 15 years back.

Why credit score is important?

The banks use credit scores to differentiate borrowers with riskier profiles after Covid-19, such as the repayment capabilities of a customer can be compromised, who has irregular cash flows in their accounts. So, the customers with higher credit score are having better chances of getting home loan quicker with lower interest rates, as banks are offering varying interest rates for different credit scores. For example, one of the largest lender’s in the country, is now offering home loans at 6.7% per annum. However, this interest rate is only available to those customers who have a credit score of more than 800.

On the other hand, the customers with a score between 700 and 800 may be charged with an interest rate of 6.8 to 6.9%, while any borrower with a score below 700 need to pay the regular home loan interest rate of 7-7.25%. The interest rates may also slightly vary with amount of loan within this range. Not only government banks but some private sector banks are also offering competitive interest rates on home loan. Some private sector banks have reduced its home loan interest rate to as low as 6.65%, but again this rate will be applicable to borrowers with a credit score above 800 only.

How to maintain a good credit score?

In today’s era, there are multiple channels of spending and payments such as credit cards, payment gateways, UPI, net banking etc. All of these digital payment channels are routed through bank and recorded on the basis of customers details registered with the bank. So, all of your bill payments or EMIs or other forms of investments are under scrutiny by credit bureaus, which use your credit history to generate a credit score. Currently, RBI has approved four such agencies for credit score ratings. These agencies also have collaboration with different banks to keep a track record of customers credit score.

So, the best way to maintain a good score is that never default on your EMIs or monthly payments etc. Any disruptions in your credit history may impact your credit score as well as the chances of getting home loan approval at lower interest rates. A good credit score ensure that the borrower has a consistent track record in terms of financial transactions and has not defaulted on repayments on borrowings. A credit rating agency evaluates credit handling tendencies, payment history, and existing finances of a customer to award a good credit score.

Good time to buy a home?

Maintaining a good credit score is beneficial to homebuyers, especially first time homebuyers with limited savings as it eases the burden of having more cash with them at the time of booking. The low interest rates are also attracting more borrowers to avail home loans, as interest rates are at a multi decade low.

To assist first time home buyers, especially the young professional who may lack enough savings to pay the initial down payment amount at the time of booking, HomeCapital offers an interest free unsecured personal loan of up to 50% of the down payment. This can be repaid in 12 EMIs. So if you have a good credit score then this is an opportune time to buy your first home, as home loan interest rates, stamp duty reduction by State governments and offers from developers are favoring the buyers.

Housing in India’s most livable cities

Posted on March 16, 2021March 16, 2021 by HomeCapital Team

Bangalore and Pune are known for urbanization, industrialization and pleasant weather making them among the preferred locations for homebuyers. The recent government report on’ Ease of Living Index’ also ranked both of these cities among top across India in terms of urban development initiatives and quality of life. The survey report further instills the confidence of homebuyers in housing sector of these two fast developing cities. Multi decade low home loan rates along with attractive offers by the developers are major reasons for surge in booking for affordable homes segment in post-Covid scenario, with 70% buyers’ category being end users.

Offers for homebuyers

The government of Maharashtra and Karnataka reduced stamp duty to give boost to real estate sales, making it an opportune time for homebuyers also. The developers are also coming up with attractive schemes such as free gold coins, modular kitchen, car and EMI-holiday etc. These schemes helped in converting more sales especially in 2 BHK and 3 BHK home segments, priced between INR 50 lakh to INR 1 crore during FY3 2020. Buyers can choose from various affordable and mid-range projects in ready to move and under construction segment.

A quick overview of housing markets in Bangalore and Pune:

Bangalore saw 61000 new launches in past two years, with average 2 BHK price ranging between 45 lakh to 68 lakh*.
In past two years, Pune witnessed 70000 new project launches with the average property prices ranging between 45 lakh to 70 lakhs for a 2 BHK apartment*.

In addition, the new metro routes are going to become operational soon in Pune and Bangalore for better connectivity and transport options between major locations, railway stations and airports.

Owning an apartment in a housing project across these markets is a good decision as the current scenario favors the homebuyers. But, sometimes, young professional may have insufficient savings to fund the initial amount for down payment to buy a house. HomeCapital is a platform that supports such individuals to help them purchase their first home by offering an interest free unsecured personal loan of up to 50% of the down payment that can be paid back in 12 EMIs.

