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Home is one of the basic necessities for all and to own one is actually a dream for every Indian. Home is not just a structure with four walls and a roof; it also comes with an emotional side attached to it. For some, it may be about a sense of security, comfort, and an accomplishment, while for others it is about being independent and carrying a status in the society.

But on a candid note, buying a home is no small expense. In the context of Indian society, the decision to buy a home is not only a major decision and a milestone in one’s life but also the biggest financial decision to make. Since it requires a huge expense and a big financial commitment, one may feel that why not choose the option of living on rent – it is a better fit. 

The debate goes on – buy a home or rent a house –which one is better?  It is difficult to choose from these two options.  

Let’s try to understand why buying a home is better than living on rent. Just have a look!

Freedom and Security

Owning a home always gives you greater freedom, for the way you live and how exactly you have dreamt of living within one. There are multiple options of buying a home –  you can  buy  a ready to shift home, and you may go on to purchase a plot and construct a home over it. Renting a home will always invite certain compromises like location, size, amenities, etc. For spending your life, for sure you would look for freedom within your living space.

Purchasing a Home provides added security, privacy, and comfort not only to you but also to your  family. The fear of untimely termination of the rental contract, infringement within the private life from landlords is automatically taken care of when you own your home. Additionally, the decision to change or remodel/renovate, extend, utilize the space as per your choice (covered and open both), is always with you and your family – there are no permissions required, but when you are renting you are dependent on landlords consent –even to hammer a nail in the wall. And it means – when you own your home, you are your own boss!

Tax Benefit on Home Loan

One big reason, why people do not go for buying a home, is skyrocketing and fluctuating prices of real estate. However, when you opt to buy a home by availing a Home Loan, you get entitled to avail Tax Benefits on the Home Loan Principal and Interest you payback. These benefits basically add-up to an affordable deal, in owning your home.

Availability of Easy Financing Options

Times have changed. Today, a lot of easy financing options are available in the market. Apart from banks, there are multiple financial institutions that provide loans. Housing Finance Company(s) like Aavas Financiers Ltd. provides up-to  90%*of the cost as Loan to prospective buyers, which means that the down payment is  not heavy on your pocket and easy to arrange.

On the other hand, you don’t get any such benefits when you live on rent. The entire money you pay becomes your expenditure, which increases with time.

On the above perspective let’s see what all benefits you get when you opt to buy a home by availing a Home Loan– You get Tax Benefits, the amount paid to buy a home with interest is fixed, however, with time the Property Value appreciates and the appreciation is much more than inflation rates.

In return to what you pay as cost and interest on your home loan – what you get is the property, but the rent paid never gives you any return. They are expenditure which keeps on increasing with every passing year, as per the terms of Rental Agreement.

Let us understand this with an example here – assume that there are two houses each costing 15 Lakh Rupees

> Rent a property – you will have to pay some amount as rent every month. Assume you are paying a rent of Rs 7,500 per month, which increases every 11 months at the rate of 8%.

> Buy a property – you will have to take a loan, which will cost you Rs 13,000 per month as EMI for 20 years, and also you pay a down payment of 5 Lakh Rupees from your side.

 While it appears that if you are staying on rent, you save Rs 5,500 per month and above that, you have shell out 5 Lakh Rupees as a down payment – which you could have invested in a SIP or any other scheme of your choice. However, when you analyze in detail, you will find that the gap in the EMI v/s rent ratio increase with time. Let us see how

  • When you are paying Rs 7,500 as rent per month, in the 12th year of living on rent, your rent will increase to Rs 17,487 per month (consider 8% increase per annum). This now becomes more than EMI of the Home Loan if the Property was bought and will continue to increase till 20th year.
     
  • But when you are paying an EMI for buying the same home, you will also get income tax  benefits on interest and principal paid during the financial year if you are a tax payer. In addition, the property value after 20 years will be appreciated many folds, whereas the amount saved by you living on rent will be more or less equal to zero.

