Is It Right to Switch Your Home Loan As Banks Cut Rates?

The Reserve Bank of India often slashes its repo or lending rate by certain base points. This makes it possible for the commercial banks in India to lend at cheaper interest rates. This has an effect on consumers who have availed a loan.

It could turn out particularly advantageous if you've been paying a higher interest rate. You can switch to lenders offering the same loans at a cut rate, simply by asking for a Home Loan transfer (Balance Transfer).

Realize the ways in which you can use this rate cut to enhance benefits on your existing Home Loan.

What is a Repo Rate?

The rate at which the RBI lends money to banks for a short period is referred to as a repo rate. The RBI when wants to make it costly for banks to borrow money, it raises the repo rate. On the other hand, while The RBI wants to make it inexpensive for banks to borrow money, cuts the repo rate.

How Do I Make a Switch?

Most banks start reducing their interest rates on lending with a cut in the repo rate and hence, the first step for you would be to approach your own bank (existing financer) and bargain for a lower interest rate on the amount that you have borrowed. If the financer agrees and lowers your interest rate from (say) 11 % per annum to 10.25% per annum, the savings you enjoy would be much higher if compared to what you pay at the present. Nevertheless, if the negotiation does not work, you can get in touch with a new lender offering a lower rate. By this, you may boost up your savings in the coming years. Making a switch would also guarantee that the amount you pay in the form of Equated Monthly Instalment (EMI) on your Home Loan also gets reduced.

You can apply for Balance Transfer (Home Loan transfer), a process by means of which the balance of your Home Loan will be transferred to the new lending bank.

The essential thing to keep in mind here is that a switch is not required just because the interest rates have lowered. You need to consider; by now, how much you've spent towards your existing loan. If you just availed a loan, it is better to make a switch at the initial stage. This way, it is easier for you to achieve any every benefit that may arise because of rate cuts. No matter how little you can bank through a switch, it is surely s a good idea to execute for your long-term savings goals.

What Do I Keep in Mind Before Making a Switch?

Did you decide to switch your Home Loan? Well, it is imperative to scrutinize the cost and effects of the lowered interest rate on you as a consumer. If your bank is prepared to settle on a lower interest rate, you can stick with your existing financer. In such a case, you have to consider the amount you have invested in the Home Loan. This would necessitate you to compute the overall benefit that you may be achieving. For example: if you have taken a loan of Rs.50,0000 on an interest rate of 11.50%, but bargain the same interest rate down to 10.25%, you can actually save over some lakhs.

It too makes a difference if you confirm with the bank ahead of time about the interest rates difference offered to men and women. Many banks offer a female-friendly plan. In such a situation, a shift may not be required whatsoever.

Conversely, if your present bank does not cut the rates, and you find yourself paying a higher interest rate and you suppose that better opportunities exist, then you are recommended to go for a switch. The final initiative is to use the decreasing interest rates and enjoy savings.

Key Points to Remember Before Finalising Home Loan Transfer

• Calculate and analyse the cost benefits and try to negotiate the interest rate with your existing bank for the term of the loan
• If your existing scheme offers you a better long term saving plan, continue with it
• The sooner you can transfer the home loan, the better the opportunities are to bank more money
• Do your study well and evaluate your savings

Home Loan Transfer: Is it Helpful?

As Home Loans normally involve a large sum of money, reaping advantages of rate cuts seems a good break. With the interest rates reduced, there are great chances to either reduce the EMI or the tenure of the loan. A Home Loan switch would be advantageous if you still have a long term to go, rather than when most of the period is serviced. It is like applying for a new loan all over again, consequently, you will have to consider all the aspects before initiating a switch.

Well, negotiating for a lower rate is a definite way to earn benefits over a long period of time. The rate cuts may also help you to re-evaluate your saving capacity, and help you realize how much you are truly investing on your Home Loan.
Enjoy maximum benefits!

Transform Your Dreams Into Reality with Ultra Modern Apartment

The expectations that today’s young generation has from an apartment is not limited to just having four walls and a roof. They want the property that they buy to be excellent in all aspects. Here are some factors that the buyer today expects from a residential project. 

1. The size of the apartment:

While opting for the size of the apartment one will surely take into consideration factors like budget and the size of the family. Obviously, people want spacious apartments at affordable rates. Usually, home seekers with an average family size will opt for around 1000 sq ft carpet area.

2. Closer to nature:

With the problem of pollution increasing, day by day people looks out for properties that have ample greenery around it.  Buyers normally opt for complexes which are spread on large acres of land. There should be plenty of open space and lots of trees around it so that people can have fresh air to breathe. People also want their homes to be away from the noise pollution. The location of the project has to be such that there are no sounds of cars honking but only soothing sounds of birds chirping. The project must offer peace of mind and serenity to the buyer.