Buyers’ perspective: changed priorities

At present, looking at the prices of shares in the stock market, real estate prices are in the affordable to mid-range making real estate the most promising segment. The current market scenario offers ready to move inventories at the price of under construction property, which also attract the GST. However, experts feel that the surge in demand will soon give a rise in property prices again so this is the right time for owning a house as all the factors favoring the buyers.

According to a report by Anarock, housing is the most preferred asset class over other asset classes such as gold, FDs and stock market after Covid-19 pandemic. Around 62% people consider this is an appropriate time to own a home, as even millennials are focusing on buying a house. Several prospective homebuyers are moving towards peripheral locations, which offer larger size properties along with an improved lifestyle at affordable prices.

Many homebuyers are also looking to own a house because it gives them a sense of security during exigencies like the pandemic in 2020. More than 60% homebuyers prefer to purchase a property from branded and known developers and are ready to pay even more than the non-branded ones, due to their compliance for quality and time bound completion of the project. Keeping in mind the work from home perspective, bigger homes are in demand, even in suburbs to accommodate the changed needs. For some, this has also reversed the trend of buying a house in proximity to the workplace, as your home is the new office now.

Promising projects in Pune and Bangalore

There are some great upcoming housing projects in Bangalore and Pune that offer better prospects to residential market and provide ease of living.

Bangalore

Shriram Yuva – is nestled in the lap of greenery and fresh air. The project is spread over nearly 11 acres of land and has 78% of open space. It consists of 9 towers of 14 floors each.
Purva Atmosphere – has three towers that are sleek, minimal, contemporary and international plenty of natural light and ventilation for all living spaces.
Sobha Royal Pavilion is a luxury Rajasthan theme based project spread over a total area of 23.62 acres and located at a distance of 11.7 km from old Airport and 11.4 km from Koramangala Bus Stand.

Pune

Purva Silversands – are beach themed apartments in Mundhwa. It has 13 towers spread across 19.52 acres
Joyville Sensorium – is a luxury abode in the most sought-after suburb of Hinjawadi and IT hotspot of Pune.

*except the central part of the city

Home Loan Top-Up: How is it a cost-effective alternative to a personal loan?

Posted on February 25, 2021December 15, 2021 by HomeCapital Team

As the name suggests, a top-up loan refers to the additional amount provided by the bank to an existing home loan customer. The amount is decided on the basis of customers’ credit score and their personal/professional needs. There is no need to mortgage any property to avail top-up loan and financing institutions do not impose any precondition for the usage of funds. Customers are free to use this amount for any type of requirement.

To avail a top-up loan the applicant must have paid some installments of the home loan. Defaulters on EMIs do not get a top-up loan easily and it also depends and varies from bank to bank. If some bank or financing institution refuses to give top-up amount, the applicant may also consider transferring the existing loan to another bank that is willing to offer the required amount.

The concept of home loan top-up was started to assist existing homebuyers who are paying hefty amounts of home loan installments and have also exhausted their savings in the process of home buying. A top-up loan allow such individuals to avoid taking personal loan for any financial emergency or need including kids education, house interiors, or any other urgent requirement. Their good track record of repayment and repo with the lending institution also helps them with easy and quick disbursement of the top-up amount. This facility prevents people to borrow from family, relatives and friends or high interest rate financing schemes, which may bring more stress to them in future. In addition, the higher interest rates charged on personal loan can impact your monthly budget and expenses, as it becomes very difficult to pay two loans at the same time.

Eligibility for top-up home loan

The lending institution or bank checks the past record of the applicant for repayment of the existing home loan. Once the checking procedure is complete the bank accepts the top-up requests from the customer and performs necessary documentation to sanction the additional amount. In case, the customer wishes to transfer the home loan to another bank then the new lender also conducts KYC formalities again.

The sanctioned amount under top-up scheme varies from bank to bank and terms of disbursing. Several banks consider that existing home loan dues and requested top-up amount should be in line with the total home loan approved originally, while keeping in view applicant’s current income and margin constraint. Some other financing institutions consider customer’s overall loan eligibility based on current income with a margin nearly 25%, based on existing value of the property purchased through home loan.

Depending on the existing home loan amount, tenure left, and sanctioned top-up amount the maximum repayment time for top-up loan can be up to 15 years.

Important points to know about top-up loan

Quick disbursal

The bank process your top-up loan faster, as your profile details is already with them, without initiating any additional inquiry and tiring paperwork.

Lower rate of interest

Compared to a personal loan where the interest rate may vary from 11-24%, the top-up loan can be availed on the same or slightly higher interest rates as home loan.