 It is very clear and evident that owning a home is a much better deal as compared to living on rent.

Owning a home is not as difficult as it seems. You simply need to plan it wisely and go for it. Aavas Financiers Ltd is a leading housing finance company that has helped lakhs of customers in fulfilling their dreams of buying their dream homes.

We at Aavas, firmly believe that every individual who wishes to have a home should get an opportunity to own it, irrespective of his/her financial status. And that is why we provide housing loans to customers in low- and middle-income segments in semi-urban and rural areas too.

Start the journey of being a proud owner of your dream home with Aavas Home Loan today – Sapne Aapke -Saath Hamaara!

 

*Subject to NHB norms and eligibility.

Aavas Blog

6 Tips to Increase Your Home Loan Eligibility

01-Jan-2020 |Home Loan Eligibility

‘Buying a home for your family’ that’s what going at the back of your mind? If yes, then this article is a must-read for you.

Buying a dream home is always a crucial decision of an Individuals life. One needs to do a lot of arrangements & adjustments in their budget & financials. Most of the time, It may happen that your dream home budget goes out of your pocket. It’s the situation when you have to make a decision, either to drop your plan or opt to apply for a home loan and make your dream come true.

Before you apply for a home loan, it is advisable to check your home loan eligibility, so that you have a clear picture of your eligibility.

When you apply for a home loan, the lender would assess your credibility to repay the loan amount within an agreed time frame based on the home loan eligibility criteria.

Home Loan eligibility is defined as the maximum loan amount that you can expect to get, based on certain criteria such as your current source of income, repayment capacity, age, credit score, and many others. 

In this article, we will walk you through 6 vital steps that help you to increase your home loan eligibility without having any trouble.

  1. Clear Out All Existing Loans

All your existing unclear loans would negatively impact your home loan eligibility criteria. The previous loan dues would majorly hit your home loan eligibility. A lender would always consider your outstanding dues before sanctioning your home loan.

Before seeking for a home loan, make sure that you have cleared and closed your entire existing loans, collected no-due certificate and get it updated in your CIBIL credit score.

  1. Extend Your Home Loan Tenure

Your home loan eligibility criteria are determined by your repayment ability of loan amount every month which is what we called as equated monthly installments (EMIs).

If you go with longer loan tenure, you would have to pay lower EMIs every month, which fits to all middle and lower middle-class applicants’ to repay their loan amount and you are eligible for higher home loan amount to buy your dream home for your family.

But longer loan tenure means you would have to pay higher interest to the lender.

Don’t get disappointed, there is a solution to this situation as well.

Considering that your income would increase every year, the option is to increase the EMI amount every year with an increase in your income. You just need to restrict your expenditure to some extent and you would pay off the home loan amount in a lesser time period.

You can even take help of an online home loan EMI calculator which is available on Aavas Financiers website for you to quickly calculate your EMI based on your tenure, interest rate & loan amount.

  1. Keep your FOIR below 40 %

Fixed Obligation to Income Ratio (FOIR) is a critical parameter for determining your loan eligibility. It is defined as the part of your source income currently being used for loan repayment.

Higher the FOIR, lower the chances for loan eligibility. Therefore, try to limit your FOIR to up to 40% in order to increase the chances of loan approval.

You can lower your FOIR either by increasing your source of income or you have cleared out all your debts.

Lower FOIR means your liabilities are less which enhances your disposal income, thereby increasing your repaying capacity.

  1. Make a strong credit report

The home loan lenders of any financial institution or banks consider your credit report to measure your repayment behavior and mark you as high-risk or a low-risk potential home loan applicant accordingly.

The CIBIL score is one of the significant factors while the lender approves your home loan. Your CIBIL score is a measure of your capability to repay the loan amount within an agreed time frame. Always maintain a credit score greater than 750 (out of 900) to increase your home loan eligibility and even helps you to avail lesser interest rate from the concerned loan provider.

