Pooja Agrawal's Blog

Home loan guide for the first time buyers

A home loan is an amount that is provided to a person helping him/her to buy a home. It is almost impossible for someone to buy a home without applying for a home loan. Plus, the given market condition doesn’t provide the required situation for buying a home without a home loan.

It is very much necessary to take a home loan because you cannot spend all the hard-earned money at once in order to buy your desired home. You will still fall short of funds even you try to save your earnings from the very start of your career. This step is practically impossible as you would need money for your basic expenses, future planning, and for the uncertain emergencies to come.

So in order to suffice your needs as well as buy your desired home, you would need to take a home loan. A home loan will help to reduce the tax liabilities along with creating an asset. Still, getting on with a home loan is not as easy as it seems. If not handled correctly, it can create issues for you in the future. You must research the market thoroughly as there are many options to choose from. Looking for the perfect home can narrow your choices too much, and you might pass over solid contenders in the hopes that something much better will come along.

Here are some points you should need to consider while applying for a home loan:

Eligibility for Government Housing Schemes: You must know where you fall among the categories entitled by the government under PMAY (Pradhan Mantri Awas Yojna). You must be among one of the following classifications in order to be eligible under PMAY:

Economically Weaker Section: Annual income less than 3 lakh INR
Lower Income Group: Annual income 4-6 lakh INR
Middle Income Group: Annual income 6-12 lakh INR up to 18 lakh INR

Know your repayment capacity: Decide on a home loan amount that you can repay without affecting your basic expenses. You must know your repayment capacity even though the bank may offer you more amount as a home loan. Ensure that your Equated Monthly Installment or EMIs shouldn’t be more than 40% of your take away income. You will still need money for your other financial goals in life.

Property Value: Financial evaluation should include the value of the property. You must know the sales price of your desired property in order to apply for the home loan. Usually, lenders provide up to 80-90% of the property price as a home loan, of course, depending on the price. For a home worth up to 30 lakhs INR, you are eligible for up to 90% of the price. As the price of the property increases the home loan percentage decreases. The maximum home loan that you can get is up to 75% of the property price. The important part is that you must pay the remaining as the down payment from your own pocket. Hence, you must plan accordingly.

Home Buying in India

A real estate is a term which is defined as a structure that is build up from ground. One word that describes it better is a Building. This can be a tower with residential or commercial space, a factory, hotel or a movie theater. Although, almost every structure can be included under real estate, people know this as more like residential or commercial buildings.

Real estate sector is one of the most recognized industries and is very critical to the Indian economy. The growth in this industry is defined by demand in housing and commercial spaces. There are many government initiatives that encourage buying a home of your own.

In India buying a home is the most important investment in a person’s life. The best part of it is that people love to buy or invest in real estate as it has better returns if done properly. Leaving the rest aside, the main preference for anyone is buying a home for themselves and the family. It is much more preferred if you buy a home at a very early stage of life. Because doing so has a positive impact and gives a sense of accomplishment.

Buying a home is not as easy as it seems. You have to make a huge financial commitment towards it and have to live a financially disciplined life. An average salaried person ends up making a saving till the later part of the life. You also have to save for the other critical decisions of life. After everything the major hurdle is the Down Payment.

HomeCapital understands the situation and hence came up with a solution. Their new idea of Down Payment Assistance Program is helping the first time buyers to fulfill the dream of buying a home.

Keeping control over your finances

In today’s time, buying a home has become a mandatory part of our lives. It not only provides a roof over your head but also gives an option for future investments. For young adults who are in the starting phase of their career, it is important to start preparing yourself financially for the future. There will be one point in your life if not now when you will find a need to buy your own house. So when that time comes, ensure that you must be financially ready to tackle all the needs and requirements.

Planning your personal finance isn’t something that is taught at school or college but it is something that you must learn yourself. The lack of knowledge can leave the youngsters unaware of how to self manage their cash flow and fall under debts. To help understand the principles of savings, let’s start with the following:

