Common Home Loan Myths

1. The bank is not concerned with the Employment Status of the borrower

The ability and the willingness to pay back the loan are two cornerstones on the basis of which banks give the borrower the loan. While the income documents and account of assets and liabilities give a fair idea of a borrower’s willingness. The individual’s past track record is checked for the willingness and capabilities for reduced delinquency to pay.

Thus irrespective of the value of the property it is integral for person to submit the required details for the bank to grant the loan. The home loan agreement states that the borrower has to keep the bank informed about his employment status i.e. whether he has changed his job or lost his job or retirement etc.

2. Higher EMI is better than longer Tenure or vice versa

 This question always gives you a tough time. Ideally one should go for a higher EMI, at first it might cause a dent to the borrower’s pocket but it would benefit you in the longer term. This is because most home loan borrowers are in their 30’s when they apply for loans, and if the loan tenure is of about 30 years or more then the borrower will be paying off his loan even after his retirement, this obligation would then be difficult to fulfill when he will have no source of income.

3. Hike in interest rate means inflated EMIs

Do not freak out when you listen to something like this. Most banks, subject to conditions, usually extend the tenure of the loan and keep the EMI amount unchanged. This decision is taken by banks on various factors such as a borrower’s property, income and so on. It completely depends on t a borrower if he/she does not wish to prolong their loan repayment they can inform the bank about their willingness to service a higher EMI.

4. Fixed Rate of interest is better or Floating Rate of Interest

Fixed Rate of Interest: The interest rate charged on the loan remains fixed irrespective of the interest rate trends. The EMI on your loan amount will remain the same for the entire term. Floating Rate of Interest: The interest rate on your loan will vary according to the interest rate prevailing in the market. Whether the either is better or not for you entirely depends on the market scenario. If the interest rates are expected to fall then fixed rate of interest will not be good but at that time floating rate of interest would be favorable, as that would lower your EMI. On the other hand if the interest rates are rising then the fixed rate of interest would be better than the floating rate as the EMI on the latter will increase in this case.

5. Prepayment attracts Penalty

This factor again depends upon the bank. Usually prepayment charges are levied in the initial 2-3 years from the disbursement date of the loan and which declines over time. If you repay the loan out of your own funds, you will not lose much. This does not apply if you opt to refinance your loan from any other bank; most of the financial institutions do waive the prepayment penalty. Mostly institutions allow up to 25% of the loan outstanding to be part prepaid in a financial year, but they can charge anything ranging from 2% to 4% for any amounts paid over the specified limit of 25%.

Your dream home is just a few steps away

Home loans help you realize your dreams of buying the house you have always wanted and also help save tax. A home loan is an essential part of any home buying endeavour. The key to getting your home loan in a smooth way is being familiar with the entire home loan process.

Beginning the home loan process

The process of getting a home loan starts with a formal application for the loan. The application form requires certain basic information about you which includes your personal, residential, income, employment, educational details, and details about the property, estimated costs and current means of financing the property. The requirements often vary bank to bank.

The application form must be supported with valid documents to substantiate the facts. Generally the banks ask to submit the following documents.

• Income proof
• Age proof
• Identity proof
• Address proof
• Employment details
• Proof of educational qualifications
• Details about the property if finalized
• Bank statements

The purpose of the entire exercise is to ascertain the suitability of the applicant for a home loan. The income documents and bank statements provide vital clues to the bank regarding your financial health.

The concept of processing fee

An important thing to note about home loans is the processing fee. Banks charge a processing fee for every home loan application. This fee is non refundable. The processing fee also varies from bank to bank and is generally from 0.25% to 0.50% of the loan amount. This fee is used by the bank to start and maintain the home loan process including completing the various formalities during the entire period.

Although there are a few points that should always be kept in mind

Additional charges to be kept in mind

When you are applying for a home loan, you need to be educated about the various charges that the lenders add to the current scheme. The additional charges fall under the amount sanctioned in your name and not on the amount you take home.

Read the fine print of the agreement

Even if the home loan agreement is a bulky document, read it carefully.

Never Leave a Doubt

Applying for a home loan might seem easy but it comes with its own set of complications. So, never leave a doubt in your head which may lead to complications later on.