 

  1. Opt for a joint home loan for higher eligibility

Low income, low credit score and so on are common factors for the rejection of home loan applications by the lenders.  You can increase your home loan eligibility by choosing joint home loan instead applying as an individual applicant.

A joint home loan means you need to consider a co-applicant who is your immediate family member (salaried or self-employed, Indian or NRI).

If your co-applicant is a woman then even better, as woman co-applicant enjoys a lower rate.

By this method, you would increase your eligibility loan amount to many folds because your co-applicants source of income is also considered by the lender in assessing your eligibility criteria. And other benefits as well such as tax benefits, share loan repayment amount and so on.

  1. Additional Income Source

If you are failing to fulfill the home loan eligibility criteria, then you can even consider other income sources such as rental income, interest earned from fixed deposits or any bonus amount you have received from your employer or extra income earned as part of your freelancing work. All these sources of income would back you as well to enhance your home loan eligibility criteria for buying your dream home.

During the loan approval process, make sure that you have disclosed all the correct information in your application. Otherwise, you may face rejection in your home loan application.

Aavas Financiers Limited is a housing finance company helping many to fulfill dream of owning their dream home. Aavas Financiers Ltd has the vision to help majority of Indian population which belongs to low and middle-income by offering them home loans, plot purchase loan & construction loan, loan against property and balance transfer. You can take the help of home loan eligibility calculator or home loan EMI calculator to avoid Home Loan rejections.

Aavas Blog

क्या आप प्रॉपर्टी खरीदने जा रहे हैं? जानिये कुछ जरुरी बातें

आज डिजिटल प्रौद्योगिकी के प्रगति युग में, अब अपने सपनो के घर को पूरा करने के लिए ऑनलाइन द्वारा होम लोन आवेदन की परिक्रिया और को भी सरल बना दिया गया है |

अपने घर का सपना सभी का होता है, हर कोई चाहता है की उसका अपना खुद का मकान हो, लेकिन घर खरीदने के लिए इतनी बड़ी राशि जुटा पाने में हर आम आदमी सक्षम नहीं होता| निराश ना होइए, इसी को ध्यान में रखते होते भारत सरकार द्वारा प्रधानमंत्री आवास योजना (PMAY) चलायी जा रही है जिसका आप भी लाभ उठा सकते है| इसमें सरकार होम लोन पर सब्सिडी देती है| 


फिर भी, दो वित्तीय शब्द हैं जो हर होम लोन धारक को भयभीत करते हैं।


पहली ब्याज की दर और दूसरी ऋण राशि की अदायगी। लेकिन आपको चिंता करने की आवश्यकता नहीं है, आप निम्नलिखत तरीकों से अपने होम लोन ब्याज के बोझ को कम कर सकते है|
आइये जानते है, किस प्रकार आप अफोर्डेबल हाउसिंग लोन द्वारा अपने होम लोन के बोझ को कम कर सकते है।

  1. मार्केट रिसर्च और तुलनात्मक जानकारी
    किफायती होम लोन का लाभ उठाने के लिए मार्केट रिसर्च अतिमहत्वपूर्ण है। आपको आवासीय लोन और प्रक्रियाओं के बारे में उचित ज्ञान होना चाहिए। आपको चाहिए की विभिन्न वित्तीय संस्थानों द्वारा दी जा रही आवासीय ऋण योजनाओं और ऑफ़र की तुलना करनी चाहिए। बाजार में मौजूदा ब्याज दरों के साथ अपडेट रहें। अपने अनुभवी दोस्तों व् जानकारों से उचित सलाह लें जिन्होंने पहले कभी होम लोन लिया है।

