5 Tips to Avoid Getting Rejected by a Home Loan Company

 

 

For millions of Indians, owning a home is a lifelong ambition. However, real estate prices are increasing across the country, making it necessary to arrange for a home loan. However, extensive research and submission of required documents may fall short of getting their loan application approved for loan applicants. Before granting a loan, banks check essential criteria such as home loan ke liye documents, a good credit score, and a stable income flow to evaluate applicants.

If you are concerned about your home loan eligibility, follow the tips given below to avoid being denied a loan.

Tips for Getting a Home Loan

The following suggestions can assist you in getting a house loan secured quickly.

• Pay higher down payment

The first step an applicant can do to get his loan application approved is to make a higher down payment on the property. Even though banks can lend 80-85 per cent of the property's value as a loan amount, it is better to prepare for a higher down payment. This improves your credibility and gives them the confidence to lend, and your loan application is more likely to be approved because you have less debt.

• Apply for home loan subsidy

First-time buyers under the LIG/MIG category can check for home loan subsidy eligibility under the PMAY scheme. Qualifying under the scheme ensures you need to borrow less from the bank. This further benefits you as your repayment capacity is reviewed favourably by the potential lender allowing you to get the loan approved.

• Improve your credit score

Before issuing loans, lending institutions check the loan applicant's credit score. Those with excellent scores are often preferred. You can raise your score by taking the following steps.

• Clear all your debts before applying for a home loan.
• Paying all your credit card dues on time without fail is essential.
• You should not apply for multiple loans from different institutions as it harms your credit history.
• It would help if you did not switch jobs frequently. To qualify for a house loan, you must have a consistent and stable source of income. If you have a job, submit all essential documents for home loan eligibility for the salaried person.
  

• Apply for a joint loan

Applying for a joint home loan is another effective way to get your loan application accepted. You can file with any working family member in your family (spouse, father). This increases your chances of securing a loan. Sometimes, the applicant is over the age of 50. Banks are hesitant to lend to such applicants; in this instance, requesting a joint loan with your working son or daughter is a wise option.

Furthermore, certain institutions provide females with loan interest rate subsidies, which you can take advantage of if you apply for a joint loan with your wife.

• Apply for a long tenure

If you are new to the job and have a low starting salary, it is best to apply for a loan with a more extended repayment period. This decreases your EMI cost while also assuring the potential lender of your repayment capacity. In addition, the affordable EMI ensures that you are in the low-risk category, and your chances of obtaining a loan improve.

In addition to the suggestions mentioned above, it is critical to submitting all relevant home loan ke liye documents as requested by the lender. This will ensure that your home loan application gets cleared without issue.

Planning your financial growth with mutual funds

 

Mutual funds are investment vehicles that are created from a wide range of funds accumulated from various investors to put money in securities such as stocks, money market instruments, bonds, and other assets. Mutual funds are the easiest way to invest in the market. They offer a variety of investment options and risk levels which can be tailored to suit your needs. That is the reason why online mutual funds are popular among investors.

Mutual funds are a type of investment that pools the money from many individuals and invests in different stocks, bonds, or other securities. Mutual funds provide a way for individual investors to diversify their investments by spreading their money over many different types of securities. The most crucial thing about mutual funds is that they are managed by professionals who make decisions about what to buy and sell without the investor having to do any work. Investors can choose between actively managed funds which require more work on behalf of the investor, or passively managed funds which typically have lower costs and require less effort on behalf of the investor. So, if you are planning to grow your money and if you have a lot of patience, then a mutual fund is the best bet for you.  

How can Mutual Funds Help You Grow?

Mutual funds are an excellent way to grow your money because they offer professional management. Professional management is one of the advantages of mutual funds, as your money is invested and governed by professionals who have years of experience with them. 

They also provide low-cost investments to you. If you have any experience in trading and investing, you may already know that investment is a high-cost affair, as there are multiple types of charges, but that is not the case with mutual funds. Mutual funds are an extremely low-cost affair, and you don't have to worry about giving money as charges. 

