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How to brace for the annual increase in housing rent?

Posted on by HomeCapital Team

The basic necessity of humans to carry on living is via satisfying the three basic parameters of life namely food, clothing and shelter. The security of the roof above is incomparable. Robust demand accompanied has even witnessed the real estate developers to bid a price to the investors to explore in the field of renting.

Large metros in India invite thousands of people of several cities, states, villages and small towns all-round the year mainly due to fulfilling livelihood demands. The migration of these large chunks of people complementarily spurs up the demand for rental housing facilities. Additionally, just commencing to work does not leave many new members of the working population to buy a house at the go. Thus, every new day is witnessing the rental market boom like no other. The rush has lead to redesigning the service provided by the home builders to be landlords and have re-imaged the real estate sector.

The trend of national housing rent that is rising

The Reserve Bank of India (RBI) housing price index, has clearly highlighted the rising trend of housing rent prices throughout the past year. Around 11.09 million housing units all over India, especially in the urban areas, have institutionalized the long unorganized renting market in the country. A contribution of 13.5% by Maharashtra, 5.9% by West Bengal, 13.8% by Andhra Pradesh and 4.3% by Delhi to the total stock of the urban rental household sector is overwhelming. The blooming of India’s rental housing market space is further assured by some important segments of the market officially registering the rental yield of 4%. Tier 1 cities housing landlords have filed their yield much above 3%. Ahmadabad and Chennai have projected housing rent growth of as much as 0.7% and 0.4%. Although the highest growth in housing rent is marked by Bengaluru, Kolkata, Ahmadabad and Hyderabad.

Home down payment programs can help you relax about the house rent traction

HomeCapital has already captured the attention of the mass with India’s first Home Down Payment Assistance Program. Accurate analysis of the real estate market and being able to redefine and accelerate home ownership for first time home buyers have added to the credibility of the HomeCapital program. It has brilliantly submitted towards assisting people to cross the hurdle of home down payment and achieving their dream of ownership of an abode.

Your housing demand is sure to be assisted by the HomeCapital program. The following highlight the USP of their program:

  • Association of HomeCapital with leading real estate developers as well as reputed financial institutions have facilitated them to show the light of hope to a robust population of habitat seekers
  • The HomeCapital program is completely interest-free which is definite to lubricate the financial traction of a host of first-time home buyers. The interest of the regime is borne single – handedly by HomeCapital
  • The down payment assistance is in the form of a personal loan which is equal to your contribution towards the down payment
  • You are privileged to repay the credit principle amount in the form of equally distributed monthly instalments over a period of 12 months.

You can thus live your dream of purchasing your first abode in the near future without being forced to postpone the same owing to insufficient stocked savings. Thus, you can select the best of homes that is well-aligned with your taste.

Cost comparison between renting annually versus buying your own house

It is always wise to carry out a cost-benefit analysis of a rent versus buy scenario before plunging into any kind of contract. Especially, in case of financial decision making the importance of the same is unparalleled. Buying a house pushes people to get into a “less abundant lifestyle”, meaning cutting massively on various other expenditures for a substantial period of time. The motivation and will power be the other two major factors alongside the buying power that drives the decision to buy a house.

Consider the housing rent of a 2 BHK apartment in Mumbai to be around ₹50 thousand every month. As we advance in time, the cost is likely to elevate marginally. While on the other hand, purchasing a house with a home loan could fix your EMI at around ₹ 80 – 90 thousand a month. This amount may initially seem a higher amount than the monthly rent, but in the longer run it results in much higher savings. Real estate developers require you to pay a down payment while buying your house. According to the RBI, this amount could vary from 5% to 20%. HomeCapital’s program helps you with half of the down payment amount and helps you fast forward home ownership.  

Having a home of your own home is definitely a relaxation you would love to experience in the long run. Aging makes a person wiser and even cultivates their habit of spending, thus the EMI option might not look so burdening an idea. Moreover, rent just assures a month of shelter, while EMIs additionally take you closer to ownership. Walking on the path to get a self-owned house at the earliest with HomeCapital is definite to satisfy the feeling of ownership of a roof above your head. Psychologically, rent and landlords hovering every month are pretty disturbing. Don’t waste time; put your resources at the earliest to buy your first house companioning HomeCapital.

Top 5 home down payment myths debunked

Posted on by HomeCapital Team

When it comes down to it, buying a home is a challenging and daunting endeavour. And when you’ve finally picked the home you always desired, the often long, drawn-out process of making the down payments on your abode-to-be begins. So what’s the light at the end of the tunnel, here? It’s that home down payment assistance is a godsend for first time home buyers. The daunting process of being able to own your first home is made that much easier by the various schemes and programs available. And there are many to choose from if you only had the right assistance and could separate fact from fiction. So, to make it a little bit easier for you, let us walk you through the top five home down payment myths and why they are completely untrue.

Myth 1: You need 20% down payment to buy a home.

While the hunt for a home is strenuous itself, house hunters also fall prey easily to tales of enormous down payments. And somehow, quite a substantial number of first-time home buyers are under the impression that they need to provide 20% of the home down payment to buy the home they desire. However, this is patently false and should not be something to concern those who are house hunting for the first time. While 20% is a commonly quoted figure, lenders are more than happy to accept a home down payment starting at a mere 5 %. So please rest assured, your desirable home can be yours without you needing to arrange for a crazy amount of money or paying an arm and a leg.