Self Control: There are many products and technologies being introduced to the market every day. It is easy for someone to get distracted from savings and spend money on things that become just liabilities. It is possible to buy an item on EMIs if you wish, however, it is better to wait till you save the money for it. Try to limit your expenses on such things that are bound to be replaced by an item better than the current one.
Think about the future: The point mentioned above resonates with this one. You must think about your future and the goals that you want to accomplish while you advance in your career. You may come across many situations that will force you to spend tons of money like going out with friends, partying, shopping but keeping control is essential. It doesn’t mean that you are not allowed to enjoy your life but you must understand what is necessary and what could become a liability. Take charge, gain knowledge, understand how to make your money work for you.
Check on your cash outflow: Sometimes there are things that siphon away your funds although you think you are saving. One way to keep a check on your expenses is to plan a budget. You should plan a budget for whatever duration you want to maybe 30, 60 or even 90 days, however, the best option is to start small. Once you realize what expenses are necessary and which ones are blowing a hole in your pocket, making small adjustments in your expenses can have a big raise in your financial condition.
Plan for contingencies: Life is unpredictable. You never know what kind of crisis you may find yourself into. So in order to ensure that you don’t blow away all your money, it is advisable to build up a contingency fund. Having such savings can help you get out of any financial trouble at the time of an emergency. And if you maintain these savings without any reasoning then you will not only save for emergency but also for your retirement or vacation or even for the down payment of your home.
Take care of your health: This one here is non-negotiable. Planning a budget for medical expenses is a must. You can consult from different insurance providers for medical insurance at the lowest rates. It may help you later down the line in case you need to visit the emergency room where treatment can cost more money than you can imagine. Maintain good health by taking important steps daily like proper diet, exercise, not smoking, not consuming alcohol in excess and even driving carefully. This will ensure that you are off paying unduly high medical bills.

Just keep in mind that you don’t need any sort of education degree or special background to be a master in the art of savings. With the help of the above-mentioned points and some patience, you can become financially successful and prosperous in no time.

Mahindra Lifespaces- Roots 2BHK

Crafted by Mahindra Lifespaces ROOTS is a residential project where harmony comes alive through thoughtful design, multiple amenities, and an ideal location. One can take the very best of life back to its roots. One can choose to work, play, socialize and enjoy life in perfect balance. It is located just off the highway, ROOTS will not only be well-connected to the city, but its strategic location will also keep away from the usual hustle and bustle. So enjoy the serene locality pockets of greenery and beautiful architecture, in personal haven. The project is connected to all sorts of services like:

Walking distance from Western Express Highway
2 minutes* from Upcoming Metro Station
5 minutes* from Big Bazaar and Reliance Trends
Close to DNA Multi-speciality Hospital
Proximity to School & Colleges, Shopping Avenues, Recreational Hotspots

Kandivali is a suburb of Mumbai which is divided into two parts, Kandivali East and Kandivali West. For the past few years, Kandivali East has been among the top developing localities of the western suburbs of Mumbai and is well-connected to the Western Highway. Ashok Nagar, Akurli Village, Complex, Samata Nagar and Village are some of the oldest areas within Kandivali East and enjoy good connectivity to the Western Highway. Amenities such as good schools and colleges, markets, banks, restaurants and parks are located within a 2-3 KM radius of these areas.

Avoiding Homebuying Mistakes

A new buyer is often faced with marketing pitfalls when buying a home. Sometimes it is due to listening to not so good advice, a degrading market, or maybe just dumb luck. However, with the correct knowledge and sense, these mistakes could be avoided.

Believing in the false hype: It is always a big NO to jump in for buying a house without doing proper research about the real estate market. You may have seen some sort of advertisements presenting their so-called best deals in the market just to attract buyers. DO NOT believe them. First-time buyers easily fall into these traps and take the wrong decision which can later cost them a fortune.
Not choosing the right agent: This is often a simple mistake that turns into a marketing disaster for the buyers. The real estate agents may seem experienced with a certified license placed on their table, however, that doesn’t mean that they are aware of everything about this territory. Some may be just working in order to achieve their sales target.
Destroying your savings: An important question stands: How much should you pay for a house? The answer is: Pay what you can afford. Submitting all your hard-earned money to satisfy your down payment for the house is a fool’s play. Borrowing money from relatives, cashing out your account without thinking about your future expenses means making a hole in your own boat.
Rejecting professional advice: If you are someone who knows everything about the market then you would not need any advice or you just won’t take one. For a first time buyer, it is far more important to know about the current market trends before you go for house hunting. Searching through online guides and books can help. Hiring a professional agent or a lawyer for consultation is always advisable.
Choosing the wrong location: Location is one of the major factors when it comes to buying a home. Even if you bought an amazing house at a poor location, it would still be a bad investment. You must choose wisely becasue that is where you would have to spend your next couple of years if not a lifetime. A location should be safe and decent. Know about it by asking the local people.
Avoiding safety inspections: The house that you see amazing from the outside may not be good from the inside. Even the best homes have flaws. Don’t overlook issues such as cracks, seepage, or any other structural damage. Don’t let the fresh coat of paint fool you. These flaws can be hidden under the fresh coat of paint or carpet letting them go unnoticed. How to spot these problems? Consider a professional to do an inspection of your house. If any flaws are found then you can ask the builder to compensate for the damage or even negotiate for a lower price of the house. Don’t try to overlook these vital inspections just to save money because you may think of buying good furniture with it but you may not know that your walls keep crumbling behind your back.