They provide diversification with just one investment. When you invest in a mutual fund scheme, your portfolio becomes diverse because every mutual fund scheme consists of various companies that belong to various sectors. So, even if the market is going down for a certain sector, you don't have to worry about the losses because you have other sectors in your portfolio. 

Conclusion 

Mutual funds have been around for a long time, and they have proven to be a reliable investment vehicle. In the past decade, mutual fund investors have outperformed the market average nearly every year. So, it is no exaggeration to say that mutual funds can help you grow your money without breaking a sweat. All it takes is a little bit of patience and trust from your side. If you have some patience, then you will see your money increasing at a steady pace, and in no time, it will multiply itself.

How to Support Your Child's Education During the Pandemic

 

Rising education costs has always been a factor to consider to plan for your child's future. Moreover, due to the pandemic, children are increasingly exposed to online mediums for learning purposes. Due to this, their digital privacy, security and protection are also important now. That being said, here's how to support your little one's education now.

Estimate How Much You Need to Save

Start with setting a rough target amount that you need to save for your kid's education. For that, consider looking at the current figures of school/tuition fees and adjusting it over the years for inflation. Otherwise, you can simply use a child education calculator to forecast future expenses.

Education costs can vary for every child. It depends on the particular course that interests him/her in future. Process courses and private colleges are costly, and overseas education is more expensive. Considering these factors too, it's better to have a higher estimate of overall costs.

Start Investing

Mutual fund investment can be a good way to save for your child's education. As it's a long-term goal, you can consider investing in equity funds. Although they're high-risk funds, they can generate higher returns for long-term goals.

You can use a financial planning calculator in India on an asset management company's website to estimate the amount to be saved. Then if you don't wish to make a one-time lump sum investment, you can invest a small amount in a Systematic Investment Plan at regular intervals (like weekly, monthly, quarterly, etc.). SIP can help grow your returns with the power of compounding. Plus it can reduce your per-unit cost of investment to beat inflation in the long run. 

Cut Unnecessary Expenses and Improve Savings

Only mutual fund investments may not be enough to save adequately for your child's future. After checking the target amount of savings on a child education calculator, assess your budgeting and saving goals accordingly. See if you need to prune any variable expenses like entertainment costs.

Also, up your savings to ensure that the returns you get from a fund dedicated to your child's education plan aren't compromised for any other long-term goals like retirement. You can use a financial planning calculator in India for that as well. 

Keep Reviewing Your Investments

Keep checking your savings target using the child education calculator since the results are constantly subject to inflation. If you need to step up your mutual fund investments via SIP, you can do that by a specific percentage annually. 

Protect Your Kid Online

Finances aren't the only thing to consider when supporting children's education now. Since recently the medium of providing education has become mostly digital, ensure to protect your children online. Consider using parental controls on their devices to ward off online risks, especially for younger kids.

Educate them about appropriate online behaviour on platforms like video calls. If you identify any inappropriate online content or cyberbullying, report to the school or any other local support helplines right away.

Also, remember that kids need not share personal information to access digital learning.

Just follow these steps to support your kid's education effectively during the pandemic.

The Top Features and Benefits of Opting for PMAY

 

For many Indians, the skyrocketing real-estate prices has become a major impediment in realising their dream of homeownership. This is why the government of India launched a new affordable housing scheme, catering to different sections of society. The Pradhan Mantri Awas Yojana (PMAY) was introduced by the Ministry of Housing and Urban Poverty Alleviation in June 2015. The scheme has two components, addressing urban and rural populations.

What is the PM Awas Yojna?

The PM Awas Yojana is a Credit Linked Subsidy Scheme (CLSS), intended to facilitate the government’s mission of ”Housing for All by 2022.” Under this scheme, the beneficiaries are entitled to receive interest subsidy on home loans for the purchase, construction, expansion or improvement of a house. The scheme caters to the Economically Weaker Sections (EWS), Lower Income Group (LIG), and Middle Income Group (MIG) segments of society. The PMAY subsidy provided under the scheme varies according to which income segment beneficiary belongs to and the size of the dwelling unit.

What are the Benefits and Feature of the PMAY?