Myth 2: It is difficult to qualify for home buyer programs.

A lot of people on the house hunt for the first time are stressed because a prevalent myth is that it is hard to qualify for home buyer programs. However, there are several schemes that prospective first time home buyers can take advantage of. For example, in 2019 itself the government extended a loan subsidy scheme under the RERA Act 2016. It was extended for a year for first time home buyers who an annual income between ₹ 6 and 18 lakhs per year. This particular scheme meant that new home buyers would be entitled to about ₹ 2.5 lakh worth of assistance from the central government towards their home down payment. As you can see, this means there is nothing to worry about since this and more schemes exist to benefit a wide variety of first time home buyers. 

Myth 3: Down payment programs aren’t available in India.

One prevailing myth that many prospective first time homeowners in India labour under are that there aren’t home down payment programs in India. As already stated, this is untrue and a myth. For example, HomeCapital’s tech-based solution is India’s first Home Down Payment Assistance Program. Our digital offering reduces the burden on first time home buyers, offering them a transparent approach to calculating their down payment assistance eligibility for a variety of offerings. HomeCapital allows first time home buyers to apply online for a home down payment assistance for half of the home down. The assistance is based on the home buyer’s income and credit history. The assistance is in the form of an unsecured loan which is interest-free. With data and digital capabilities as their tools, HomeCapital leverages technology to fast track home buying for house hunters. 

Myth 4: It’s too expensive to buy a home in my market.

When it comes down to it, the current market scenario, inflation, and the millennial mindset of renting everything and never buying have led to a certain trend of thinking: it’s too expensive to buy a home. This, however, is yet another myth. Under the numerous schemes from the government as well as the various assistance programs and loans available, it is possible to own your own home. With the right assistance, backed by research and due diligence, owning your first home is within the realm of possibility. Besides, once you own property, it is a high performing asset, through which you can earn a passive income by renting out, which is highly lucrative now in the era of the sharing economy. So, not only is owning your own home within your grasp, but it can also be an investment in future income. 

Myth 5: Down payment programs make home financing more difficult.

Buying a home is possibly going to be the largest investment or payment you will ever make. And getting all the assistance you can get is only going to be wiser. In the case of choosing to opt for a down payment program, you will have to demonstrate being financially responsible. This means having an impeccable credit score as well as filling out the online application. You will also have to do your research to be able to say with full clarity that you have made the right choice. This can seem daunting, especially when you are already overwhelmed by the process of hunting for your first home. However, these are just the necessary stepping stones to access a good home down payment program, which will ensure your first home is within your grasp. This is also another reason why the HomeCapital program is a good option. It will assist you in your research with offerings from leading developers they have tie-ups with, to find you your future home.

All in all, while searching for a home is a long, involved process, with many moving parts, at the end of it you are blessed with a place to call your own. So, do the research and take the best assistance you can, while enrolling for HomeCapital’s Home Down Payment Assistance Program. It will ensure that your accelerated home ownership for you and your loved ones. 

Steps for every renter to own their first home

Posted on by HomeCapital Team

Your house is the only place where you can unwind and enjoy yourself with your family without any concern. No matter how much you love to travel, you feel relaxed once you are back in your home with your family. You may be happy living in a rented house for many years but living in your own first home is always special. Living with your loved ones in your own purchased house at your preferred location has its perks. Every renter desires to purchase a home of his/her someday. There could be many hitches and restrictions that you have to abide by while staying in a rented place. Having a house of your own will let you act according to your own will. Being your landlord is a sign of independence. Possessing a house of your own can be considered to be reaching one of the biggest milestones of your life. With this purchase, you are about to make a huge financial commitment too.

Purchasing your first home can be of great challenge for a first-time home buyer. You have to make sure to take the right steps and measures that are required to avoid any kind of mistake which you may regret later. It is not an easy task, neither a decision that can be taken in a single day. It takes a lot of time and effort to get the best deal possible for your first home. First-time home buyers lack experience and thus must be very careful while making this important decision. Following the steps below can help make your house-buying process manageable:

1. Simple budget review

As you are planning to purchase your first home, the first question that you should ask yourself is if you are ready to make such a big investment in the present scenario. While buying your first home, you are paying a huge amount at once in comparison to paying rent for your house where you let out a lesser amount. You also have to consider all the added recurring costs that include house repairs, maintenance and utility cost, water and property taxes, insurance and many more. You have to make yourself financially prepared to afford these expenses.

Start by auditing your present financial health. A budget review can give you a clear picture if you are ready for making this purchase. Be prepared to bear the purchase expense as well as the on-going family expenses. Consider maintaining a contingency fund that can provide you for at least three to six months of living expenses.  

Reviewing your annual and monthly spending is another important step. This will help you to understand where you are spending and how much you can afford for mortgage or loan payments. Account everything from food, utilities, education to entertainment and other miscellaneous items.

Get out of any debts or plan to reduce it to a minimum. It is better to make big investments like purchasing a house while you are not under large debts. It is also advisable to get rid of high-interest credit card loans since you need a good credit score to qualify for a home loan.  

2. Early research

Early research is essential while you are planning to purchase your first home. Go through all the property websites and advertisements in newspapers and magazines that can give ideas about the real estate listings. Make note of the properties you are interested in and also note the changes in the demanding prices in any. Monitor how long they stay in the market. All these are necessary to give you a proper understanding of the housing trends in your preferred areas.  