There’re various aspects of homebuying for which thorough research is compulsory. As a buyer, you must know about market trends and pitfalls. Being someone with good enough knowledge and common sense will get you much farther into the home buying process making you a proud owner in no time.

Buying home in the city of dreams

It is always said that Mumbai is the city of dreams where masses of people come for finding a source of income, settle, and fulfil their dreams. The city in itself home to millions of people who travel between the main city and its suburban areas for work. So thinking of buying a home in the city to reduce the commuting time is normal. It's the most common dream that is seen and felt by thousands of people residing in Mumbai.

So now that we are talking about buying a home in the city of dreams, let’s scope out the possibilities and options about buying a house. The first thing to do is to find a location that is feasible to commute to and from the workplace. Finding a location near to the workplace can prove to be a boon for long-distance commuters. Hence choosing a location wisely is very important.

Mumbai is very well connected with its suburbs with a vast network of roads and railways. So finding a location with a closer reach to transportation service could prove to be a blessing. If you have just started your career then it might be difficult to buy a house near your workplace and that’s where comes the commuting. Although it is impossible to eliminate it completely, it is possible to reduce the time it takes to commute.

Now that the location is decided the next step is to know your budget. The price per sq.ft area changes according to the different suburbs you are in. So determining the budget as per your location of choice is crucial. Having said that your location of choice should have all the basic necessities in close proximity for it will save a lot of travelling for any given reason.

So now another question stands, which is- Should you rent or buy a house in Mumbai? Well, it depends on many factors. First of all, you must decide on how long you want to stay at a particular location. The simple answer is that if any circumstances in your life demand you to move after some time, then renting a home is a viable option to choose or you can wait on buying a home and save up more.

Affordability is a major factor when buying a home in Mumbai. You must ensure that you can afford a home before you decide to buy one. You should do a financial assessment where you should consider your monthly income and all the expenses before you decide to take a home loan, the down payment and the EMIs. To be on a safer side make sure that your monthly instalments shouldn’t go above 25 per cent of your income. You must be practical about what you can afford and should not stretch beyond your limits even though you think you can manage later on. In case you cannot afford to buy a home now then think of renting a little longer or wait for something more affordable.

You may find that the prices of the residential real estate are rising in Mumbai, however, due to many government and private initiatives, it is now possible for a common man to be a proud homeowner in this city of dreams.

Reading in between the Lines of Subvention Schemes

Ever noticed the end note of a Mutual Fund advertise showcased on TV; a voice overplayed at 2x speed stating the disclaimer? Probably you must have noticed while contemplating on switching the channels or waiting for the show to continue. But did you ever pay careful attention to it? Heard each and every word? If not, here is what it says, “Mutual Fund investments are subject to market risks, read all scheme related documents carefully.”

But if I don’t even pay attention to the speeded garbled disclaimer, will I actually take the time to sit and read long boring offer documents?

For most the answer is “no”, isn’t it?

Yes, it is boring but what if I tell you it pays off to do so, and not just mutual fund or insurance but all finance related documents, especially property loan-related offer documents. Reading the fine print pays off. And if one can read in between the lines, nothing like it!

How?

It gives you valuable knowledge and knowledge is the power that you can use to leverage your situation.

Take Subvention Schemes for example - More commonly known as no-EMI-till-possession Scheme never fail to attract home buyers. And why not? A scheme where all buyers have to do is pay 10 to 20% of the property value up front and the rest amount is paid by the bank in installments to the developer under a three-way contract between the buyer, developer, and the bank. While the developer bears the interest until the project is under construction, the buyer’s EMI starts only after he gets the possession. A scheme too good to be true, isn’t it? You are right to have your alarm bell ringing.

Subvention DOES NOT help cut costs. Pre-EMI that a developer bear is merely an extension of interest that the developer pays on behalf of the buyer. The buyer still ends up paying the entire amount of EMI calculated on the basis of his loan as the principal amount remains the same. Under all the gloss, Subvention schemes are like any other construction linked scheme with the added benefit of the time value of money. Meaning that it helps home buyers buy time to pay off. In fact, Subvention schemes are priced at a lower discount as compared to other construction linked plans.

So how do I make good out of this scheme?

