Long Tenure Home Loans to Encourage High-End Property Buyers

The recent development by banks to extend the loan tenure to 30 years for a home loan worth Rs 1 crore has raised a pertinent question. Will the move positively impact the sale of luxury homes in the top cities of India?

The country young home buyers have a reason to cheer as all banks are mulling an increase in the tenure of home loans to 30 years, encouraged by leading banks such as State Bank of India (SBI) and Housing Development Finance Corporation (HDFC). Typically, these loans are being provided to properties

above Rs 1 crore for select individuals in the age group of 25-30 years. The main triggers for this development are the improved buyer sentiments, rising disposable incomes and reduction in lending rates.

Experts believe that the direct impact of this move will be a push to the sales of luxury homes. The move to extend the home loan tenure to a period of 30 years will revive demand in the luxury housing segment. Extending the tenure will increase the home loan eligibility of the applicant, giving him/her the power to invest in high-end luxury residences worth Rs 1
crore and above.

Long tenure to benefit young home buyers
Long tenure home loans will allow young aspiring home buyers who have a good credit history and earning potential to borrow at competitive rates. Clearly, the young salaried class, in the age group of 25-30 will reap the maximum benefits of this announcement for two reasons. Firstly, owing to the age advantage, this segment of home buyers has the repaying capacity. Secondly, they have high disposable incomes and aspire for a high standard of living.Financial institutions too are responding to an increased demand for long tenure loans from the younger generation of customers. Experts say that there is an increasing demand for large value loans in the range of Rs 80 lakh to Rs 1.6 crore.

The modern home buyers yearn for more than just a decent dwelling. The young generation of home buyers wants a lavish home, which can stand as a testimony to their financial strength and enhance their status in the society. Moreover, purchasing a luxury home not only gives them a sense of value to their investment but also comfort and security.

The definition and realm of luxury has also gone to a completely new level. In addition to more space and a high-end location, luxury homes now come equipped with sophisticated technology and state-of-the-art amenities such as electronic surveillance, digital security and wireless communication.

The buyer sentiment has also improved with developments such as three repo rate cuts in the calendar year by the Reserve Bank of India (RBI), which helped banks lower the home loan interest rates. SBI, For instance, reduced the interest rate for home loan to 9.55 per cent and 9.5 per cent for male and female borrowers respectively. With this development, fence-sitting buyers are more likely to close the deal in near future.

Lower EMI an advantage?

Tenure of home loan is a crucial factor that is usually not the first thing on a borrowers mind. By reducing the amount of monthly instalment, tenure can significantly impact money that will be available for a number of other household expenses in the future. For a home loan of Rs 1 crore for a period of 30 years, the monthly EMI breakup is shown below:

Source: 99acres.com

Ready Possession Properties or Under Construction Properties: Which one is better to buy?

Prescon tries to clear the biggest dilemma of many would be buyers. As we feel that taking an informed decision is always beneficial than repenting later.

It is obvious for you to taken every decision meticulously while buying a home for you and your family. For you, as a first home buyer, there will always be two options before you. However, confusion arises whether to go for a property under construction or to opt for ready possession property.

Each of these options has its own pros and cons and it is extremely important to be aware about the advantages and disadvantages of Under construction and Ready to move property.

Advantages of Under Construction Property:

Payment can be made slowly & conveniently:

The exciting part of Under construction properties is that it is affordable for most of the people through a home loan. Here, ‘affordable’ is in the sense that from payment perspective, your life is easy. You make a down-payment which is generally 20% of the property price and then start making the monthly EMI’s each month and this is how a lot of people are able to own the house easily. Later after few years, a lot of people feel comfortable as their salaries go up, but the EMI’s value is very much the same. Without taking home loan also, one can pay the money in parts as it can be construction linked payment.

Liberty to Choose

While buying an Under construction property, one has a freedom to choose.New Projects are coming up in various locations like Ghodbunder Road, Thane. So the choice in terms of location or which floor you want are generally high. Example: If you are not happy with 12th floor, you can pay more and take the 3rd floor, but in case of ready-to-move-in apartments, if 12th is available, then that’s all you have. There you have no choice left!

Scope of Price Increase

Under Construction properties are generally in the outer area’s of the city and hence the price appreciation due to its obvious future development is good. Though it's not true in certain places. Its better for you to look at the location and do some ground work. It is heard that soon Metro services will be launched in Ghodbunder area i.e 4-5 years from now. It will be stretched from Ghodbunder to Ghatkopar. Under Construction Property Projects have more potential for price increase compared to ready to move in apartments.

Disadvantages of Under Construction Property:

Delay in Project

Delay in the Project for several reasons is one of the top most issue with under construction properties.