3. Selection of the property

Being a first–time home buyer, you have to be more cautious while choosing the home that suits you the best. Apart from considering the budget, other aspects are also essential before coming to any decision. Don’t rush for a property just because it suits your pocket. It is a long-term investment that must be taken only if you find everything is favorable. While you are looking for a property make sure to search based on certain parameters. Start your tour for a new home that comes under your price range.

First, you have to select the configuration of the house you like to purchase. For example, you can plan to buy a 2 BHK or a 3 BHK flat according to the needs of your family. Buying an unnecessary big house even when you cannot afford would not be a wise decision.  

Second, check the location if it is suitable for residing peacefully with your family. Make sure there are hospitals and schools nearby. Some may prefer to stay near shopping markets or the epicenter of the town. The location must be suitable for your social infrastructure.  

Third, check on the amenities the property is providing. Well maintained water supply, electricity, power backup, security service is some of the basic and necessary amenities. You may also consider other amenities like swimming pool, clubhouse, gymnasium and amphitheater to name a few.

4. Search for down payment programs

A home buyer may face down payment hurdles due to insufficient savings. HomeCapital can help you pass through this phase with its unique home down payment assistance program. They provide first time home buyers with half of the down payment amount equal to the home buyer’s contribution interest-free. HomeCapital has tie-ups with more than 50 leading real estate developers across India and helps home buyers purchase own first home.  

Purchasing a house is something that we do not do every day. Take your time and make the correct decision to avoid exhausting your financial health. Remember to plan well to live a happy and peaceful life with your family.  

Dos and don’ts while buying your first home

Posted on by HomeCapital Team

Home is where you enjoy wonderful moments with your family. Purchasing your first home is one of the most blissful moments. It is where you share those joyous moments with your near and dear ones and get to rest serenely after a long and hectic day while hustling in this fast-paced world. As you grow older, the commemorations of celebrating the birthdays of your children, your anniversary parties or some random family or friends get together in your house will be well cherished. This is where you live with your beloved while making memories of those happy hours spent together.

Everybody dreams of having a house of their own someday. No matter how big or small your first house maybe, living in a house of your own gives you the ultimate satisfaction and happiness. Buying your first house is always a matter of great joy but you should also be careful about certain aspects. There are quite a few important sides that should be kept in mind while planning to buy a new house, especially in the case of your first house. 

Purchasing a house is not an easy and one day job. Never rush while taking any decision. It requires a lot of research and information especially if you are a first-time home buyer. Certain precautions are needed to be maintained while buying your first house. Our list of dos and don’ts while buying your first house helps you stay away from any kind of hassle in the future and can live peacefully in the house you always desired.

Do’s while buying your own house 

1. Always look for RERA approved properties

It is always advisable to look for only RERA approved properties. The Real Estate Regulatory Act 2016 was passed by the Indian Parliament to secure the rights of home buyers that may lead to boosting investments in the real estate industry. It ensures a fair transaction between the seller and the buyer of a particular property keeping both their interests in mind. One of the significant features of this Act is to provide a unified legal regime for purchasing flats, apartments or other properties ensuring a standardised practice throughout the country. Therefore, it is sensible to select RERA approved properties to avoid any trouble while buying your first house. 

2. Do your research on the developer’s track record

In your search for the most suitable house for you and our family, you must look for a reliable developer who can offer you the best according to your needs. Make sure to be well researched about the track record of the developer before contacting them to avoid chances of them defaulting on completion of the property or even such that they do not cross the committed delivery date of the project. Look for their credibility and old customer feedback on their website as well as do market research on them.

3. Try to maximise the down payment

It is best if you can maximise the home down payment amount that you are ought to pay the developer since there is no interest in the same. You can get unsecured and interest-free capital from HomeCapital as they contribute up to half of your home down payment requirements. This will also help you minimise the home loan amount from a bank who would charge you a certain rate of interest on the amount lent by them.

4. Check the prices of other properties in the same area based on certain parameters

Once you have selected property of your choice, check out the property prices of other properties in the same area keeping different parameters in mind. This is to ensure whether you are accepting the best deal for the house desired by you or are you paying higher than the usual ones. Do a cost-benefit analysis to evaluate the best option based on the similar unit configuration, carpet area, amenities provided and other factors. Go for it if the pricing has a satisfying match or continue your search for the right option.

5. Be aware of the taxation benefits

There are certain Acts and reforms introduced by the government that makes you entitled to tax benefits under section 80(c), 80 EE and 24(b). Consult your tax consultants if you are eligible for these benefits and gather information on how to avail of these benefits. In a home loan, the interest payable up to Rs 2 Lakh gets deducted from your gross total income while computing income from self-occupied house property. This is applicable only in cases when the acquisition or construction of the house is completed within three years from the end of the financial year in which the loan was taken.

6. Know the government subsidies

The government of India provides many programs under which the citizens are entitled to get subsidies while purchasing properties. There are certain parameters that a person has to meet in order to avail of the subsidy facility. It can be either based on the annual income of the buyer or based on a certain region he/she resides or are part of the underprivileged community. If you are entitled to receive these subsidies, purchasing your first house may become easier for you.

Don’ts while buying your own house

1. Do not purchase with a low credit score

Do not rush into purchasing a house if you have a low credit score. It is always wise to wait until your credit score to rise gradually to at least 750. A low credit score will reduce your chance of getting finance for your house purchase from a bank or any money-lending company. Having a better credit score increases your chances of getting a financial grant from these financial institutions to buy your first house.