There is still hope to make the best out of this scheme. How? By knowing more about the scheme. Remember knowledge is power.

I. Subvention schemes are of three types

No Interest till possession
Time-bound meaning the developer will bear the interest till a decided period eg 18 months contract
A shared interest in a certain ratio between the buyer & developer

Amongst the above, only no interest until possession is beneficial to the buyer. Rest bear the possibility of raising the ticket price if the construction gets delayed.

II. Subvention schemes are most useful to those paying rent as it saves them the dual burden of EMI and rent at the same time.

III. The ratio of the three-way agreement should be such that the buyer has to pay the least down payment. If the down payment is more than 20% then the scheme is not worth the cost put in.

Lastly, the credibility of developers matters most. If the developer delays in payment of Pre EMI, it directly impacts the credit score of the buyer.

Having said that, subvention schemes are not all that bad provided you take the above factors into account. But now let's talk about the elephant in the room - Down Payment. While the subvention scheme handles the home loan, a working-class Indian still struggles to buy home and one of the biggest obstacles is accumulating enough savings to pay down payment.

India’s first Down Payment Assistance Program to rescue

HomeCapital’s home down payment assistance program facilitates interest-free loans almost equivalent to the contribution towards the down payment. What this program does is provides immediate liquidity to book your dream home. The buyer will repay the same in installments until the possession is given. So by the time home loan, EMI starts the buyer has already paid off down payment assistance, leaving him free of the dual burden. A win-win situation!

The hope of revival for the Real Estate

Right now the real estate industry might be in the state of low spirits but it is still the best option to put your money on when compared to other alternatives. It is a business that has served its purpose to almost every entrepreneur in some or the other way. It is the easiest way to generate funds for any sort of purpose such as politics.

Picking up an enigmatic land and waiting for it to turn to gold is one of the tricks under the sleeve which is used by most of the buyers and businesses. However, there’s no clarity in how the system works which the real estate sector is observed as a vague business giving a bad image to it.

This is now changing as the Indian Government is trying to make it simple and lucid with the implementation of RERA or Real Estate (Regulation and Development) Act, 2016. This ensures that there is transparency on how the system works that benefits the buyer. Now the developers cannot delay the project and if done otherwise then the buyer has to be compensated.

Keeping aside the fact that the real estate industry is a place full of uncertainties, our government is trying to ensure that this industry should be backed up which is important for the country’s economy. The plans and initiatives by the Indian Government are increasing the curiosity among the population about buying a home. The needs are fully sufficed however the financial problems have to be solved by the buyers.

In order to keep the momentum going, HomeCapital introduced their Down Payment Assistance program that helps the buyers satisfy their down payment needs and buy their dream home early in life rather than waiting for years to accumulate savings.

This powerful and innovative idea has helped millions of home buyers bringing a positive change in their lives

Changing trends of the Real Estate industry

If you look a few years back, the real estate market was somewhat in a crumbled state due to the falling economy of the country. Lower demands, unsold inventory, and a situation of buyer’s market gave a huge blow to the real estate industry. However, soon after the turn of events, the conviction of this industry improved as the homebuyers preference changed to buying larger homes across cities.

There has been a lot of improvements in the economic conditions with the launch of various government plans and initiatives during the years. It was aimed towards increasing the buying capacity of the populace. This has created a path for fast-paced economic growth for the future. Right now the residential segment is the topmost priority for the real estate market. The movement of the masses from different locations towards the cities for multiple reasons have created a commotion in the market letting the developers shift a notch up the building process.

There is an existing but concealed stipulation for residential projects among a large section of the population. The reason being a change in the lifestyle and the need for a better income source. The reduction in the repo rates by RBI has helped to raise the budget of the home buyers to buy homes at comparatively low-interest rates. The schemes and plans incited by our government are imposed on the financial sector which in turn helped the real estate sector as well. The latent investors are encouraged to buy their dream home at affordable rates. This ensures that the market wheel keeps rolling without any hitches and satisfying the needs of both the buyer and the seller.

Many developers are strategically placing their projects to attract more buyers and bring back the lost flow of the real estate market in the coming future. With many provisions from the government, it is likely that the demand and supply of the residential housing market are expected to rise.

Among many provisions, HomeCapital with their Down Payment Assistance Program has proved to be a blessing for the first time homebuyers. The plan works in such a way that it enables the buyer to buy their dream home now, maybe even in your 20s, without waiting for years to accumulate funds. This program works with an objective to solve the biggest hurdle towards home ownership i.e. Down Payment. This is the major reason why buyers are unable to fulfil their dreams and settle for cheaper options or live in a rented home.