    अपने होम लोन की पात्रता को पहले से जांच लेवे क्योंकि यह आपकी आमदनी और लोन चुकाने की क्षमता पर निर्भर करता है। आप आवास वेबसाइट द्वारा "होम लोन पात्रता कैलकुलेटर" की मदद लेकर अपनी पात्रता की जांच कर सकते हैं।
  2. प्रधानमंत्री आवास योजना (PMAY) योजना
    यह योजना चार तरह के आय वर्ग के लोगों के लिए वर्गीकृत किया गया है। ये हैं- आर्थिक रुप से कमजोर वर्ग (EWS), औसत से कम आय वर्ग (LIG), मध्य आय वर्ग (MIG I) और मध्य आय वर्ग II (MIG II)। इन वर्गों में से किसी के लिए भी अगर आप योग्य हैं, तो योजना के अंतर्गत आवेदन कर सकते हैं। आइए जानते हैं कि योजना में आवेदन के लिए क्या प्रक्रिया है।
    PMAY योजना हमारे माननीय प्रधान मंत्री श्री नरेंद्र मोदी द्वारा शुरू की गई भारत सरकार की एक पहल है, जिसने हाल ही में वर्ष 2022 तक प्रधानमंत्री क्रेडिट योजना (PMAY) के तहत "क्रेडिट लिंक्ड सब्सिडी योजना" (CLSS) के माध्यम से सभी के लिए आवास के अपने दृष्टिकोण को साझा किया। )।
    अब, आर्थिक रूप से कमजोर वर्ग / मध्य आय समूह घर की खरीद, निर्माण, विस्तार और सुधार पर ब्याज सब्सिडी का लाभ उठा सकता है।
    पी एम ए वाई योजना को श्रेणी के आधार पर दो भागों में विभाजित किया गया है।
    १) शहरी के लिए PMAY (U)
    २)  ग्रामीण / ग्रामीण के लिए PMAY

    PMAY (U) -
    1)  
     निम्न आय समूह (एलआईजी) / किफायती कमजोर वर्ग (ईडब्ल्यूएस) - वार्षिक आय 6,00,000 रुपये तक।
    2)    मिडल इनकम ग्रुप (MIG-I) - Rs.6,00,001 से Rs.12,00,000 तक की वार्षिक आय।
    3)    मिडिल इनकम ग्रुप (MIG- II) - Rs 12 ,00 ,001  से Rs.18, 00,000 तक की वार्षिक आय वर्ग के लोग|
    PMAY (G) –
    आवेदक के परिवार की आय 3 लाख रुपये और 6 लाख रुपये वार्षिक तक होनी चाहिए।

    आइये जानते है की किसको कितनी सब्सिडी मिलेगी|
    1) ईडब्ल्यूएस और एलआईजी श्रेणी में, व्यक्तियों को 6,00,000 रुपये की ऋण राशि पर 6.5% ब्याज अनुदान मिलेगा|
    2) MIG - I श्रेणी में, व्यक्तियों को 9 लाख रुपये तक की ऋण राशि पर 4 प्रतिशत ब्याज अनुदान मिलेगा, और MIG - II स्लैब श्रेणी के व्यक्तियों को 12 लाख रुपये तक की ऋण राशि पर 3 प्रतिशत अनुदान मिलेगा ।
    3) PMAY-G श्रेणी में, व्यक्तियों को 6% वार्षिक के दर से 6 लाख रुपये तक की राशि के लिए। यह योजना ग्रामीण लोगों के लिए एक नया घर बनाने या पुराने का विस्तार करने में आसान होम लोन का लाभ उठा सकते है।

  3. होम लोन बैलेंस ट्रांसफर 
    होम लोन बैलेंस ट्रांसफर आपके मौजूदा होम लोन को दूसरे होम लोन ऋणदाता को स्थानांतरित करने की प्रक्रिया है, जो आपको बेहतर ब्याज दर प्रदान करता है। अपने ऋण को किसी अन्य संभावित ऋणदाता पर स्थानांतरित करके आप एक किफायती होम लोना प्राप्त कर सकते हैं। किन्तु, आपको विभिन्न उधारदाताओं से बात करने की आवश्यकता है।

