Claim Tax Deductions on Home Loan

No matter how much we hate taxation, we have to live with it.

No matter how much we hate taxation, we have to live with it. We all hate the substantial amount of money that is deducted from our salary every month as tax. What we even hate more is the money deducted as home loan EMI. Thankfully, home loan allows you many substantial tax deduction. As per the financial year 2017-18, the upper limit on tax deductions on home loan is set at Rs 2,00,000.

If you are a working professional, you don’t directly need to submit any sort of documents to income tax departments. You can submit them to the employer who will adjust the TDS (Tax Deducted at Source) based on the documents you have provided. This gives you entire year’s time to know your tax liabilities.

In case you are hiring a charted accountant to file tax returns, you need to provide them with all the necessary documents.

List of Documents You Need to Claim Tax Deductions on Home Loan

  • source site Borrower Details: It is necessary because only the borrower or the co-borrower are eligible to claim tax deductions.
  • http://globalarchaeology.ca/2017/05/sildenafil-citrate-safe-buy-free-doctor-consultations/ Interest Certificate: Specifying the Principal and Interest details
  • http://smartmedia.com.au/?p=313 Ownership Details: Only owner or the co-owner of the property can claim tax deductions. You cannot claim deduction on entire property as the amount deducted will be proportional to your share in property
  • Construction Completion Certificate: This is needed as you are eligible for tax deductions only after the construction is completed.

You can also claim pre-construction interests, payable in five equal instalments starting from the year when the construction is completed.

Calculate your income from the house

The tax deduction for a self-occupied home has an upper limit of Rs 2,00,000. There is no upper limit on the deductions you are eligible on the interest, if you have rented your apartment. Here are the steps for calculating your tax deductions:

  • Gross Value of the property
  • (Less) Municipal Taxes- if paid during the year
  • (Less) Standard Deduction (30 percent of Net Annual Value= Gross value minus Municipal Taxes)
  • (Less) Deduction for Interest on Home Loan
  • You will arrive at the “Income from House Property” figure

Tax Deductions on Repayment of the Principal Amount

It is eligible for tax deductions under Section 80C, the upper limit on tax deductions of principal amount repayment is Rs 1,50,000. This limit the total of money also invested in Public Provident Fund (PPF) account, Senior Citizen’s Saving Scheme, equity-oriented mutual funds, tax-saving fixed deposits, and National Savings Certificate.

However, you can claim a tax deduction on this only after the construction is complete.

Choose Your Home Loan Tenure Carefully

Taking a home loan is a big step, and you want to be sure of what you’re getting into. So conduct a substantial amount of research and learn everything you can about home loans before even approaching a lender.

With escalating real estate prices, home loans are a popular source of finance for people looking to purchase their dream abode. And while we enjoy some freedom in selecting the ideal home loan, it is important to remember that the ultimate decision on the amount and tenure of your loan will be determined by your bank.

That being said, of course you will have some control over the tenure of your loan repayment. And it is imperative that you contemplate your home loan tenure carefully before you apply for one.

buy diflucan over the counter What is Your Monthly Income?

Your monthly income is the most important factor in determining the tenure. As a rule, your EMIs (the amount you spend every month to repay your loan) cannot be higher than 50% of your monthly income.

So let us say you earn Rs. 50,000 every month and you’re applying for a loan of 24 lakhs. If you choose a tenure of 20 years, you will be paying an EMI of around Rs. 24,000, which is roughly 50% of your monthly income.

In this case, you will have to choose this plan as your monthly income is too low to pay a higher EMI.

What to Keep in Mind

When choosing a home loan tenure, there are several factors you need to keep in mind.

  1. Interest Cost

Your EMI (equated monthly installment) is the amount you give the bank every month in order to repay the loan. It consists of two components – the principal (a part of the actual loan amount) and interest (the cost of taking a loan from the bank).

If you opt for a longer tenure, your EMIs will be substantially lower. However, you will end up paying a lot more money in the form of interest over time.

On the other hand, if you opt for a shorter home loan tenure, your EMIs will be a lot more, but most of the money will go into repaying the loan, and you’ll spend a lot less on interest.

  1. Dependents

Another factor to consider is whether you have dependents in your family like children or aging parents. When you’ve got other financial responsibilities to take care of, it’s best to take a longer home loan tenure with a smaller EMI amount.

This way you can easily pay the EMI every month and have enough money left over to take care of your family.