2. Do not purchase a house away from essential social infrastructures

While you are looking for the perfect property for purchasing your first house, you must consider the locality as a significant factor. It must not be far away from your workplace or school of your children. The daily travel expense and the time taken for traveling far distance can become a liability for you and your family in the future. The house must be close to hospitals keeping medical emergencies in mind.

3. Don’t start house hunting before estimating your available finances and determining your budget

It is preferable to search for a property that suits your budget. Exhausting your budget is not a very good and feasible idea. Estimate your available finance while determining your budget before hunting for a suitable property. Even though you may have the required savings for paying the home down payment before approaching the bank for a home loan, it is better to keep those funds aside for times of emergency and look for home buyer programs that help you accelerate home ownership.

Determining whether you’re ready to buy your first home can be intimidating. Very few buyers, especially first-time buyers, are housing market experts or have read up on mortgage interest rates until it’s time to take the plunge. Thus, it is important to do in-depth research such that you are well informed while buying your first home.

The importance of your credit score

Posted on by HomeCapital Team

Credit Score is a three-digit number that determines your credit record or a summary of your credit history. It spans from a score of 300-900. The higher your range, the better is your credit score. Financial Institutions are generally interested in giving credit if your score is above 750.

In India, there are four main credit bureaus – the Credit Information Bureau (India) Limited or CIBIL, Equifax, Experian and CRIF High Mark. CIBIL was the first credit bureau to be established in India.

Why is a credit score important?

A credit score is a number that justifies an individual’s credit worthiness. A good score helps you get loans at a lower rate of interest, contrary to poor score loans that act as a hindrance in getting credit. The rate of interest when you apply for a loan with a lower credit score turns out to be very high. 

Why should one have a good credit score? 

A good credit score ranges from 700 – 900. One requires a healthy score for many reasons. One of the most important reasons is that it ensures a better chance of approval of loans. When you have a good score, the banks will offer you a lucrative deal which could be lower rates of interest, higher loan amount, longer payment windows, and probably breezy paperwork. With an impressive credit score, a bank can service approx. 80% of the actual property cost on home loans.

Why is a credit score important for me?

When a friend asks you to loan him some money it’s actually the trust, he has put in you about his repayment track that will help you decide whether you will give him the money or not. If you are applying for a loan of any sort, you cannot ignore the credit score factor. It is the CIR that will determine if the financial institution that you have approached, will eventually lend you the money or not. It is a registered organization that does the task which guarantors used to do in unorganized financial sectors 20 years ago. 

When it comes to a home loan, the score plays a pivotal role. Without a good score record, it’s almost impossible to avail of a home loan from a bank. If you have the score right, it will even get you a good home loan insurance at a surprisingly low premium.

Also, take note that your credit card application will get disapproved on the basis of a poor score.

How is a credit score calculated?

A very important element for determining the score is your very own behavior or your own track record toward repayment of loans. Based on information in the accounts and inquiry section of Credit Information Report you will get your score. The score is calculated on the following factors:

  • Credit utilization – How much credit are you using at the point?
  • Defaulting and delinquency – How much have you defaulted in amount and by the number of days?
  • Trade attribute – Meaning how old are the borrower’s credit and whether he has a mixed bag of credit.

How can I check my credit score and where? 

Here is how to get a free credit report 

Step 1: Go to the website of CIBIL/ CRIF/ Experian or Equifax

Step 2: Fill out the form that requires some of your necessary information such as your name, your contact number, email address, etc.

Step 3: Fill out the additional details about you including your Pan number. Make sure to enter your Pan details correctly.

Step 4: Answer all the questions about your loans and credit cards appropriately, based on which your credit score will be calculated, and your completed credit report will be generated.

What determines your credit record and the factors that affect it?

Listed below are some factors that can affect your score negatively. You need to work on these so that you can make your record better in the future.

  • Credit repayment history
  • High credit utilization ratio
  • Your outstanding debt
  • Multiple loans or credit card application
  • Always pay the minimum amount due
  • Not having a credit mix
  • Closing old credit card accounts

Is it a long term or a short-term phenomenon?

The credit score is a very large and intrinsic part of the loan industry and it is here to stay. A good score is like a strong backbone helping you stand tall in case of seeking loans.

A bad score is like a bad reputation that will require a long period for undoing. There is a concept known as “settled status” whereby the lender and borrower reach a term for the settlement of the outstanding which he is unable to pay. In this scenario, he may require a ‘no objection certificate’ to avail of any loans in the future.

How can I improve it? 

If for some reason you have not been able to maintain a good score you may want to take a look at how you can improve it.

  • Be disciplined with your loan repayment. Every installment counts.
  • Don’t overstretch your credit limits.
  • Always have a mixed credit in your name.
  • Rectify the mistakes in your credit reports.

Getting credit and using it in an informed manner also helps to improve your credit score.

Like most banks, NBFC will also require your credit report. Though they may not be very stringent on a high score, they may still have their own standard of assessing your credit history and mostly they will take a feeder from your score. 

Hence it is for your own benefit to have a clean record as the smallest of the financial organization will rely on a credit report for issuing a credit of any amount to you. 