3. Good connectivity:

Though buyers today want their homes to be nestled in the heart of nature at the same time they want the project to be well connected with the city. The important parts of the city need to be accessible easily. There has to be a good provision of public transport like rails, buses, metros, taxis etc. Hospitals, schools, colleges, banks, marketplace etc need to be close by. People are giving preferences to those huge residential projects which have these basic facilities within the complex itself.

4. Construction quality:

Buyers today will not compromise with the quality of the construction. Good quality material is a must. The design of the building has to be seismic resistant. The flats must get plenty of sunlight and must have proper ventilation. All the plumbing and electrical fittings have to be branded and of superior quality.

5. Amenities in the apartment:

People will not just settle for a flat with doors and windows. They want the best amenities. The bathroom must have branded fittings. Some builders offer special amenities like a modular kitchen, provision of RO water purifier, air-conditioners etc. The high-end apartments have more to offer like smart lighting which can be controlled remotely through your smart phone. Generator back-up, superior quality paints and tiles, video door phone, dry balcony etc are mandatory amenities which have to be made available by the builder by default.

6. External amenities:

An ultra modern apartment has to have the best external amenities. Clubhouse, garden, jogging track, kids play area, swimming pool, temple and sitting area for senior citizens, community hall, facilities of indoor games etc are a part of the external amenities that a housing project is expected to provide. High-speed elevators, ample parking space, provision of CCTV cameras and proper security arrangements are also an essential part of the amenities. Provision of fire extinguisher, fire alarm, two staircases etc is also essential for the security of the residents. In addition to these amenities, these days lots of importance is being given to the concept of water harvesting. This is a good sign especially with the problem of water shortage being rampant in several parts of the country.

People these days dream of an apartment which is well-connected and is located away from the hustle-bustle of modern life. A spacious apartment with good ventilation and ample sunlight is a must for most buyers. The project has to have superb modern designing and outstanding construction quality. The project must have all the required internal and external amenities and proper arrangements of security. Ultra modern projects which fulfil all these requirements qualify as dream homes for most buyers.

Things You Should Know About Real Estate Agents

The business of real estate is growing with leaps with more people getting involved in the buying and the selling process. Though people often feel negativity while dealing with one of those, yet there are businessmen doing business truthfully and following etiquettes.  However, you need to be aware of the frauds to invest your money in the right place. No matter the cons that exist in the real estate market, there are some who do business earnestly and try to help people. The benefits that they give cannot be overlooked and taken for granted. Hence, before dealing with them, you should be aware of the agents.

You have to select the best real estate agent for your property so that you get the maximum amount that can be paid for the property. You can even save money from advertising and list your property to listing agents. All you can do is research before stepping into the risky affair.

Who is a real estate agent?

A professional who acts as a mediator between sellers and buyers of property and tries to find sellers who wish to sell and buyers who wish to buy; is a real estate broker or real estate agent.

What does a Real Estate Agent do?

Real estate agents are well-informed about the local laws on the buying and selling of property. They are familiar with trends within the local property.

How to work with the real estate agents?

The agents usually work as a single entity or under any organisation. After being contacted, they display the details through personal websites or organisational websites respectively. The real estate agent also contacts the listing agents and tries to get the best offer for the property.

It should be remembered that the estate agents work on commission and very few of them have a fixed remuneration. Hence, once the deal is set, they might charge their commission or their fees according to the deal finalised. They make a quality deal with the best profit.

How do the real estate agents stand by you?

The most significant benefit that you would earn hiring real estate agents is a handsome amount for your beautiful property. In India, the real estate business is soaring high with the increasing buying and selling of house and properties. They with the help of their experience, get the best customers to deal with.

Keeping in mind the Indian culture, they also post advertisements in an attractive manner through magazines, hoardings and different sites. Your agent might contact with other fellow agents and find a suitable customer for the property.  They would be by side until the time they find you a suitable customer.

The agents would advise you on every matter related to the selling of the house or buying of the house. The estate agents do not even charge a single penny for the extra marketing that they do for attracting the best customer. They act as the representative to those who are interested in your property.

How are the services of the real estate agents beneficial for you?

The real estate agents are professionals and know best to make the most money. They apply their experience on the current case and give you all the suggestions that you need to follow. They have basic ethics on which they work giving you the best possible security in such matters.

Their negotiation skills are better than any layman. They know what to say and how to say to make the most out of the situation within a short span of time. They make counter offers with the customers to give the best price to the seller.
 