If you live alone or with a working spouse, it’s best to take a shorter tenure with higher EMIs so you can clear the loan as quickly as possible.

  1. Monthly Income

This is quite obvious, but you need to be earning enough to repay the loan that you’re planning to take. Select a loan tenure based on your monthly income and expenditure. If you’re earning a large sum and have enough surplus left over after your expenses, then it’s best to opt for a shorter tenure and clear the loan amount quickly.

  1. Credit Rating

Banks will inspect your credit rating before agreeing to grant you a home loan. So be sure to make all your payments on time and avoid writing cheques when there is the possibility that they may bounce.

With a higher credit score, the banks are sure to grant you a lower rate of interest on a home loan. This reduced interest rate will grant you greater financial flexibility, giving you more control while determining your home loan tenure.

  1. Your Age

Younger borrowers often have a higher chance of receiving a home loan for a longer tenure, as they have more working years left. Banks want to ensure that you will be able to repay the loan before you retire.

This means that if you’re availing a home loan at 45, your home loan tenure cannot extend beyond 15 years. Some banks recognize the retirement age as 65, but most lenders differ in their opinions of the retirement age.

Weigh Out All Your Options

Taking a home loan is a big step, and you want to be sure of what you’re getting into. So conduct a substantial amount of research and learn everything you can about home loans before even approaching a lender.

Also, you want to approach various lenders and figure out the interest rates they offer. This way you can select the most cost-effective option. Happy home-loan hunting!

 

 

Pune Real Estate Market Shows a Growing Trend Despite National Low

In a recent study of real estate market by PropEquity, Pune has emerged as one of the top cities to invest in India, next only to Bengaluru.

The real estate sector is the second largest employer in India next only to agriculture and is expected to grow by nearly 30 percent over the next decade. The Indian real estate sector which comprises of sub-sectors such as housing, retail, hospitality, and commercial is expected to touch US$ 180 billion by 2020.

The housing sector alone contributes 5-6% to the country’s GDP and is well complemented by the increasing demand for office space in urban and semi-urban areas.  It is also expected that real estate will incur more NRI investments in both long and short-term in the next decade.

Pune is expected to be one of the most favoured real estate investment destinations for both Indians and NRIs alike.

Growth of Pune Real Estate

In a recent study of real estate market in India conducted by PropEquity, Pune has emerged as one of the top cities to invest in India, next only to Bengaluru. It has been a rough period for Indian real estate as both the property occupancy and sales have drastically dropped across India, especially in the Northern parts of the country. There has been a drastic reduction of 27% in Delhi-NCR real estate market value in last 12 months.

Pune is the only city in India that has maintained consistent growth in real estate despite the bad market condition and has seen an appreciation of 25 to 30 percent every year. In fact, there is a heavy demand for residential properties in Pune with the real estate sector recording compound annual growth of 14 percent. To fulfil these requirements, a number of residential projects are upcoming in areas like Keshav Nagar, Wakad, Balewadi, Ambegaon, Hinjewadi, etc.

The eastern belt of Pune has also seen a massive growth thanks to its proximity with IT parks and airport.  With the increase in property price in Bangalore, Gurgaon, Chennai and Mumbai, Pune has now emerged as a preferred destination for IT companies. And the best part is that the development in Pune is happening in a phased and planned manner thus showing great potential for future expansion

According to a recent survey by Magicbricks, despite Demonetization last year, Pune has shown an annual growth of 3.4%.

While most units fall in the Rs. 30 Lakhs -Rs 1 crore price bracket, there are luxury houses worth 20 crores as well.

Awesome weather, affordability and quality of living are few other factors that have resulted in improving property prices in Pune. As per  “Mercer 2015 Quality of Living” rankings, Pune is ranked 145 which is significantly higher for the quality of living than the country’s traditional metros such as Delhi and Mumbai. It doesn’t come as a surprise when not only people in India but NRIs also invest in Pune Real Estate market resulting in the upward growth trend.

 

 

Ultimate Emergency Contact List You Should Have on Fridge

Stay happy, Stay safe!

When we are kids, we used to memorize all the important (to us) phone numbers. And phone book was the go-to place for information. There was always a front page dedicated to emergency numbers. A copy of emergency contacts was placed on the fridge door.