You may not get what you see

The biggest issue - You may not get your flat as same as what you’ve seen as a sample one.

So concluding the disadvantages of Under construction Property, if you still decide to go for Ready Possession Residential Property Projects nearby Ghodbunder Road.

 Advantages of Ready Possession Properties:

Relief from Rent

People who are usually paying high rents would like to move in a readymade property than under construction as they want immediate relief of paying high rents and travels costs. This can get by moving in ready to move properties.

You buy what you see

You exactly know what you’ve seen when you go for ready-to-move-in properties. So you can be sure of that there is no chances of getting duped at least in those things which you can feel and experience. You can also do some groundwork from the neighbours in these kind of properties for better understanding of services provided.

Know your surroundings

The big beneficial factor of ready-to-move-in properties are you know who your neighbours are. For that matter which kind of community you will belong to and if you would like to be with them or not. This you would surely will never experience under construction properties.

Disadvantages of Ready Possession Properties

Tedious process of legal documentation

In case of ready to move in property there’s a lot of legal work and documentation required. The sole reason is there are no ‘fresh documentations’ but a lot of ‘transfer of ownership’ documents which requires time.

Relatively Costlier than under construction homes

For this, in some cases, ready to move in property 20-25% higher than the under construction homes. It also depends on the locality and surroundings.

Limitations to choose your flat

As elaborated earlier, it generally happens that you won’t get your flat on the desired floor or position whatsoever matter. So this is one drawback you might face in Ready to move in flats.

WHAT TO KEEP IN MIND BEFORE BUYING A ‘VASTU-COMPLIANT’ HOME?

Vastu compliant homes have become a rage in the real estate market today. However, even though people are consciously looking for such homes, rarely do they know the significance of each vastu feature.

Now a days, vastu has become a major deciding factor for buying a home.  Anything that is supposed to ensure prosperity and happiness is sure to grab the attention of a typical Indian buyer. It thus does not come as a surprise that vastu compliance has become a prime criteria among home buyers.

However, most of these buyers do not understand the finer details of the science and hence end up being property without any knowledge of vastu compliance. Though there is a lot of buzz in the market about vastu compliant properties, not more than five per cent of the home buyers are aware of the details of the science.

Preference for vastu complaint homes differ on the basis of demographics and occupation. For instance, businessmen and ladies in the house are more inclined towards these homes.

So, if you are planning to invest in a vastu compliant property, here a few factors that might help you check the compliance of the property.

How can you check the Vastu compliance of the property?

1.Make sure that the toilet/bathroom is not in the north-east corner of the house.
Ideally, it should be in the east of south-east, south of south-west or west of the north-west corner of the house. It is recommended to avoid such homes/apartments as there is no remedy available to negate the negative impact of this.

2. Ideally, the entrance of your house/apartment should be in the north-east corner.
However, you may choose the entrance as per your profession:

Business – North facing entrance

Politics- East facing entrance

Artist/Creative-South facing entrance

Management-West facing entrance

3. No bedroom is to be placed in the south of south West direction and the master bedroom should not be in the north-east corner.
This is believed to cause  loss  of money, bad health, sleep deprivation and no career growth. The children’s bedroom should not be in the west of north-west corner. Ideally, it should be in the south-west so that a child’s head is towards the east or south direction.

4. The kitchen should be ideally placed in the south of south-east corner
It can also be in the west, but, strictly avoid an apartment where the kitchen is placed in the north corner.

These four are the major factors which affect the vastu compliance of a house. However, these factors make a home about 30-40 per cent compliant. In order to make your house 100 per cent vastu friendly, you need to make certain internal alterations apart from the structural factors mentioned above.

MAHA GOVT'S REALTY PROJECTS APPROVALS EASE TO HELP MAKE HOUSING AFFORDABLE: JLL INDIA

The Maharashtra government's efforts towards reducing the number of approvals needed for a realty project is expected to make private housing relatively affordable. The move is also expected to ease developers' cash flow issues as approvals for their projects will be faster, said JLL India in a report.

Toeing the central government's 'ease of doing business' policy, the state government aims to make all permissions/ clearances required from local bodies and the revenue, urban land ceiling departments available online. In a bid to increase transparency, land records may also be put up online.

"If developers pass on the benefits of quicker approvals to home buyers, private housing will become affordable, especially at a time when 69% of Mumbai's unsold housing stock is priced above Rs 1 crore," he said.

An approval cycle consists of key permits like intimation of disapproval (IOD), commencement certificate (CC), occupancy certificate (OC), building completion certificate (BCC), among others. About 40 IOD conditions are to be met by the builder to be eligible for applying for CC. The final authorization to begin construction, which is issued upon submission of all required NOCs and compliance to IOD conditions, is the CC. It is given in two stages: CC up to plinth level, CC beyond plinth level.