Since these people have a great network, they can arrange for the best customer that you could have otherwise. They use their tried and tested network of communication to find a suitable buyer for the property. They deal with the potential customers who can give the best price for the land.

Each agent has their own marketing plan and works according to it. They make a valuation of the property and then move on to fix the amount. Overpriced houses cannot be sold and low priced houses are a bad reputation for their career.

However, enjoying all the facilities would be possible only if the right agent is chosen. While selecting an agent, the professional background must be checked. The dealings that were made in the past should be checked thoroughly. Information about the agent should be taken from the clients with whom they have worked before. Preventives must be taken as there are frauds waiting for opportunities to rob money from innocent people. A little safety investigation can get you the best results.

Buying In A Spacious Township, Executing Individual’s Buying Needs

The business of real estate is quite glamorous and dynamic. Organisations come up with innovative designs to shape new buildings and meet the demands of the common people who are in search of excellent residencies with best facilities. The estate owners have become quite clever with their choice of facilities offering to the customers of their apartments.

With the advent of modernism, time has become one of the main constraints to build a super home for oneself. Busy with the daily work, the rat-runners are left with very less time to invest in home search. In the time of technological advancement, a solution to every problem is available with excellent accessibility.

Though there has been a controversy over internet-boon or curse, the rat-runners blindly confess to the advantages that they enjoy because of the internet service. The owners declare the availability of the apartments on the internet and the home searchers get their dream home. There are certain requirements which the buyers keep in mind when they desire to buy their dream home.

• Budget is an important factor for most of the people who are in search for their dream homes. Most of the people find it difficult to maintain their lifestyle. In such a case, the buyers try to buy best available homes at the cheapest price. The owners of the spacious townships built apartments in such a manner that they can be possessed by all the people with best available facilities. They try to build apartments in areas which are spacious and covered with greenery. Even if the areas are not covered with greenery, they try to plant trees and make the surrounding of the area green. They also provide facilities like gyms, club, indoor auditorium and many others. When they buyers get all the facilities at a minimal price they are ready to invest in the apartments and live with their families happily.
• Secondly, the locality of the residential building is important for the buyers. When people set out to find their homes, they usually look for apartments which are closer to the basic facilities that an individual needs. Families with children would search for homes which are near to schools and colleges. This would help them to reach the designed areas within time. Along with the facility of schools and colleges, the people are in need of good communication system from the locality of the area. If would be excellent if the areas have bus communication to important places within the city.People also search for apartments which are near to hospitals so that they can seek the help of the doctors at any hour of the day without facing the strenuous traffic. 
• The legality of the building is the foremost thing which is subject to refer at the time of buying a residence in a spacious township. The building should be deemed legalised by the government. It should also be checked whether the building is made in accordance with the laws of the state government. Moreover, the reputation of the builder should be taken into consideration. Reputation would also help in getting a loan from the bank without many problems.
• Another factor that determines the buyers’ consideration of choosing a flat is the security system of the estate. Proper fire extinguishing facilities should be installed in the big apartments so that any casualty of fire can be combatted. Guards should be posted in entrance and exit gates with proper technological gadgets so that any nuisance might be avoided within the premises of the estate. Cameras should be installed so that any uneven incident can be recorded and sorted for if required.

All of the population want to invest in their best home so that they can live rest of the life in peace. They invest their income on residencies that give the best facility to them. Hence, the estate owners must be conscious of the purchasers’ selection and portray them in their dream projects. 

Practical Vastu Tips for a Happy Home

A happy home is a desire of all, no matter of economic background. All try to maintain the equilibrium of the little mansion that they built. You must have heard of vastu and their importance in maintaining a super cool happy family.

People try to seek vastu tips from specialists to that they can make their homes a joyful one. Those who think that vastu are all superstitions; they should know that the tips have a scientific background too. All are devised after scientifically proven to bring convenience to those lives that live in difficulty.

Vastu, which can be defined as a house, is just a discipline of spacing air, earth, fire, sky and water. Practical vastu tips help people to organise their lives in a proper manner that they desire to do so. This vastu shastra helps an individual or a group of people to live a positive and satisfied life.

It is a tried and tested method which brings happiness in the environment and changes the atmosphere for positive. Behind every tips of Vastu Shastra, there is a scientific explanation that focuses on improving the life of the individuals.  Now, the ready flats where architectural reconstructions are not possible, feasible changes can help in settling the atmosphere calm.