Times have changed since then and so have the way used to save phone contacts. Now, we have everything stored in our phone book and are so easily accessible that we don’t even bother to memorize important numbers

However, with security come limitations. If you have a number stored in your phonebook, there is no way anyone can access it unless they know the lock code of your phone. Even in case of emergencies. Therefore, the age-old practice of keeping emergency phone numbers on the fridge is back again. If you are a homeowner, here is the ultimate emergency contact list for your fridge:

Police Department Local Number

Of course, you can dial ‘100’ to reach police. However, in case the number is unreachable you need to have the non-emergency number for your area. Or may be the number of on-duty offices

Local Fire Department Number

Apart from dialing 102 for fire emergencies, fire department have a wealth of information and also help if someone is looking for community training on fire control

Plumber

Broken or leaking water pipes can be any severe. Having the number of plumber handy is a must to ensure your home doesn’t become a wet mess in case of emergency

Power company 

A useful number to have on your phone to report power outages, voltage fluctuation or any issue with the bill

Family Doctor

A person you can reach out to in case of medical emergencies

Nearby Hospitals

In fact, it is great if you can have at least 2-3 nearest hospital numbers listed

Next-door Neighbors

They are the closest person who can immediately reach your home in case of emergencies. Always keep in touch with your neighbors

Co-workers (of all the working partners)

The go-to person in case your phone number is unreachable. It also comes helpful when you are planning a surprise party without informing your partner

Animal Control

Unwanted intruder in your home? Or stray dogs, cats or monkeys causing havoc? Animal control can come to your rescue;

Insurance Agent

The person you need to reach out to in case of an accident or home damage. Some companies assign a special relationship agent to all their clients. List his number as well.

Poison Control 

Has your child accidentally eaten the rat-kill? Poisoning emergencies can happen to anyone and therefore, a number of the regional poison control center should be on your emergency contact list.

Locksmith

Don’t forget the locksmith. A good locksmith contact is must for unforeseen circumstances.

It is also important to categorically list these number along with proper mention. Save few most important ones in your phone’s emergency contact list and have a copy of all this in your Gmail too!

 

Stay happy, stay safe!

Debunking Top Myths about Real Estate

Real estate has been through a really rough phase. While the market has slowly regained its footing back, there are lots of misconceptions that are still being passed around among buyers and sellers.

Real estate has been through a really rough phase. While the market has slowly regained its footing back, there are lots of misconceptions that are still being passed around among buyers and sellers. While some of them have a hint of truth, others are outright false. Let us set the record straight by debunking the top myths about real estate.

You need a lot of money to start

One of the biggest myths about real estate investing is that you need a lot of money to start. This is not true. If you take some time to learn the intricacies of the real estate trade, you can get started as a real estate investor with very little money. The key is to begin slow and know what to do after you have the home locked up.

There are no opportunities in small markets

Don’t fall for the real estate myth that says that you have in a hot or an up-and-coming market to make money out of your real estate investment. You might feel safer to invest in a property located close to a posh area, there are investors successfully investing in smaller markets too. In Pune, micro markets like Loni Kalbhor (Pune-Solapur Highway), Ambegaon, Undri & Pisoli are performing exceptionally in property appreciation terms. Whether you are lending, building or re-selling, there are always bigger opportunities to be explored in the small untouched area. The key is to be vigilant enough to identify these markets.

Every penny you spend on home renovation adds into property’s value

Many people spend a lot of money on remodelling the house before putting it for sale. While home improvement projects increase property’s worth to some extent, it might not be in accordance to the money you have spent. Renovating a home before moving in is a great idea but before moving out, not so great!

You should price your home higher to leave room for negotiation

This is far from being true. If your home is overpriced, a lot of potential buyers may back out before making it to the negotiation stage. A home which is well priced, to begin with is more likely to sell quickly. Ask your real estate agent for a comparative market analysis and determine a reasonable price for your home based on other homes in that area.

A house that doesn’t have trendy features won’t sell

Many people believe that in order to sell your house quickly, it must have the latest and trendy features that buyer wants. While having latest features in the house is definitely a plus, not having them doesn’t make your property a bad option.  Not every buyer has the same set of demands and you will eventually find buyers who will be happy with what your house has to offer.

 

 

Keshav Nagar: Most promising location for first time Home Buyers?

Keshav Nagar and areas around it are undergoing major infrastructural changes. This will greatly appreciate the property rates in the coming years.

Keshav Nagar started coming in the limelight of Pune real estate in the late ’90s. Due to the fact that it is still under Gram Panchayat and therefore outside the official municipal limits, property prices have remained rational until now. Recently, PMRDA (Pune Metropolitan Regional Development Authority) took charge of 100 fringe areas around PMC and has been taking care of all the infrastructural development in these areas which also includes Keshav Nagar.