Real Estate scenario in 2014

Outlook Time to match demand with relevant supply:  India’s gripping urbanization growth story has been fascinating global investors so far, an underlying truth gradually emerged in 2013 - economic growth, the consumption story and property prices may not rise consistently, and there could be intermittent hurdles or growth risks. The presently cautious market sentiment is likely to continue, as headwinds to growth will prevail till the first half of 2014. However, the second half is likely to witness gradual revival in absorption. Residential real estate capital values will increase in a subdued range of 10-12% year-on-year pan-India for the whole year. Affordability will drive growth in 2014. An emerging economy is never short of opportunities, and it is time that the Indian residential real estate industry realizes where the opportunity lies. To date, the shortage of homes in India stands at around 19 million units, and 95% of this housing shortage is in the economically-weaker section (EWS) and low-income group (LIG) categories. In India, housing for EWS is defined by the Technical Group on Estimation of Housing Shortage as having a carpet area of 21-27 square meters; LIG housing includes units of 28-60 square meter carpet area. By the government's definition, EWS housing falls in the range of INR 4-10 lakh. This means that development of affordable housing will have to penetrate into the deeper suburbs of our cities, where such price points are feasible. The TATA Shubh Griha project (popularly known as Nano homes; completed in 2011) in Boisar near Mumbai was a splendid example of successful identification and auctioning of such opportunities. The project had 1,300 units, which received applications from 3,500 households. A recommendation to the government by the technical group to incentivize such projects by subsidized land, tax rebates, grants per supply of dwellings, etc. could help developers in improving the feasibility of such projects. Redevelopment activity to increase With scarce availability of land in the urban agglomeration, redevelopment will emerge as another growth driver in a scenario the cost-and-time-intensive complexities with regards to land acquisition brought forth by the LARR 2013 amendments. Indian cities present an exceptional opportunity for developers in this respect -- as per the latest available census data on households, only 50% of the residential units are in good condition, while the remaining are either merely livable or in dilapidated condition.

So, the 2013 may have been the year when both the developers as well as the lenders were waiting for policies like the REIT to roll out as well as other cost & benefit analysis. However, the direction in which the market is heading to, added with the new funding sources being cleared by the government, it seems the turnaround of the financial fortunes is just ahead in 2014.

Feng Shui (2)

MIRRORS
MYTH: They are believed to reflect, absorb, cure, and/or redirect all negative energy.
FACT: This is probably the most widely practice “cure” of negative feng shui. Can a mirror symbolically reflect things? Yes. Can mirrors enhance the perception of a small space and dark space? Yes. Can mirrors add a decorative effect to a space? Yes. If we look at this scientifically however, mirrors only reflect light, which is a very small part of the world of physics. Energy is in and around everything and cannot be totally redirected because of a reflective surface.

BALANCE: The symbolism used with reflection is very positive. Mirrors used to enhance an interiors size perception, create a specific ambiance, or added as a decorative feature are also very positive. Mirrors are not “the aspirin of feng shui” as someone once said but should and could be used as a tool to symbolically reflect aspects of life, relationships, prosperity, self-empowerment, etc. Most importantly though it must feel right to you, suit the space, and the décor of the home.

CRYSTALS
MYTH: Crystals cure everything!
FACT: All stones, gems and crystals have healing effects and benefits. For centuries different cultures and civilizations throughout the world have utilized, studied, and prescribed these natural resources as an elixir and healer of physically, emotionally, mentally troubling problems of life.

BALANCE: Understanding each precious property can be used to amazingly shift and transform energy. However, much care should be taken in regards to placement, caring for, and cleansing them. Like all the things they hold energy and need to be recharged and revitalized. Hanging crystals do not cure everything if you don’t understand and believe in the power all gems, stones, and crystals have.

DIRECTION (North, South, East & West)
MYTH: Everything in a home must be arranged according to global direction—north, south, east, and west--- and if it’s not bad things can happen!
FACT: Due to the lack of electricity and technology over 3,000 years ago when feng shui was founded, optimizing direction of placement was crucial. Knowing that a home facing east would have part of the home warmed from the sun at a certain time of the day and the other part cool in the night, was highly beneficial. Most often bedrooms were set in the west because as the sun set it would warm these areas last.
BALANCE: Very logical and understandable, but to try and apply direction, let alone get an accurate compass reading due to the huge amounts of EMF’s (electro-magnetic frequencies) in urban areas is impractical. Within interiors today, and the size and shape of the most rooms, your furniture placement would like quite funny if all you followed were direction placement.