  4. अपने CIBIL स्कोर को बरक़रार रखें

    सस्ते होम लोन पाने के लिए CIBIL रिपोर्ट महत्वपूर्ण है। यह एक रिपोर्ट कार्ड है, जिसमें आवेदक द्वारा ऋणों के पुनर्भुगतान का पूरा विवरण रहता है। प्रत्येक ऋणदाता CIBIL स्कोर को ही मुख्य रूप से प्राथमिकता देता है और उसके आधार पर ही आपको होम लोन के सस्ते ब्याज दर का लाभ मिल सकता है। आपको अपने सभी पिछले ऋणों का भुगतान करके, अपने सभी क्रेडिट कार्ड बकाया राशि का भुगतान करके (900 में से कम से कम 750) का एक अच्छा क्रेडिट स्कोर होना चाहिए।
  5. आंशिक भुगतान चुनें
    होम लोन का आंशिक भुगतान नियमित रूप से ईएमआई के साथ-साथ ऋण उधारकर्ता के रूप में आपके द्वारा भुगतान की गई एकमुश्त राशि को कहा जाता है। पुनर्भुगतान का यह तरीका ईएमआई राशि को कम करता है जो अंततः होम लोन के अवधि को कम करता है| जब लोन अवधि कम हो जाता है तो यह ब्याज दर स्वतः ही नीचे आजाती है। अधिकांश बैंक आंशिक भुगतान करने पर कोई अतिरिक्त हरजाना नहीं लगाते हैं।
  6. अपने कारोबार व् रोजगार की स्थिरता को सुनिश्चित करें 
    किफायती होम लोन प्राप्त करने के लिए आवेदक की रोजगार स्थिरता होना नितांत आवश्यक है, और यह सस्ते होम लोन पाने में महत्वपूर्ण भूमिका निभाता है। यदि आप बेरोज़गार हैं या अपनी नौकरी को बहुत जल्दी-जल्दी  बदल रहे हैं तो आप एक अच्छी ब्याज दर का लाभ  नहीं प्राप्त कर सकते। गिरती आय का ग्राफ के कारन आपको अधिक ब्याज दर देना पड़ सकता है ।
    आपने रोजगार या नौकरी की स्थिरता के लिए आपको कम से कम लगातार दो वर्षों में साथ एक ही नौकरी में कायम होना चाहिए जिसके द्वारा आप सस्ते होम लोन प्राप्त किया जा सके।

    निष्कर्ष
    हम में से अधिकांश लोगों के लिए घर खरीदना एक बड़ा निवेश है। आप सुनिश्चित करे की आप घर खरीदने के लिए अपनी पुरे मनोयोग से पूर्णतया अफोर्डेबल हाउसिंग द्वारा सस्ती ब्याज दर का आवास लोन लेने के तैयार है
    अपने मनोभूमि व् निश्चय को अच्छी तरह से सुदृढ़ करें कि आप घर खरीदने के लिए बिना किसी झिझक के सस्ती होम लोन लागू करने और लाभ उठाने के लिए पूरी तरह से तैयार हैं। 
    उपरोक्त बताये गए सभी तरीकों से आप भी अफोर्डेबल हाउसिंग की किफायती ब्याज दर वाले होम लोन का लाभ प्राप्त कर सकते हैं।
    उम्मीद है, आपको यह लेख सस्ते होम लोन को प्राप्त करने में सहायक होगा और आप अपने स्वयं के घर का आनंद उठा पाएंगे|
    आवास फाइनेंसर्स लिमिटेड का भारत सरकार द्वारा चलायी जा रही अफोर्डेबल हाउसिंग योजना के अंतर्गत अपने  ग्राहकों को सस्ते में आवासीय होम लोन प्रदान करती है. आप भी यदि प्रधान मंत्री द्वारा चलायी जा रही PMAY होम लोन के लिए आवेदन कर सकते है|

     
Aavas Blog

6 Ways to Avail an Affordable Home Loan

01-Jan-2020 |Affordable Housing

With the advancement in digital technology, applying for a home loan now days is much easier. The online method has really simplified the loan application process.

Still, there are two haunted financial terms that scare every home loan borrower.