OC allows the building company to occupy the building but is not considered a final document because the building company still requires the certificate of completion. The company's architect must submit a formal letter stating that construction has been completed, according to the standards set forth in the IOD and CC. BCC is considered to be the ultimate document that the building company requires to fully occupy the building and connect it to utilities.

According to JLL, an analysis of the number of proposals received and clearances granted by Municipal Corporation of Greater Mumbai (MCGM) for projects in Greater Mumbai over the last decade shows an alarming trend. There has been a massive gap between new building proposals that have come to the MCGM for approval and the number of proposals that were issued for the final clearance, i.e. the BCC.

"An average 1,500 projects entered the system for approval each year, while only 730 OCs and 118 BCCs were granted by MCGM. This suggests that there has been a mounting backlog of projects, which are yet to receive one or more approvals," said Nair. "There could be several other projects, which despite having received an IOD and/or CC, may not have received the OC and/ or BCC and will likely have to wait for a long time if they are to get the final approval at all."

Shocking as it may seem, the building proposals that received OC have averaged just about 46% of the number of new proposals that entered the process for approval over the last decade. The proposals that received the ultimate approval - the BCC averaged a mere 4% in 2013-14. The reformed workflow mechanism would have to process not just new building proposals, but also cope with the massive volume of proposals that are pending further approvals.

Along with progress of construction, there are a number of things that a homebuyer can check during a site visit. A buyer can check the brands of materials used in construction such as cement, steel, wiring, switches, sanitary fittings etc. This can give a fair idea of the overall quality of construction.

Under the new policy, Municipal Corporation of Greater Mumbai will become IT-enabled. Applications for any approval/ NOC will get registered online and the appropriate time limit will start from that online registered date. The IT systems will be so devised that an incomplete application will not be accepted by the system. Any permission applied for will be decided by the Planning Authority within 30 days. The intermittent timelines will be specifically laid down for each level in the process of approval.

 Source: magicbricks

UNDERSTAND THE RELEVANCE OF SITE VISITS

If you are planning to buy a home or have booked one already, you must understand the relevance of site visits. Regular site visits can help check the progress of construction and deviations from the original plan.

Importance of Site Visits
Frequent visits to the construction site can help check deviations. If there are any changes in plan you can discuss about the new plan, if you have not visited the site you cannot know about new plans of the property you have bought. This brings us to the question about the frequency of site visits. In other words, how often should a homebuyer visit the site of construction? Let’s find out.

It is very important for homebuyers to visit the construction site. If you are planning to buy a house you should plan your site visit and take a decision whether to buy the property or not. They must check that the construction work is in progress as per the schedule that is mentioned in the agreement and committed by the developer.

Seeing is believing

While it may not be possible for a common man to comment on the quality of construction or materials used, deviations from the master plan can be spotted quite easily. The buyer should check that the brochure, blue print and the actual project are all in line.

Here are some of the reasons for a homebuyer to visit the site of construction:


Authenticity:

A site visit can help a buyer ascertain the genuineness of claims made by the developer. This is especially relevant for buyers planning to purchase an apartment during pre- launch. Visiting the site can help such buyers ascertain the all-important land ownership.

Progress:

Timely possession is one of the first things on a homebuyer’s mind. Regular visits to the project site can help a buyer check the pace and progress of construction.

Quality:

Along with progress of construction, there are a number of things that a homebuyer can check during a site visit. A buyer can check the brands of materials used in construction such as cement, steel, wiring, switches, sanitary fittings etc. This can give a fair idea of the overall quality of construction.

Verification of Amenities:

A homebuyer can inspect the amenities available at the project site. For instance, a buyer can check if the project has a swimming pool, clubhouse or recreational centre as shown in the layout plan.

Impact of the Internet
The advent of technology in real estate has also impacted the need for site visits. With a number of sophisticated features, real estate websites have made it possible to get a detailed view inside your flat. Without an actual visit, prospective buyers can now take a virtual tour or browse through property photographs and videos to make an informed choice. Does that mean that there is little or no need of the traditional visit to the site of construction? Property experts disagree.

Buying a home is probably one of the biggest financial commitments one would ever make. Thus, nothing will ever replace a site visit and personal inspection. Coming to the question of frequency of site visits, experts suggest that a homebuyer should plan a site visit once in three to four months to stay updated.

Click to View PRESTIGE RESIDENCY - 2 & 3 BHK SPACIOUS HOMES IN THANE - HILLVIEW CONSTRUCTION UPDATE OF NOVEMBER 2015 or Contact Us to Schedule your Visit.

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