Types of housing loans that can be availed from banks and NBFCs

Posted on by HomeCapital Team

So finally, you got the big career break were working diligently towards and now you are financially capable of buying your own home. Good news is, in India there are so many institutions that are eager to fund your home via housing loans. Demand for home loans have risen twice over the last twenty-five years with the new age of nuclear family that India has stepped into.

While speaking about buying a home or home related requirements, housing loans are the most viable options as they are largely flexible, can be customized to a particular degree and is also affordable considering the long tenures you commit yourself to.

Banks and NBFCs not only offer easy housing loans, there are loans available for many different purposes. Let’s take a look at all the different loans available and how one can take advantage of them:

1. Home loan

This is the simplest and most obvious choice when buying a home. You can even take housing loans if you own a piece of property and want to construct a home with it. The interest rates are generally affordable and these are long term meaning your income won’t take a big hit.

2. Home improvement loans

A home improvement loan comes handy when you want to renovate or repair your existing house, and either you don’t have the needed funds, or you don’t want to disrupt your savings. This loan comes as a blessing in disguise as it is mostly an unsecured loan, meaning you do not have to mortgage your property to avail this housing loan.

3. Loans for house construction

Usually taken for the purpose of either building your own home or any other property. These loans are generally sleeked by builders. Since the house construction loans are viewed as risky, the interest rates are high and the tenure short. Mostly just a year. The house construction loan may also be disbursed in phases. Here the terms of the loan are mostly decided by the lender.

4. NRI home loans

If you are a Non-Resident Indian and are planning to purchase a property in your home land, the banks and NBFCs will welcome you on a red carpet. Well not literally. Housing loans are the easiest to avail in terms of paperwork as you can apply for the loan online and get all the services from the comfort of your home. It is one of the most flexible housing loans where the tenure can even be extended up to 30 years, hassle free.

5. Bridge loans

Bridge loans are housing loans that involve bridging over from one phase to another. It means, it’s a loan you take to buy a new house until you can arrange your finance by selling the old or the existing one. It’s a short term secured loan where you either secure your existing home or hypothecate the new one. These loans are very popular in the real estate market, that help you cover the gap. What you should know is that the interest rate will be at least 1% higher than a general housing loan.

6. Home extension loans

This loan feature comes handy when you want to make structural changes to your existing property. When family extends you need to extend your space too.

Keep in mind that you will not be sanctioned a huge quantum of money for the extension purpose. The tenure and interest rates are almost alike to that of a regular housing loan. A very big plus point is you are still eligible for this loan while you are servicing a home buying loan.

7. Composite home loans

As the name suggests it’s a housing loan where you are clubbing two loans together, that is a loan for buying a plot and a loan for building a house on it. This is a common loan and the amount is decided upon the fixed obligation income ratio. Basically, you will get a lump sum amount that will be disbursed as and how the entire process advances.

This is a short-term loan where the creditor is expected to honor the loan amount back in approx. 5 years.

8. Home loan balance transfer

Sometimes it may so happen that the bank or an NBFC you have approached for a housing loan may increase the interest rates as per the RBI discretion. You may find yourself unable to service the loan. Or sometimes you are not happy with the facilities provided by your lender. In such a case you can request transfer of the balance to a financial institution of your liking. You can also avail a bigger quantum to the existing loan from the new bank. Make sure you transfer your case to a reputed institution.

9. Plot loans

A plot loan is for funding the purchase of a piece of land with the intention of building a house on it. You are entitled to certain tax redemptions once you actually build a house.

10. Stamp duty loans

When buying a house, you should also take into account the stamp duty and registration charges. With the real estate price sky rocketing it is obvious these amounts are enormous as well and may very much need a loan too. Hence the stamp duty loans, where the builder will mostly have a tie up with a bank whom you can approach. This will only make the process of acquiring the loan easy as against going to you own bank where you may have to do a lot of paper work.

Whatever your reason for seeking a housing loan, your best preparation is to thoroughly go through those reasons that may become a road block between you and your dream home.

We’d love to help you manage your down payment with a program that we have curated especially for first time home buyers. Click to check it out!

5 Ways to identify the right house at a suitable location during your home buying process

Posted on by HomeCapital Team

When we start our house hunt, its generally like searching for a needle in a haystack kind of an affair. There are too many options and equal amount of confusion. But finding the right abode may not be as difficult as it may seem. Just remember to look into a few key factors that will help you make an informed decision. Most important of all, do not rush into anything on impulse. Your R&D is what will score high on decision making.

1. Budget Vs. locality

First, zero down on the locality. Are you the one who wants to live in the quite suburb away from the noise? Or are you the one to thrive in the vibrancy of a city. Can you handle the traffic? Do you like it laid back? Is a popular neighborhood important to you? Ask yourself a lot of questions. Home buying is such a life-impacting decision that it is wise to spend some time looking within yourself.

Once you have concluded on the locality, the next big factor into play will be your budget. Generally, people have a budget and that is what mostly determines one’s home buying decision. But that’s not the right way forward. Do not let your budget be the decisive factor in home buying. Once you have concluded on the area, you may get a home in your budget. There will be ample choice so do not worry.

2. Proximity

Proximity is a very important factor in home buying. How close are you to the nearest railway station? How effective is the public transport in your choice of area. Can you survive without your own vehicle? Is the said area easily accessible? The distance and the connectivity from your workplace or the school of your children.  All these questions will also play an important role in your decision making.