Facts of Feng Shui (1)

Facts of Feng Shui (1)

·         According to Chinese tradition, there are 3 types of luck- which are they?

Heaven, earth, man. Heaven, earth, man are known as TIEN TI REN. If these are balanced they can bring enormous good fortune to you. Heaven luck is beyond our control, it's what was bestowed upon us at birth - where we were born, what colour our eyes are. Earth luck can be influenced by our trying to balance the natural forces of our environment. Feng Shui offers guidelines to help influence one's Earth Luck. Man luck is the luck you make for yourself - you will find it difficult to get a job if you don't look for one!

·         Which plant signifies prosperity and romance?

Peony:  In Feng Shui "enhancers" are used to help the flow of good Chi. One such enhancer are plants, as long as they are healthy! The Peony is excellent for enhancing marriage opportunities. Jade Plants are used to bring in prosperity and abundance. Yellow Chrysanthemum's are symbolic of a life of ease, happiness and joy. Narcissus symbolizes career luck, good fortune.

·         What color is considered to bring good fortune?

Red  colour is used to help with the Yin/Yang balance in homes and offices. Red is Yang energy (positive), it is considered to be very auspicious; the traditional Chinese bride dresses in red. At New Year, gifts of money in red envelopes are distributed by the matriarch of the family, to ensure a good financial year. 

The fall of rupee is attracting more NRIs to Indian realty market

The sharp dip of the rupees’ against the US dollar has increased the temptations of non-resident Indians (NRI) to buy property. Realtors are expecting an increase of 35% in business inquiries

from the expatriates this year, reveals the Associated Chamber of Commerce and Industry of India (Assocham) recent findings.

Releasing the Assocham paper on 'Falling rupee sparks property boom from NRIs', D S Rawat, secretary general Assocham said, "With the rupee riding low against the dollar, Indian residents are looking to accelerate investment plans back home". The rupee has fallen by about 34% against the US dollar since August 2011 and crossed 65 against the dollar.

According to a survey conducted by Assocham has upon nearly 1250 real estate developers in Delhi-NCR, Dera Basi, Mohali near Chandigarh, Mumbai, Kolkata, Bangalore, Hyderabad, Ahmedabad, Pune,Dehradun, Chennai etc. favorable exchange rates have facilitated the interest for buying property among NRIs.

Most of the real estate developer are saying that  the NRI traffic is primarily coming from the UAE/Gulf region, US, Singapore, Australia, UK, Canada, South-Africa etc. and the demand is more for high end properties and commercial buildings.

The Ancient Art of Feng Shui

The ancient art of Feng-shui, stems from a Chinese philosophical system that is believed to create harmony between human existence and the surrounding environment. It is a complex reserve of ancient art and science that reveals the tricks of balancing the energies of a given space to ensure good health and fortune of those who inhabit the space.

The term Feng-shui, is a Chinese term that literally translates into ‘wind-water’.  Having its roots in the ancient wisdom of Chinese culture, where wind and water are associated with good health and well being, the art of Feng-shui is based on the Taoist perception and understanding of nature and its core elements. It stems from the belief that the land is alive and is filled with ‘energy’ or ‘chi’ which directly affects the well-being of people. The ancient Chinese believed that it is the energy of the land that makes or breaks a kingdom and hence the 5 elements of Feng-shui – wood, fire, earth, metal and water are the key to unlocking the wealth and wisdom in a given space. Each of these elements are represented by various colours, and it is their concentration that is believed to being about positive or negative changes in the people’s lives by either balancing or disrupting the energy symbiosis is a space.

Historically Feng-shui was extensively used and practiced while building structures in ancient China, especially those of spiritual or religious significance, like tombs etc. Though this ancient art was suppressed in mainland China during the cultural revolution of the 1960s, it has gained popularity and has made a niche for itself, having spread to several other global cultures. Today, it is a common practice to keep Feng-shui recommendations in mind while setting up a new residence or office.