Through the following lines, we will explore what all does Keshav Nagar have in store for the first time home buyers.

Proximity

  • Keshav Nagar is located between Manjiri on the East and Ghorpadi on the West, and is close to Pune Camp. Its closeness to Koregaon Park, a cosmopolitan locality, is an added advantage.
  • Thriving IT hubs of Hadapsar, Magarpatta, Kharadi, and Kalyaninagar are all located nearby, thus increasing Keshav Nagar’s popularity.
  • Reputed schools like The Bishop’s School, The Orbis, The Lexicon School, City International, Kendriya Vidyalaya, etc. offer high quality education supporting children’s academic growth. All of these lie in a reachable radius which reduces the commute time for children giving a choice to pursue extracurricular activities.
  • An umbrella of reputed hospitals like Columbia Asia, Medipoint Hospital, Noble Hospital, Inlaks and Budhrani Hospital, Ruby Hall Clinic, Apollo Jehangir Hospital and etc. assures you of healthy living.
  • Major malls such as Amanora Town Centre and Seasons Mall on Hadapsar-Kharadi Bypass, Phoenix Market City on Nagar Road are located close by offering numerous recreational activities.

Connectivity

  • Keshav Nagar, situated at an approximate distance of 9 kilometers from the Pune Lohegaon Airport, is an intelligent option for a frequent flyer.
  • The Pune Railway Station is about 8 kilometers from Keshav Nagar while the Hadapsar Railway Station is roughly 2 kilometers away.
  • Pune Mahanagar Parivahan Mahamandal Limited (PMPML) buses ply from Keshav Nagar to Pune Airport, Railway Station, Swargate and Hadapsar.

Affordability

In terms of residential property value, Keshav Nagar benefits majorly from its advantageous proximity to Koregaon Park, Kalyaninagar, Kharadi, Magarpatta, Mundhwa, and Camp. Keshav Nagar is one of the increasingly rare locations where purchasing a budget home in such a strategic location in Pune is still possible. Currently, Keshav Nagar is primarily a destination for mid-income and upper middle class home buyers, with a variety of new residential projects and resale options available to choose from.

Extra benefits

Most of Keshav Nagar was farmlands quite close to the Mula-Mutha River. While residents of nearby localities are supplied hard water, Keshav Nagar enjoys underground water that is potable. Also, the abundant green cover of Keshav Nagar offers a pleasant relief from the concrete jungles of the city.

Future developments

Keshav Nagar and areas around it are undergoing major infrastructural changes. This will greatly appreciate the property rates in the coming years.

  • A proposed flyover connecting Kharadi to Keshav Nagar aims to cut down the otherwise 6 kilometres distance to barely 2 kilometres.
  • The 161 kilometres Ring Road to be built by the PMC, PCMC and PMRDA will disperse off traffic in Keshav Nagar besides benefitting all other areas of Pune.
  • The 22 kilometres riverside road along the Mula-Mutha River will not only help decongest the traffic across the city but also connect Mundhwa, a stone’s throw away from Keshav Nagar, to the neighbouring Central Business District (CBD) of Pune.

For prospective buyers, Keshav Nagar has a range of choices when it comes to properties. From residential plots to independent houses, villas and builder floor apartments, the locality has it all. If you are planning on an investment, Keshav Nagar could be a promising destination!

Achhe din for East & South Pune real estate market?

With the announcement of Pune International Airport, passenger train to Daund and construction of outer ring road – the eastern and southern regions of the city are going to be in focus.

The real estate market in most cities seems to be going through a sluggish phase, but Pune continues to show stable and sustained growth. Thanks to the increasing demand for homes and commercial spaces owing to growth of IT sector in the city. With Pune finding its name included among 20 smart cities, this will go a long way in giving a huge boost to the image of this bustling city. And in times to come it is best to keep a watch on the real estate development in the East and South regions – as this is where the next phase of buzz and development is slated to take place.

With the announcement of Pune International Airport, passenger train to Daund and construction of outer ring road – the eastern and southern regions of the city are going to be in focus. What makes Pune an edge over other cities is its proximity to the financial capital of the country – Mumbai. Another contributing factor is its thriving educational, engineering and automobile scene. With the popular Mumbai-Pune Expressway things have become all the more lucrative for those looking to invest in tier two cities like Pune.