3. Social infrastructure

When we refer to social infrastructure, we not only mean the basic amenities. Yes, during the home buying process, these come first, but we also have to look into facilities that may give us a better lifestyle. So do make this checklist. Is there a school, hospital, bank, ATM, departmental store etc. located in the vicinity? Is there a police station close by? Besides the day to day requirements, are there other facilities that may upgrade your lifestyle e.g. gymnasium, swimming pool, track and field, cinemas, shopping malls, parks etc. Is it a place where you will get most of your requirement within the range without having the stress of driving down? These again, are some intrinsic question to ask. How easy your life will be will depend a lot on this checklist.

4. Resale value

Always consider the resale value while home buying. It’s a tough call to take before selling a property while you are thinking about purchasing one. But it is prudent to look into this factor. Do consider this. Are you purchasing a property in an area that seems growth oriented? Is there an airport close by? Look out for big connectivity network either by rail or road. Are any business parks that seem to be coming up in near future? Is it a planned city? Few years down the line is the vicinity going to look upmarket or it is going to be thronging with more people and a growing population? Why are these questions important? Because you don’t want to investment in a property just to start regretting it a few years down the line.

5. Research

Do exhaustive research for a good amount of time. Do not make hasty decisions in the process of home buying. Be patient. Check out as many property options as you can and check up on the builder along with conducting a background check on any property disputes. You will get all the information regarding the builder and the ongoing project on internet and on RERA. Get the hidden facts. Understand the taxation as you will be surprised that the taxes can change from area to area. When you are narrowing down on a property, drive by it at different hours of the day. You will get the real picture of the traffic and how peaceful it actually is. Check the safety bit of the locality since it is of prime importance for your family. The stronger your research before zeroing on a home the lesser the regret.

And a final parting word. While home buying remember, a perfect home is when your need to check another property finally ends. While you have to take into consideration many aspects, it’s not always about the affordability and market risk. Home buying is as much about your instinct. When you have found your dream home you will know it. Before you plunge into the decision, take the time to understand that this home is going to fulfill your socio-economic and your emotional needs. Hence it always makes sense to never exceed your budget as it may impact those very spheres of your life.

Can a self – employed person self – finance his first house without family borrowing?

Posted on by HomeCapital Team

Self – employment is when an individual works for himself/herself rather than being employed for another company. Architects, doctors, sole – proprietors and many other professions fall into this category. A self -employed individual can acquire a loan provided he/she is able to prove his/her income stability.

Self-employed individuals will have to prove their ability to repay the loan that they have borrowed with income tax returns and audited financial statements of the business they run, by preparing and submitting it to the income tax department.

Are self-employed individuals eligible for home loans?

Yes, self-employed individuals can self-finance the house they buy even without the help of family money and the obligations that come along with it. If you are a self-employed individual seeking a home loan for the first time, you need to get your documents organized.

Eligibility

Lenders include banks and NBFCs that offer ample home loan opportunities to fit the needs of a self-employed individual seeking to self-finance their first house, which is where the following factors determine whether you eligible or non-eligible for a home loan

  1. Age – The applicant must be between 21 – 65 years of age. However, the younger applicant has age on his/her side because he/she has more time to repay the loan, while older applicants may need to make a higher down payment.
  2. Dependants – If the applicant has a high disposable income but also a higher number of dependants, then it will affect his/her chances of applying for the loan because the assumption that a higher number of dependants will affect the disposable income and in turn tax repayment.
  3. Income tax returns – The applicant should have filed ITRs for a minimum of 2 – 3 years as per the government norms.
  4. Profile of the applicant – This includes the applicant’s credit score that indicates if the applicant has paid off their loan if any and any credit dues on time in the past. The applicant’s credit score must total up to at least 750.
  5. Financial standing – The lender assesses the applicant’s assets in terms of property, housing ownership, gold and other investments. The applicant has a higher chance of securing a home loan if he/she operates from their own property like an office or even his home. The lender also does a background check of current debts like personal loans or any other credit debts.
  6. Business stability – The lender examines the applicant’s capacity to generate consistent income regularly and will check the bank statements, balance sheets, assets and liabilities of the business, which makes filing IT returns a crucial factor for the applicant. The business also should be running smoothly for a minimum of 3 years to prove an assurance of repayment.
  7. Gross annual revenue (GAR) – GAR is basically the income generated without deducting any expenses during the annual accounting period. Many banks and NBFCs offer loans to doctors or professionals that have a GAR of ₹5 lakhs minimum.

How should you repay the home loan that you take from a financial institution?

Many banks or NBFCs are flexible when it comes to loan repayment today. Some banks let you begin the EMI repayment late, while some also offer the option of taking a loan with decreasing EMIs. The Home Down Payment Assistance Program by HomeCapital also supports a self-employed individual who is planning to self-finance his first home with the necessary down payment funding. Here are a few EMI repayment options available through various banks and NBFCs:

a. Delayed home loan EMI repayment

Some banks and NBFCs offer this option where the borrower gets a grace period between 36 – 60 months where only the pre-EMI interest is to be paid. This loan is mostly preferred by young working professionals between 21 – 45 years of age with a capacity to increase their current income as this sort of a repayment increases with time.

b. Lower EMI repayment

This type of a home loan is the exact opposite of the delayed home loan EMI repayment, where the EMI decreases over time, during the tenure and is preferred by individuals at a later stage in life, nearing retirement. The interest in the initial years will be higher which means an individual must plan his finances well in advance.

c. Longer home loan repayment scheme

This type of a home loan extends the repayment tenure up to 65 years of age for a maximum loan of ₹75 lakhs and is normally granted to young working professionals up to 48 years of age. The interest in this type of a loan that requires a guarantee provided by India Mortgage Guarantee Corporation with an additional charge of 1 – 2 percent of the total loan.