• If the entrance of your house has an empty wall, placing a picture of lord Ganesh can give better results. This is considered to be one of the best vastu tips for home entrance. The empty wall represents loneliness and placing a picture of a god of fortune can help you to get away from it.
• If you feel your building has the boring on the wrong side, you can always place a Panchmukhi Hanuman’s picture in the south-west direction. This would yield a positive result to your house as well as individual environment.
• Searching for inner peace? You can always meditate in the north-east direction. This is one of the best Vastu Tips for homes that can bring in spirituality as well as peace in your home.
• If you are bad in planning something, you can always place a picture of scenery facing the north-east direction. This would help you to plan properly in the long-term dealings of your life.
• Depressed of problematic family relations, you can definitely hang a family snapshot facing south-west direction. It must be decorated with golden or yellow frame. This would help in developing positive attitude towards relations with the family members. The bond within the family members can also be developed and made strong by hanging a sunflower’s snap on the wall.
• You can also develop strong and connecting relation with the social beings if a picture of rising sun is placed on the placed on the east side of the house.
• One of the best vastu tips for wealth is to place a picture of a galloping horse in red colour in south-west direction. This would help in bringing a continuous flow of cash as well as bring harmony in the social life.
• Do you want to enjoy marital bliss? There are vastu tips for bedroom where you can develop a strong bond with your wife and enjoy the perfect marital bliss. Place one mattress on the bed and make your wife sleep on your left side.  Also never leave your bedrooms without proper lighting. Use light colour on the walls of the bedrooms so that there is a positive flow of energy in the room and in your relation.
• There is another tip for your bathroom too. You can place green plants as well as candles in the washrooms so that the negative energy is thrown away from the house.
• Since the kitchen is the best place of your home; you should maintain a distance between the sink and your gas.
  

Thus, believing in the shastra would help you to regain your mental peace and satisfaction as well as bring in harmony in the family life. Since it has a scientific explanation, one can try it juts for home decoration.   

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Tips to buy and sell real estate property in India

Any property deal is always something where you need to be cautious. Whether you are buying a property or you are selling the one you need to be careful. Here are some tips for those who are looking at buying a property or selling one in India.

Tips for buying real estate properties in India

• Proper planning of finances: Buying a property is a very important investment. Normally a real estate investor puts in all his savings to buy a property. Therefore, you need to check out your financial status before making the investment. You need to first see if you have any pending liabilities and also check whether your home loan will get approved. You also need to plan out how you will pay your EMI’s and whether you will be able to manage the miscellaneous expenses like stamp duty and registration, parking area charges etc with your current savings.
• Buy property as per your needs: You have to be clear why you need the real estate property in India? If you want it for your family then it is not only important to have a big house but also make sure that all the facilities like school, colleges, hospitals, market etc is in close vicinity. If you are a real estate investor who is investing to get better appreciation in the future then decide on the property accordingly. For investment purpose, you can go in for cheap properties in developing areas which will give you better profits in the future when the area is completely developed.
• The Loan is a crucial factor: Your home loan is a crucial factor. If you are confused between loans with fixed rate of interest and floating rate of interest then remember that always opt for a home loan where the rate of interest will remain constant throughout the term. The CIBIL score factor is crucial for approval of loans. Therefore have a good CIBIL score.
• Thorough searching of properties: Before you finalise a property make sure that you go through all the possible options. You can get in touch with sellers, developers and brokers for buying property. You can also check out properties online on various property portals.

Tips for selling real estate properties in India:

• Proper valuation: The first thing that you need to do while selling a real estate property in India is proper valuation of the property that you intend to sell. You yourself can do this or hire professionals for the same. You can also check with property dealers and check out the current rate in the market.
• Find a buyer: You can place advertisements, list your properties online, check with brokers and find a prospective buyer. If everything goes well and the prospective buyer likes your real estate property then you can complete the remaining formalities.
• Completion of formalities and legalities: When you have found your buyer get a no objection certificate from your building’s managing committee. Then go in for the completion of all the other formalities like registration etc.

While buying or selling properties make use of these simple but useful tips. This will help you in completing the procedure smoothly without any unwanted hassles.

How to avoid Property Fraud or Real Estate Scams in India?

Real Estate market in India has boomed over the last decade and a half. But with no set of laws in place, property scam has also increased at the same rate. Let’s discuss top 10 real estate scams in India and learn ways to avoid them.

Though investors these days are well informed, real estate scammers do not spare anyone. From rural landlords to the top corporate executives, NRI investors to HNIs everyone has suffered at some point or the other. Although there is no fixed pill that can remove all your concerns, this article is just an attempt to highlight major real estate scams in India.  Some basic information on how you can avoid property fraud.
 