Pune today stands as one of the most sought after destination for homebuyers as well as those looking for commercial set-up. Those looking for land at affordable rates can invest in east or south location as prices will be less comparative to other areas.

The key growth driver for East and South Regions are as follows:

Pune International airport: The existing Lohegaon airport could only handle limited traffic currently. With announcement of a new international airport by CM Devendra Fadnavis which is to be developed 15 kms south of Pune in Purandar will help in serving the purpose. Located near historic fort Purandar – the proposed airport would named as “Chhatrapati Sambhaji Raje International Airport

pune-airport-759

Located on the south of the city, the proposed airport will be connected with six different routes including national highways 4 and 17. There will be a special ring-road connecting major industrial establishments with the proposed airport from Hadapsar & Loni Kalbhor. The new airport is expected to serve the Pune Metropolitan Area and will be the gateway of Pune and western Maharashtra to the rest of the world.

 

Outer ring road – It was in 2007 that the proposal to develop Pune Ring Road was taken by the late chief minister of Maharashtra Vilasrao Deshmukh. The idea is to help in diverting 5739994091823130970_orgthe passing-by-traffic from the outskirts. Vehicular traffic from highways such as Mumbai-Pune-Solapur highway pass through the city, will be diverted on to ring road. This would ensure that they don’t enter the city and cause traffic chaos.

This ring road will also offer better connectivity to the important areas in the city & to the new Pune International Airport for residents of Hadapsar via Loni Kalbhor. It will act as an encouraging factor for those looking to invest in south or eastern regions of the Pune.

 

Pune- Daundh passenger train & Metro:  The passenger train connecting Daund with Pune which travels via Hadapsar & Loni Kalbhor will reduce the travel time for people living in Loni Kalbhor and Urli to reach Pune. With the phase 2 of metro which is supposed to connect Katraj/Ambegaon and Hadapsar is most likely to be extended up to the new airport in Purandar. This two rail projects will make eastern & southern regions most sought after for IT & manufacturing investments.

So, for all those eyeing to buy a new house or property they should consider the South-East region of the city. It is one of the fastest growing and developing areas. With excellent connectivity to major areas and well-known locations, the prices here are lesser than compared to other areas.

 

A checklist for first-time buyers

Buying one’s first home can be a trying experience for most first-time buyers. Getting confused or feeling lost at such times is only natural, unless you have a ready reckoner close at hand. Today we take you through all the information you need to have when you are buying your first home.

Get online

In this highly digitised world, the search for everything from groceries to gadgets happens online and real estate is no different.

Most buyers in the 25-35 age group begin their search online. The presence of a number of portals such as magicbricks.com, 99acres.com, housing.com, makaan.com has made it easy to filter searches according to your requirements, budget, and location preferences. It is a good idea to go through all of these portals and shortlist properties that you would like to see personally.

Once you have zeroed in on the properties that you would like to visit, probe further and read up on the developer, its reputation.

Check out things like delivery time, payments, and delays it has been responsible for.

Use your networking skills to reach out to recent home buyers in the properties that you are interested in and get their opinion as well.

Making the choice

While visiting the shortlisted properties do a thorough check of the neighbourhood.

If you have young children or hope to have a family in the near future, check out education facilities in the area.

Proximity to hospitals, schools and colleges, market areas, amusement and entertainment options should be considered.

The other important factor to consider is the distance from your workplace, railway stations, and airport.

Budget requirements

The first thing you need to remember while buying your first property is that you should not under any circumstances overshoot your budget. It’s human nature to be aspirational, but make sure that your loan does not become a burden for the rest of your life.

Ideally if you are planning to buy a house, you should have been saving up for its down payment at least three to five years ahead.

For young people who harbour dreams of owning a home, start investing in equities in order to get the best inflation adjusted returns.

If you do not have the time or expertise to invest in equities by yourself, it is best to take the mutual fund route and link your investments to a goal like down payment of your first home. This will keep you focussed on your goals and help you make disciplines investments towards reaching your aim fruitfully.

While saving or investing for a house, you also need to bear in mind that you need to maintain a good credit history as your credit score will be taken into consideration, when the lender assesses how credit-worthy you are.

Maintain a good track record of servicing your previous or current loans and make it a habit to repay all your credit card outstanding within the billing cycle.

Further, when you are taking a home loan, make sure that its EMI does not exceed 40-45 per cent of your monthly income.

Aim to increase your EMI repayment over the tenure of your loan as your capability rises with an annual increase in your salary.