Genuine funding

When in urgent need, top-up loan also serve as a trusted source of funding, with consistent EMIs and no hassles.

Increased EMIs

Top-up loan facility is offered to only existing home loan customers, who have good credit score. Also the amount availed under this scheme is very limited. The top-up amount and subsequent interest rate incurred on that will also increase the monthly installment amount for the home buyers.

Tax benefit on top-up loan

In case, a top-up loan is sought to buy a home, then the principal and interest amount both will be subjected to tax deductions under section 24 and 80C of the Income Tax Act. However, the loan taken for other personal or professional purposes will not come under the ambit of income tax benefits. But compared to personal loan interest rates a top-up loan is always a better alternative to fulfill your financial needs. A top-up loan can bring significant financial stability and positivity to an individual who need money. One should always conduct the right assessment of their financial needs and apply for a top-up.

HomeCapital assists first-time homebuyers for paying the down payment, especially the young home buyers as they usually have lesser amount of savings to pay the margin amount. This amount can be repaid in 12 EMIs.

Delhi government announces a flat 20% reduction in circle rates

Posted on February 12, 2021April 28, 2021 by HomeCapital Team

Here’s some good news for new home buyers in Delhi! After Maharashtra, it now Delhi’s turn to rejoice over the latest developments in its real estate market. In a move that is aimed towards benefitting home buyers as well as developers, Delhi government has announced a 20% reduction in the existing circle rate. It will mean that home buyers will pay less for their new homes and property developers will sell more. Announced on 5^th February 2021, this concession will remain in effect for six months until 30^th September 2021. That’s the good news. What’s even better is that the revised circle rate will be applicable to residential, commercial and industrial properties all throughout Delhi.

The circle rate scenario in Delhi

Properties in Delhi are divided into eight categories, from Category A to Category H. Category A designates the most expensive and posh areas of the city, while the properties under Category H are the lowest priced. The circle rate varies significantly between these categories. Generally, commercial properties are assigned a higher circle rate than residential properties. But the rate also varies according to the type of the property.

The registration value of a flat is different than that of a plot or an independent house, even if they are located in the same area. This recent reduction in circle rate will help move more properties in the posh areas such as Vasant Vihar, Maharani Bagh, Friends Colony, New Friends Colony and Anand Niketan. Currently, the market rate is lower than the circle rate in these areas. This mismatch had somewhat stagnated the real estate market in these areas.

But with their latest announcement, the government hopes to inspire those on the fence about buying a new property, especially in the Category A markets.

Circle rates in Delhi and their impact on home buying

Here’s a brief overview of the circle rates across the various categories in Delhi.

Category	Land Cost (per sq. metre)	Construction Cost Residential (per sq. metre)
A	Rs 7.74 lakhs	Rs 21,960/-
B	Rs 2.46 lakhs	Rs 17,400/-
C	Rs 1.6 lakhs	Rs 13,920/-
D	Rs 1.28 lakhs	Rs 11,160/-
E	Rs 70,080/-	Rs 9,360/-
F	Rs 56.640/-	Rs 8,220/-
G	Rs 46,200/-	Rs 6,960/-
H	Rs 23,280/-	Rs 3,480/-

The age and type of the property also plays a role in determining the final circle rate. With a cut in circle rate, even though for a limited period, home buyers in Delhi now face a lower financial burden as the home costs will be lower than before. The prospect of a lower home loan will spur many undecided home buyers to take the plunge. So those who were holding off buying a new home because of the prevalent high prices now have their decision made for them. They have the chance to realise their ultimate dream. Even more so when that have the assistance of HomeCapital, India’s first home down payment assistance program.

That’s a big load off

For some prospective home buyers, getting a home loan sanctioned is not an issue. But they may struggle to raise their home’s down payment. It may be a substantial amount, depending on the developer and the cost of the property. Then there are some home buyers who look to reduce their long-term financial burden by making a larger down payment. With a larger down payment, they can either reduce the tenure of their home loan or bring down the EMI amount that they have to pay every month.

HomeCapital is a home down payment assistance program that empowers home buyers to take control of their financial commitment. They help out by financing up to 50% of a home’s down payment as an interest-free loan. It is returnable as easy EMIs over a pre-determined period of time. With this latest, 20% cut in circle rate and HomeCapital’s down payment assistance, home buyers in Delhi have the chance to buy their dream home in the locality they always wanted. We’ll definitely see a surge in home buying in the upcoming months.