The features and benefits of the scheme are outlined below:

1. Under the scheme, all beneficiaries are entitled to an interest rate subsidy of up to 6.5% on a housing loan. The maximum tenure of loan repayment for all categories of applicants is 20 years.
2. The subsidy on the loan varies for different categories of borrowers and depends on the income slab of the applicant:

• Income of up to ₹6 lakhs per annum (EWS & LIG): Subsidy is 6.5% on loan amount limit of up to ₹6 lakhs.
• Income up to ₹12 lakhs per annum (MIG-I): Subsidy is 4% on loan amount limit of up to ₹9 lakhs.
• Income up to ₹18 lakhs per annum (MIG-II): Subsidy is 3% on loan amount limit of up to ₹12 lakhs.
• Any loan amount applied over the limit fixed under the scheme will be at market rates.

3. Under the scheme, senior citizens and differently-abled individuals are preferred for a home on the ground floor.
4. For sustainable development, eco-friendly technologies should be used for construction.

In addition to purchasing a house from the builder, the scheme is also applicable for constructing your own house and for upgrading ”Kutcha” homes to a concrete home.

What are the Other Incentives to Apply for PMAY?

Under the Pradhan Mantri Awas Yojana, the GST rates applicable to all applicable home loans has been reduced from 12% to 8%. Even under-construction properties, that come under the purview of the scheme, are eligible for 8% GST. The direct beneficiary is the loan applicant under EWS/LIG/MIG categories, who can now get homes at reasonable prices. Reduced GST also incentivises builders to promote affordable housing projects.

Under PMAY, first-time home buyers are entitled to tax deductions under Section 80EEA of the IT Act on home loan EMIs. The maximum limit is ₹1.5 lakhs of the taxable income per year.

So, applying for a home loan under PMAY is beneficial in accessing affordable home loans, In addition, the PMAY is an effort to usher in social justice.

Simple Steps to Turn Your Dream House into Reality

 

Buying a house is an important life goal for many. This could be a great time for you to fulfil such a goal. For the first time in a decade, residential property prices are on a downturn. In fact, property prices in India are expected to decline by 5.0% in 2020, according to Reuters June poll.

While this may sound exciting, buying your dream home requires a lot more than falling property prices. You need proper planning and research. So, here are some tips to help turn your dream into reality:

Know You are Looking For

Some of the things to keep in mind are:

·         Location: A house in the heart of the city can significantly cut down commute time but will be far more expensive than a property in the outskirts. When choosing from locations in the outskirts, consider the nearby markets, hospitals, and schools. Since this is an important investment, look for localities that will grow. These are ones that are expanding in terms of population and infrastructure. A property in the suburbs may offer better growth prospects than one in a developed area in the city.

·         Type of House: Your lifestyle will determine whether you need an apartment, condo, or an independent house. An apartment offers greater security but has limited scope of expansion.

·         Size: Do not consider the super built-up area. This includes the area of the inner walls as well. Instead, check the carpet area.

Opt for a Home Loan

Financing your dream home is easier with a property or plot loan. Some of the things to consider are:

·         The bank should be transparent about all fees, interest rate, documentation, and eligibility of the plot loan.

·         Consider choosing a bank with a low turnaround time. Most banks take around 5 days to offer loans for plot. Choose a bank with a shorter turnaround time to remove uncertainty.

·         The loan to value ratio offered by the bank is also important. The LTV ratio refers to the percentage of property value that is given as loan. According to RBI guidelines, banks can offer up to 90% LTV for properties worth less than ₹30 lakhs. The LTV ratio is 80% for properties between ₹30 lakhs and ₹75 lakhs.

·         You can also transfer your home loan to get better terms and features. For instance, if you transfer your home loan balance to ICICI HFC, you can get benefits like flexible instalment plans.

Get a Real Estate Agent

You might know what you are looking for, but you still need to find it. Real estate agents have extensive knowledge about the property and localities. They also know which properties are built using high quality materials, which are safer, and which areas have better roads and are not prone to water logging. Choose your real estate agent after going through their reviews and experience.

This is a great time for buying your dream house. Be sure to do proper research and plan your finances well before buying any property.