The rate of interest and repayment of the loan amount are the two financial burdens on every loan borrower while opting for a housing loan. But no need to worry, you can minimize the burden to a greater extent with the following ways.

Please go through the ways to reduce your home loan burden by availing Affordable Home Loan.

1. Do Through Market Research

Market research is important for availing affordable home loans. It is the fundamental way by which you can avail a home loan. You need to have a fair knowledge about housing loans and the procedures. Compare housing loan schemes and offers from different financial institutions. Stay updated with current interest rates in the market. Take advice from your friends and network who has already availed affordable home loan.

Get to know your home loan eligibility as it depends on your loan repaying capacity. You can check your eligibility amount by taking help of a home loan eligibility calculator.

  1. Pradhan Mantri AWAS Yojana (PMAY) Scheme

PMAY scheme is an initiative of Government of India launched by our Honorable Prime Minister Shri Narendra Modi, recently shared his vision of housing for all by the year 2022, through the "Credit Linked Subsidy Scheme” (CLSS) under Pradhan Mantri Awas Yojana (PMAY).

Now, Economical weaker section / Middle Income group can avail interest subsidy on purchase, construction, extension and improvement of home.

The PMAY scheme is further divided into two parts based on category.

  1. PMAY for Urban
  2. PMAY for Gramin/Rural

PMAY (U)-

  • Low income Group (LIG) / Economical Weaker Section (EWS) - Annual income up to Rs 6,00,000.
  • Middle Income Group (MIG-I) –annual income between Rs.6,00,001 up to Rs.12,00,000. 
  • Middle Income Group (MIG- II) – annual income between Rs.12, 00,001 up to Rs.18, 00,000.

PMAY (G)-

The income of an applicant’s family should be in range of Rs 3 lakhs and Rs 6 lakhs p.a.

Subsidy

  1. In EWS & LIG category, individuals will get 6.5% interest subsidy on a loan amount of Rs 6,00,000
  1. In the MIG - I category, individuals will get 4 percent interest subsidy on a loan amount up to Rs 9 lakhs, and in the MIG - II slab category individuals will get a 3 percent subsidy on a loan amount up to Rs 12 lakhs. 
  1. In PMAY-G category, individuals will get at 6% p.a. for an amount of up to Rs 6 lakhs. This scheme would help in availing easy home loan for rural people for constructing a new home or extending the old one.
  1. Look for Home Loan Balance Transfer

A Home loan balance transfer is the process of transferring your existing home loan to another home loan lender, who offers you a better interest rate. By switching your loan balance to another potential lender can help you to avail an affordable home loan. And for that, you need to talk to different lenders.

  1. Maintain a Decent CIBIL Report

CIBIL report is one of the important key factors for determining the eligibility of affordable home loans. It is a report card of an applicant where complete details of repayment of debts by the applicant are recorded. A Lender monitors the CIBIL report and based on that you can either avail a home loan or face rejection. You need to have a good credit score (at least 750 out of 900) by clearing all your previous debts, paying all your credit card dues and so on.

  1. Choose Partial payment

Part-payment of a home loan refers to a lump sum amount paid by you as a loan borrower along with regular EMIs. This way of repayment brings down the EMI amount which ultimately reduces the home loan tenure. And when loan tenure gets reduced then it also brings down the interest rate. Majority of banks do not impose any penalty on making a partial payment.

  1. Ensure Stability in Employment

Applicant’s employment stability is one of the determining factors to avail of an affordable home loan. You can’t enjoy a good interest rate if you have been sitting idle without any job in hand or switching your job frequently. The falling income graph will cost you with a higher interest rate.

So, you need to be steady with your employer for at least two consecutive years to avail of an affordable home loan.

Conclusion
 For most of us buying a home is a huge one-time investment. Prepare well at your end and make sure that you are completely ready to apply and avail an affordable home loan without any hiccups. As mentioned above write up, explore all possible ways and come up with a feasible option to get an affordable home loan. 


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