Cautionary steps before investing:

Verify builder's track record

It is natural for any investor to get attracted towards lucrative schemes. But it is important to keep in mind that there is no use of such schemes when the project never sees the light of the day. You are recommended to confirm builder’s past record of delivered projects. This would help you reduce your risk.

Understand Details

There is a popular saying, “The devil is in the details”. While investing in property you must have a comprehensive transparency on documents and transaction details.

In case of an under-construction property:

It is important to ask for the Builder-Buyer Agreement before investing and check all details. Ensure that the builder has taken all the necessary approvals. Invest in a pre-launch project only when you are confident that the builder will get authorization shortly. If not, it is better to wait for sanction. Pay specific attention to understand the delay clauses and make sure that the builder is assuring a reasonable penalty in case of any delays.

For ready-to-move-in property:

Engage a proficient agent to ensure hassle-free transaction.

Verify all property papers to certify the title ownership, that if there is a loan on the property and if property taxes are paid.

Confirm Agreement to Sale and payment terms.

Don’t hurry. Stay away from taking a speedy decision. Complete your due diligence first and then invest only when you are sure that the basic criteria are met.

Ask Questions

If you have any uncertainty, enquire your agent or the marketing team of the developer. For e.g., if the builder says that they get approval, ask for the approved layout or ask for a copy of approval application. This is important if the property is at pre-launch stage. You should not regret afterward for ignoring minor details.

Take Professional Help

In case you do not have the proficiency to carry out due diligence on the property, you are advised to look for professional help from a real estate specialist or a legal counsel. You can save lakhs of rupees that you will incur if your project is delayed or never takes off.

Get Assurances in Writing

Builders assure star and moon in their brochures. On the other hand, if you read the fine print, they will have a disclaimer mentioning that plans, images and amenities are only indicative. The builder will give you oral assurances, even during the construction phase; practically they would have no meaning. Hence, it is essential that you get everything in writing. Ask them to correspond with you only through their official email id or giving in writing on their letterhead.

Choose Bank Approved Projects

Banks carry out their own due diligence before authorising a project. So, investing in a bank approved project can lessen your risk to a great extent.

Look for Personal Recommendations

Ask for personal recommendations from your friends, family members or colleagues about their experience with a particular real estate agent or a particular builder.
 

Final Word

Now that you have a fair idea about all the major types of real estate scams India, hope that you will not hurry in investing. While you may truly come across real great deals in real estate, it is important that you always perform a methodical assessment to keep away from property scam. Sign the booking amount cheque only if the property passes all the investigations. Keep in mind, a little bit of research can save you a whole lot of mental agony and lakhs of rupees. 

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Should we buy property online?

The concept of buying property online is fast increasing in India. With the population of internet savvy people on an increase, there is an increase in this trend as well. However, there are some of us who may wonder if we should go in for buying property online? Let us check out the process and the pros and cons of buying property online.

The process of buying property online

Listing of properties by brokers and builders on the various property portals is a common thing. Normally a buyer will go through the list on the website and will get in touch with the builder or the property dealers in person to check out the property and finalise the terms and conditions. However, when you buy properties online you are actually making an online purchase just as you would buy other products on an e-commerce website. These properties are listed on an e-commerce website and you can make the purchase from the comfort of home. You have to select the property, add it to the shopping cart and make the online payment of the token amount. Once you get a confirmation about the payment the advertiser will get in touch with you for completion of all the formalities and legalities.

Advantages of buying property online

• You stand a good chance of earning a huge discount. The reason being the builders and developers offer fat commissions to the property dealers or brokers for booking of their homes. When these developers list their property on an e-commerce portal they save on the commission that needs to be given to the broker. This benefit they pass on to their customers who buy property online. 
• Besides online buying makes it easy for a person to book a property in Delhi NCR by sitting in his home in Mumbai. 
• Buyers also get the advantage of multiple options. There are so many properties listed on the e-commerce website. You can compare the different properties online and select the best online property which suits your requirement and budget.

 

Disadvantages of buying property online

• The booking amount is non-refundable. So in case you do not like the property and want to cancel the deal for any reason, remember that you will not get back the booking amount that you paid online.
• When you select a property online you are not given any choice for the floor or the flat or the tower in the complex where you would like the property. For this, you need to get in touch with the developer in person. Time and again developers offer those properties which are not getting sold out due to certain drawbacks. Obviously, you cannot find out how a particular property in Delhi NCR looks like by surfing the net.
• The e-commerce website does not take any liability of the deal and there is no clarity on the approval of the project, loan approvals etc.