 Maintain a contingency fund that will take care of your home loan EMI for at least 3-6 months in case your cash flow is interrupted by an emergency.

Necessary paperwork

Once your financing needs are taken care of, it is time to be aware of your rights as a prospective home buyer. The recently passed real estate Bill safeguards your rights as a consumer and ensures efficiencies in all property related transactions with the mandatory registration of all projects with local governing bodies and the establishment of the Real Estate Regulatory Authority (RERA) that is expected to ensure timely completion and hassle free handover to the end customer.

Ensure that the following documents are in order:

– Sale deed/title deed /Mmther deed/conveyance deed

– Building plan sanctioned by statutory authority

– Layout approval plan sanction

– NOC from electricity department/pollution control board/water works/ airport authority

– Supplementary agreement / ratification deed (if any)

– Allotment letter from the builder/co-operative society/housing board/BDA.

– Approved plan of construction/extension and license for construction.

– Detailed cost estimate/valuation report from chartered engineer/architect (if applicable)

Post-possession checklist

Storage: All documents related to your property purchase must be photocopied, watermarked, and digitised. It is advisable to keep at least three copies of the same at three different locations.

Transfer: Start the paperwork related to the transfer of name for electricity and water meters if applicable, transfer of society shares and finally transfer of name for property tax records in your local municipal body.

Update: Finally update all your official documents such as passport, bank documents and the likes with your new address.

While you enjoy your home and make memories in it, do not forget to live up to your commitment of making timely repayments on your home loan.

This article first appeared in The Hindu.

6 Ways To Boost Your Home Loan Eligibility

Buying a home is a significant undertaking. It requires meticulous research, careful planning and thorough checking before the buyer can be at peace. One of the major aspects of purchasing a home that worries buyers is with respect to taking home loans for the same.

Irrespective of whether or not you can afford the purchase with your savings (which is rarely the case), one is usually advised to take a home loan to spread the commitment over a few years. What then follows is nerve-wracking analysis of each bank’s home loan and deciding on the right one. In the midst of all this, it is also important to ensure that you can maximize your eligibility for a home loan or qualify for the maximum amount of home loan possible. In the midst of all this, it is also important to ensure that you can maximize your eligibility for a home loan or qualify for the maximum amount of home loan possible.

So how can one improve home loan eligibility? Here are some ways:

Increase loan tenure

This is probably the oldest tactic in the book. The logic is that when one increases the tenure of the loan, the EMIs are reduced. Lower EMIs then boost the borrower’s loan eligibility. However, this needs to be thought through based on each individual’s circumstances and preferences

Step-up loan

In this option, individuals can opt for step-up loans which essentially mean that the EMIs in the first few years will be low and then consequently increased for the remaining period. This again lends to higher home loan eligibility when calculated with the lower EMIs in question.

Clubbed income

 Loan eligibility automatically increases if you can join forces with a family member and take the loan. This means that both of your incomes will be considered as opposed to just your income. Especially in the past decade, this has become a common solution with women also working and contributing to the family finances

Variable pay

One mistake that a lot of people make when calculating their home loan eligibility is not taking into account the variable aspects of their pay such as performance-related income and other monetary perks. You may notice that once you include these components as well your loan eligibility is instantly boosted

Prepay existing loans

If at the time of approaching your banker for a loan, you already have a loan in your name (i.e. car loan, personal loan etc.) it could bring down the amount your eligible to borrow for the home purchase. One way to fix this is by pre-paying any existing loans you have in part of in full

Employer-bank offers

Banks sometimes have tie-ups with large multinational corporations wherein they offer the employees of said corporation some benefits to taking a home loan. These could be in the form of lower interest rates, waiving of processing fee and so on. It would be prudent to check with your banker if any such offers are available to you to utilise. Given that RBI reduced the interest rates last year, it is likely to encourage a lot of prospective buyers.

This article first appeared in The Hindu.

Reasons For Home Loan Rejection

A home loan is one of the best options, to arrange the funds needed for buying a home. Generally, it is easy to avail of a home loan, if the applicant has all the documents in place and has a good credit history. However, banks may still reject a home loan application. Some important reasons for rejection are:

  • A bad credit score: Credit score is a significant deciding factor in sanctioning home loan. Make sure you have a good credit score in place before applying for the loan.
  • Bad credit history, which may include a loan settlement in the past that is reflected in the credit report.
  • The project is not approved by the bank.
  • The home loan application, is made for a project that falls in a restricted area.