A bank is a preferred option when it comes to home loans because the interest rates are lowered while NBFCs are equally preferred because of their flexibility but with higher interest rates. The applicant must weigh his/her pros and cons before choosing his/her loan scheme, devise a payment plan and then approach a bank or an NBFC before settling for any of the options.

Individuals savings come into play when buying a home loan. Some banks or NBFCs customize home loans according to a self-employed person’s seasonal income periods and secure repayment during that time as well. However, since savings are not sufficient for down payments today which is when you can think of alternate down payment options to self-finance your first home instead of borrowing money from family members.

HomeCapital offers you down payment assistance in the form of a personal loan which can be repaid back in 12 interest free EMI’s.

Get in touch now!

An update on the housing sales in Bengaluru

Posted on by HomeCapital Team

Bengaluru, a.k.a. the Silicon Valley of India, the IT hub, the capital of Karnataka, the place out of which many multinationals operate, the city of startups, lakes, age-old parks, dance villages and a land of architecturally splendid temples. The perfect weather and the vibe of the city. All these and many more make Bengaluru a very desirable destination to live in. In recent times Bengaluru has been the more preferred city to call home, over Mumbai and other metros. This not completely because of its panoramic beauty but also because of the number of opportunities available here.

What is the current housing scenario in Bengaluru?

The real estate market in Bengaluru got a much-needed relief after the implementation of RERA. It has gradually found ground and is now headed to an unfaltering demand in housing sales.

India’s IT capital has shown an 80% rise only in the first quarter of 2019 making Bengaluru one of the most active residential property markets in the country. A significant rise in the demand for affordable housing has also ensured a healthy market growth. This active housing sale phase took care of the unsold properties of the down phase and is now ready to add new projects to the market.

Why are people looking to purchase more houses in Bengaluru?

After encouraging government policies Bengaluru has seen some positive customer sentiment toward housing sales. With increasing commercial activity from the IT and the ITES sectors, and having more disposable income at hand, the immediate effect is seen on house buying.

According to the Bengaluru Innovation Report 2019, Bengaluru will be the fastest growing city in the world for the next 15 years and have a GDP growth rate of 8.5% up to 2035. The city is continually upgrading the infrastructure along with top-class health care and educational facilities. Also, the newer tech-enabled homes are attracting young IT professionals to invest in residential properties.

With the massive white-collar migration to the Silicon Valley, the house rentals have become steep and this only encouraged the millennial investor to buy a house while working in the city.

Demographics of this segment of home buyers

Traditionally speaking, in India home buying is almost related to a retirement plan whereby a man works all his life to enable house buying. But with the IT boom in the last decade and a much-globalized workforce to follow, we have seen a major shift in this trend.

Along with better jobs and the trend of affordable compact homes, buying a house has become viable. Hence the home buyer’s age bracket has gone down drastically. Bengaluru is now home to many youths and young couples who have chosen this city to settle down in.

Statistically speaking the demography of home buyers of Bengaluru is 52% in mid-thirties, 18% in mid-forties, and a noteworthy 21% below 35 years of age thanks to the launch of mid-segment homes.

Lack of savings for millenials

Today young millennials from the IT sector are hardly ever cash trapped. With big salaries that multiply each financial year, they usually have disposable income in hand. This brings a tempting proposition to forth of investing in real estate. But buying a house is a tall order that will need detailed calculations. Many a time the dream does not take off due to insufficient funds.

In such a scenario housing loans can be appropriated through banking and non-banking institutions. While banks would help you in getting a home loan for a part of the required amount, you would have to invest the remaining funds from your savings. At such times, when most home buyers face a shortage of funds, HomeCapital can help you in getting a personal loan up to 50% of your down payment which can be repaid to their partner lenders at no extra cost in EMIs.

Projects in Bengaluru

Housing Sales in Bengaluru have not only shown an upward trend but the housing realty has also made homes of all budgets possible. The world’s 24th most populous city is gearing up for more housing sales to meet the ever-increasing demand.

Some popular projects to look at:

  1. Habitat Eden Heights and Godrej Air Nxt Whitefield. Check these properties if you are looking for a residence at Whitefield
  2. Godrej 24 Bangalore is the property to check out as it offers 2 to 3 BHK apartments starting INR 60 lakhs. Find this project at Sarjapur
  3. Rohan Upavan is a prime upcoming property to check out by Rohan Developers as it offers apartments of various configurations such as 1, 1.5, 2, 2.5 and 3 BHK starting INR 32 lakhs. Find this project at Hennur Road
  4. Purva Smiling Willows for those looking for villas. This is the property to check out as it offers 3 to 4 BHK villas. Find this project at Bannerghatta Road
  5. Purva Zenium for luxury apartments and BlueNex technology-controlled houses head to Hoshalli where this property is spread across 10 acres
  6. Vaishnavi Serene in Yelahanka is beautifully designed and has shopping malls and offices nearby, making it a promising lifestyle destination

A guide to the issues faced by first time home buyers and the solutions to them

Posted on by HomeCapital Team

Buying your first home is a special experience that can hardly be matched by any other. But with the sky-high real estate prices, it is a daunting exercise, especially for first time home buyers. Even with aggressive saving and careful planning, we get nowhere close to gathering enough even for the initial down payment on a new house. Even if you’re eligible for a home loan, it serves to be futile if you cannot come up with the initial down payment. And the expenses don’t end here.