We have to understand that this is a fairly new concept that is entering the Indian property market. The Indian property market is already a tricky and difficult place. Therefore, one needs to measure all the pros and cons before buying a property online.

Hidden Charges in Home Loan

Home is a place that gives you emotional warmth. The growing real estate price has, however, made buying a property a daydream for most of us. Home Loan is the most convenient way, which brings you closer to your 'dream abode’.

Well, you need to be exceedingly careful while you decide to avail a Home Loan. The financial organisations (Banks, NBFCs) will not tell you about many hidden charges. The initial charge that you come across while applying for a home loan is the processing fee. There are, however, several hidden charges in a home loan that you would come to know afterwards. In this article, I tried to cover few home loan hidden charges that you may come across at various stages of your loan tenor.

The banks and other finance lenders are constantly working to find newer ways to make more money out of a borrower.  There are actually no clear cut guidelines regarding Home Loan hidden charges. Banks keep changing the explanation as per their convenience. In India, regulatory bodies are turning blind towards Home Loan hidden charge and transparency is taking a back seat. Let’s go through some of these Home Loan hidden charges.

Conversion Fees

The most regular among all Home Loan Hidden Charges is the Conversion Fees. It is the amount you need are expected to pay to cut your Rate of Interest (ROI) during the loan tenure. Let’s consider that you availed a home loan @ 12% i.e. Base Rate of 10% + 2% markup. Now during your loan tenure, the bank reduced mark-up for new customers to 0.25% and thereby offering home loans @ 10.25%. You are, however, still paying 12%. Now if you wish to lessen your ROI only by reducing mark you need to pay the bank a conversion fee. It generally varies from 0.5% to 1% of your outstanding loan amount.

MODT Charges (Memorandum of Deposit of Title Deed)

Memorandum of Deposit of Title Deed (MOT) is an undertaking by the borrower that he has submitted the title documents of the property to the bank or NBFC at his own wish and will. It is given as a security to the financer. Govt levy stamp duty on this document to register the same. Charges vary from state to state. Generally, it is 0.1% to 0.2% of Home Loan amount. It is one of the most parts of the Home Loan hidden charges.

Document Retrieval Charges

This is the charge levied at the time of loan closure/pre-closure. It is principally a cost of transferring original documents from central document repository to the borrower. Usually, all original documents received by banks or the NBFC  are divided into 2 parts (a) Important documents like Sale Deeds, Sale Agreement etc and (b) General Documents like Search report, Tax bill, NOC from association etc. The first sets of documents are kept in safe custody at the central repository. General Documents are usually kept at Loan Location.
 
Suppose you availed Home Loan from a Bank in Kolkata and the central repository of that bank is in Mumbai; all essential documents will be shifted to Mumbai and general documents will be in Kolkata. When the loan is closed, the financer would charge document retrieval charges to transfer documents from Mumbai to Kolkata. First class courier service providers are used for safe transfer. These charges are generally included in processing fees.

Administrative Charges

Most people have a tendency to confuse it with Processing Fees. Some banks charge administrative charges separately while some take it as a part of the processing fee. This is a charge levied to recover administrative cost of processing the application. If we define precisely; then processing fees refer to the front end cost like DSA cost etc while an administrative charge is levied for back-end processing of the loan application. Bank at times might waive off processing fees.

Legal Fees

There are few Banks with no in-house lawyers to validate the legal status of the property. They engage lawyers (external) for this job. The fees of these lawyers are taken from customers under the head Legal Fees.

Valuation Fees / Inspection Fees

Before sanctioning the loan, physical inspection of the property is done. This is done to decide the property valuation. It is done to make certain that bank is not over lending. In the case of default, the bank needs to recover their dues by auctioning the property. There are Civil Engineers to evaluate the property. The charges incurred for the process are recovered by the customer as Valuation Fees.

Documentation Charges

To approve a Home loan the financer necessitates a lot of documentation; say, for example, Home Loan agreement, MODT, Indexing etc. Despite the fact that standard formats are used still there are charges involved in completing these documentations.

Switching Loan Package

Suppose you availed floating rate of interest for your Home loan at the time of application and now you wish to switch to fixed Home Loan or vice versa. In such cases, the lender would charge usually 1% of outstanding loan amount to process your request.

Changing Loan Tenure

If you to wish to increase/decrease your loan term that change your Equated Monthly Instalment (EMI) anytime during the loan tenure the Bank would charge fees for the same.

Statement of Account

One annual account statement is given at no cost. However, in case you request for another statement from the bank; they might charge up to Rs 500 per statement.

Copy of Original Documents

It is recommended to keep 2-3 copy of original documents before submitting to the bank. In case you appeal for a photocopy from the bank then they might charge for same. Charges vary from Rs 2 per page to Rs 1000 for the entire set.

Late payment charges

In case you fail to pay your EMI within the set date, a late payment charge will be levied by the bank @ 2% per month on the deferred time period with a minimum of Rs. 500 penalty. 

Recovery Charges

In case you default on payment the bank will charge to complete the cost of recovery i.e. Recovery Charges from you. Charges are generally Rs 250/instalment. 

Pre-Payment Charges

Well, pre-payment charges are abolished but only for candidates availed for floating home loans. Some banks charge a pre-payment penalty if funding is not from own source. In the case of 3rd party funding or Balance Transfer (take over by other bank); Pre-Payment penalty is applicable. 

Don’t fail to notice the clauses mentioned in the home loan agreement and end up paying several hidden costs. Understand the details of all hidden costs at the time of loan processing and avoid inconveniences at a later stage. Be a Smart Real Estate Investor!

A Comprehensive Explanation of Carpet Area, Built Up Area/ Plinth Area and Super Built Up Area

Planning to buy a property? Well, it is essential that you have a clear understanding of what are Carpet Area, Built up Area, Plinth Area and Super Built Up Area.

Carpet Area, Built Up Area/ Plinth Area and Super Built Up Area is a puzzle for most home buyers. Almost everyone who has purchased a property or about to purchase one are worried about how to calculate the area. Generally, the explanations available on the internet add to the puzzle. The fact is that there are no read standard guidelines available for Indian real estate industry. Pointless to state, most developers take advantage of this information crack.

Let me give you the most logical definitions and analysis on the subject, so that you are much more self-assured when you go property searching next time.

What is Carpet Area?

As the name suggests, carpet area refers to the area of the property where you can lay your carpet (wall to wall measurement). This is the actual area which you may claim as your personal space. This is the area you should be actually concerned about.

Areas incorporated in Carpet Area

• All Rooms – Living Room, Dining Room, Bedrooms, Dressing Room, other rooms.
• Kitchen
• Bathrooms
• Stores
• Balconies
  

Areas not a part of Carpet Area

• External and Internal walls
• Common Areas
  

It is important to keep in mind that balconies are included in carpet area calculation but terraces (if any attached to a unit) are usually sold independently at a lower per sqft rate. The reason being terraces are not included in FSI calculation (Floor Space Index) also known as Floor Area Ratio of the developer.

Once you ask, the marketing staff may say that they are offering the highest carpet area ratio and are just using a loading factor of 25%. He will show you the carpet area calculation as follows:

Carpet Area = 1500 * (100-25)%  = 1125 sqft, this is a wrong method to work out the carpet area.

The correct method for carpet area calculation
 
Carpet area * 1.25 = Saleable Area
Carpet Area = Saleable area / 1.25 = 1500 sqft / 1.25 = 1200 sqft.
You should have got 1200 sqft with 25% loading.
Keep in mind that the loading factor is supposed to be loaded (added) and not subtracted.

Conversely, if the real carpet area is 1125 sqft (can be calculated from the layout in brochure), the super built up area should be 1125 * 1.25 = 1406.25 for which you are expected to pay, while the builder may charge you for 1500 sqft. i.e. for 93.75 sqft. extra. 

What is Plinth Area / Built Up Area?

This is the gross area of a flat. Above and beyond the carpet area, it includes the space covered by the wall thickness and ducts. Normally, it is 10-15 per cent more than the carpet area of the flat. As a rule of thumb, built up area can be computed by adding 10% loading factor on carpet area. This is however, not so essential while buying a property as nearly all developers sell the property on super built up area. Nevertheless, this term becomes imperative while dealing with government departments as in many states; property taxes are levied on built up area/ plinth area.

Areas included in Plinth Area / Built Up Area

• Whole carpet area
• Internal and External Walls
• Utility Ducts within walls of the unit

Areas not a part of Built Up Area/ Plinth Area 

• Common Areas

What is Super Built Up Area?

Super Built up Area refers to the built up area added to common areas proportioned to a unit. The super built up area can be calculated by adding a loading factor to the carpet area, which could fluctuate from 15% to 50%. The lower the factor the better it is for you as a customer. You get a higher carpet area for the same amount.  You should pay most attention to areas included in Super Built Up Area and Entire Built Up Area.

Common Areas – lobby, staircases, lift ducts, air ducts, pipe ducts/ shafts, clubs, covered community centres and other covered common facilities.