Stamp duty and registration charges for a new home are quite high, but these are rarely taken into consideration by first time home buyers. Then there are the documents that need to be submitted to the bank for a home loan, on time and with proper signatures wherever necessary; all the while ensuring that the down payment is done on time. It seems like you have to jump through a lot of hoops to buy your own home. And yet, the down payment remains the biggest issue. How do you come up with enough down payment to fund your new home?

With down payment assistance of course! HomeCapital understands this crucial issue and steps up with up to 50% of your down payment as an unsecured interest-free personal loan. Add that to your savings and suddenly you have enough to make that all-important down payment! Before we find out what that is, let us take a deeper look at the potential issues that plague first-time home buyers and how they can be possibly avoided.

Issue 1: Not saving enough

This is a common issue that arises due to 3 main reasons:

  1. An ever-changing property market
  2. Changing and evolving buyer expectations
  3. Not accounting for the high stamp duty and registration charges

The property market almost always appreciates and real-estate prices steadily increase. This also inflates the stamp duty and registration charges. Most first-time homebuyers do not have the foresight to plan for this while saving for their homes. Add to this the possibility of home buyers’ changing expectations, and the savings will fall short. Always do your research and factor in various eventualities before you start saving for your home.

Issue 2: Unhealthy CIBIL score

Most people are not even aware that something like a CIBIL score exists. It scores your creditworthiness and is the first thing banks and financial institutions check before granting you any loan. Whenever you take a loan or use a credit card and not repay them back in time, you end up degrading your CIBIL score. If your score gets really bad, you might not be able to take a new loan, which includes a home loan. To maintain a healthy CIBIL score, always pay back your loan and credit card EMIs on time. Preferably, try not to have any other loan running while applying for your home loan. It will increase your chances of getting your home loan sanctioned by manifold.

Issue 3: Not doing enough due diligence

When buying a home and applying for a home loan, there are a couple of due diligence that needs to be done, especially for a first-time home buyer. The first thing to check is the builder’s reputation and their track record of completing projects on time. If your builder promises you the delivery and possession on a certain date, hold them to it. Many-a-times, it so happens that your home loan repayments start and the project gets stalled. This is one of the worst-case scenarios for any home buyer. The second thing you need to check is the reputation of your lending institution. If an offer seems too good to be true, more often than not, it turns out to be a dud.

Issue 4: Not comparing offers from different lenders

This is another classic issue faced by first-time home buyers. In their anxiety to close the deal as quickly as possible, most people simply do not do enough research. Often going with the first offer loan offer they receive; they potentially miss out on some great which could’ve been availed with a little bit of research. Make sure that you check with as many lending institutions as you can before settling on the one that offers you the best repayment terms. You can even compare home loans with easy-to-use online tools that lay it all out in front of you in the simplest possible terms.

Issue 5: Making a small down payment

Most people tend to pay the least amount of down payment as far as possible because it seems like a big upfront cost. In a way this makes sense, but it is far from ideal. In reality, the bigger the down payment you make, the lesser is your long-term financial load. Try to minimise the amount of loan as much as you can and your finances will thank you in the long run. But what if it is simply not possible for you to come up with a substantially large down payment? Which brings us back to down payment assistance.

What is down payment assistance?

At its core, a down payment assistance program addresses a critical issue faced by a first-time home buyer, coming up with the maximum down payment. What it does is it simply finances a part of your down payment with an unsecured loan. As of now, HomeCapital is the first and the only company offering down payment assistance with interest-free credit. With this assistance, you can save money upfront to use it later while furnishing your home. What’s more, HomeCapital has partnered with lending institutions as well as builders to streamline the entire process for you. So, when you visit a builder to book your home, all the necessary formalities are taken care of in one visit.

Features of HomeCapital’s Home Down Payment Assistance Program

  • HomeCapital provides the down payment assistance in the form of an unsecured, interest-free personal loan.
  • The tenure of your HomeCapital loan is 18 months regardless of the amounts involved.
  • You repay the down payment assistance loan before your home loan EMIs start, which does not over-burden you financially.
  • HomeCapital’s repayment plan does not affect your home loan eligibility.
  • There are no hidden charges or lien on the property.

Benefits of HomeCapital’s Home Down Payment Assistance Program

  • With HomeCapital’s down payment assistance, you get to hold on to a big chunk of your money, which is then repaid in installments.
  • When you receive down payment assistance, you can buy your house earlier, without having to wait any further.
  • You can buy the home of your choice when your upfront payment is bolstered by the down payment assistance program.
  • With HomeCapital’s Home Down Payment Assistance Program, you can actually save the money that you would’ve had to pay as interest on any other loan.

Eligibility criteria

There are certain criteria you need to fulfill in order to be a part of this program. You need to hold a steady job with a reputed company and you must satisfy all the credit standards of partnering financial institutions. In addition to your existing financial obligations, financial track record, income levels also play an important role in determining your eligibility criteria. Also, you must have a healthy credit score as it ultimately determines your eligibility for the Down Payment Assistance Program.

So now be hassle-free and buy your dream home, and let us also help you with your down payment requirement.