Areas generally not to be included in Super Built Up Area

• Open Areas like parks, gardens, play areas etc.
• Roof Terrace

At times, Super Built Up Area is also called as usable area, saleable area or just super area.

Hope you enjoyed this post. What is your experience? You may add if I missed something. Please leave your comments below.

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Looking to buy a Flat? Things to remember before you book any flat

Real Estate in India has become a growing business because this is something which is available in every part of India. The high rise of building for commercial purpose and residential matter real estate business is very common.

It is depending on person to person that what kind of flat they want to buy. Investing in properties should be done judiciously as it means spending a huge amount of money. The range or price of a flat generally depends on the location, affordability, luxury. Thus a small mistake can cost you a lot. Thus here are some guidelines you may follow before buying a flat:-

1. Knowing the purpose – Before investing in properties, you must know why you are buying it. You want to stay or to give it on rent? A flat purchased for living and a flat purchased for rental needs should be taken care differently.
2. Cost – The price trends in India of any flat mainly depends on the total area. Flats are usually priced on the basis of the area. Though, the definite usable area of the flat may differ from the one you are charged for, or, the saleable area. Built Up Area or Plinth Area is the total covered area of the apartment. The super built-up area is considered as the saleable area. It is calculated by adding the common spaces to the built-up area. These common spaces lifts, staircases, entrance lobby, electrical room, pump room, flower beds etc.
3. Work of the builder – It is very important for the buyer to check the work of the builder before investing in a property. The reputation of the builder is exceedingly essential.
4. Legalized – It is important to check the papers of the property you are buying. There are lawyers and legal consultants to review the papers and confirm if the property is free from litigation.
5. Specifications – In every flat, there should be some basic facilities. Check them carefully before you invest. Sometimes builders make fake commitments; confirm everything is mentioned in the agreement.
6. Details about the current home loan rate – With the rise in price a buyer might need to avail housing loan to invest in real estate in India. Gather information about the current home loan rate. Do not trust agents assuring lower interest rates.
7. Hire a good broker – We all know about real estate agents and most of the people hire them. It is important to hire such a broker because they could help you to find the required property that suits your budget and also reduces your burden. Real estate agents also have better knowledge about the property, and can guide the clients about the price. But make sure you hire a good one otherwise; they could easily come out as a fraud.
8. Agreement time – Try to take enough time for signing the agreement so that you could cross check the papers from your side as well.

Happy living!

Investing in Noida Properties

For investors, Noida properties have emerged a new important place for real estate business. The price of the property raised about 21 percent in Noida in last few years. Experts are saying that the investors cannot make any marketplace in Noida but the properties which they are buying would result in a good residential deal and could expect a good share of return in next few years.

The price of Noida properties have increased because of many reasons like the investors they don’t need to face many risks in those properties, the economy at that part is not so fast. Moreover, investors are thinking that in next decade it will become a hub of industries and residential place thus the cost of the property will raise a lot.

The investors are investing in Noida properties because they will be benefited of its geographical settlement like Yamuna Expressway, Greater Noida and also Noida has a good potential and infrastructure to attract the investors too. Moreover, the place will be very easy to connect with as the government have started to launch the facilities of a train and metro railway to connect Delhi and Noida.
 
Investors also tend to Investing in Noida properties because the future of Noida seems to prosper as most of the people would like to relocate to a city like this where they will get a wide greenery, better job opportunities, apartments, villas and what not.

Another reason of growing scenario of real estate in Noida is because Noida is one of the cities among the best-planned city in India. Hardly one could see any congestion of traffic, the roads are newly built thus they are smooth to run vehicles on which helps to travel at any parts of the Noida.

Investing in real estate in Noida is also a good idea because as more educational institutions will grow here, more growth for the property could be seen. With more population obviously more shopping malls, multiplexes will grow and thus Noida will also become one of the modern cities of India.

The property price trends in Noida have gone through several ups and downs in past several years. During 2014 the price went down to about Rs.4, 848 per sq. ft. But prices again rose at the end of 2014 which was about Rs.5, 004 per sqft. Since then till 2015 it is still high.

The areas nearby Noida have still maintained proper price trends in Noida. Investors’ likes to buy properties in the sectors like 78, 137, and 76 as these areas the prices are more flexible.

The new project in Noida by the government has helped this city to gain more importance. Projects like Dwarka – Noida City Centre, Noida metro rail corporation, Greater Noida Industrial Development has pulled the investors to invest here.

With the upcoming of new projects in Noida, the investors should not hurry to buy properties. They should check the details of the properties and take proper precautions before investing. As because there might be different kind of brokers who may cheat you.