To fulfil the dream of every home buyer, HomeCapital helps with credit free assistance of up to half of the down payment equal to the buyer’s contribution towards it. This amount is repayable during the subvention period which ensures that the repayment does not affect the home loan eligibility or over-burden the buyer with a higher debt-to-income ratio in the future. By contributing up to half of the down payment needs, HomeCapital cuts the waiting time by half and helps the buyer buy their home earlier and experience the compounding effect of wealth.

My dream of home buying Fulfilled

It was a long-awaited wish of mine that one day I would live in Mumbai in a self-purchased home. It is a dream that is not only seen by me but also almost everyone who has worked hard to see this dream come true. If we look a few years back then we can tell the difference between the prices of the residential homes. They have skyrocketed and the people who saw the dream of owning a home that time after a couple of years, the rise in the prices have washed away their plans.

Since I worked in a reputed private firm, I was earning a decent amount and the second part was I was a single earning person living in Mumbai. The earnings from my father were sufficient enough to suffice the needs of our family and hence I didn’t have to contribute to fulfilling the needs of the family. So I decided to save up to buy a decent house of my own later down the line.

After amassing enough funds I was ready to take the biggest financial decision of my life i.e buying the house of my dreams. However, I felt that I couldn’t spend all my hard earned money at once for the down payment and then to get a home loan for buying the house. The property that caught my eye was the Platinum Tower 31 in DN Nagar, Mumbai. This place was in close vicinity to my workplace and was well connected to other suburbs. The location of this project shared excellent connectivity with DN Nagar Metro Station, Western Express Highway, Domestic & International Airports, and Andheri Station of Western Railways.

It was the perfect home one could find, however, the down payment was the biggest challenge for me. I searched the internet for something that could help me buy my home along with some of my savings for the future. Just when I thought that I couldn’t fulfil my dream and should give up on this house, I found the website of HomeCapital that showed a ray of hope. They had this program that was known as Down Payment Assistance for the home buyers. The best part was the property I was looking for was listed under their offering of this program.

This program helped the buyers by providing up to half of the down payment amount which was in the form of interest-free credit. It was the perfect opportunity that I couldn’t let go. I contacted them and they helped me by making my home buying journey hassle-free. I would recommend everyone to check out HomeCapital’s website if you are looking to buy a home.

Qualifying for a Bigger Mortgage

A mortgage loan or simply mortgage is a term used by the buyers to buy real estate properties. For a buyer, to be eligible for getting a mortgage or home loan is crucial as there are multiple underlying factors that are taken into consideration. Financial planning is necessary in order to decide on the desired home and the funds to fuel its buying.

Before we get into the question of how can you be qualified for a bigger loan, let's take a look at how to asses your financial situation first. The important factor is that financial planning is not something that could be done just before buying a home, it is a constant process that should be started from an early stage. It is a fundamental rule that maintaining a financial discipline is essential to fulfilling your home buying dream.

Assessing your financial situation means that you should tick all the necessary boxes which include:

Monthly Expenses: In order to properly gauge whether you are financially ready is to keep an eye on your monthly cash outflow. Try to limit this outflow up to 25%-40% of your income.
Decide your loan amount: The home loan amount depends on multiple factors such as the property price, age, income, credit score, and more. Any lender would provide up to 80%-90% of the property price. Hence it is important to decide on your budget and decide on the loan amount.
Existing Debts: Knowing about your existing debts and loans beforehand can be beneficial. It is important to clear all the existing liabilities before you can apply for the home loan.
Contingency Funds: Making a separate emergency fund account is a good option which can be helpful at the time of any uncertainties.
Regular Income: It is very much important to keep a regular income source in order to maintain a balance with the monthly cash outflow. In the absence of an income source, the plan of buying a home could go for a toss.

Apart from the above-mentioned factors, there are other financial elements as well and it is quite important to keep a check on them.

Now let’s answer the first question- How can you qualify for a bigger loan? Being eligible for a home loan is not an easy task but a complicated process. The lender shall consider your assets, the current liabilities, and your income. However, in order to qualify for a bigger loan you can check out the following:

Rental income: In case you have a house sitting ducks in your hometown you can lease it and generate an additional source of income which can improve your loan amount.
Increased Tenure: Your age is an important contributing factor when applying for a home loan. Lenders tend to lean towards youngsters who have a potential repayment capacity. However, the maximum repayment period allowed cannot exceed 30 years.
Joint Home Loan Application: If you are married and if your spouse is also earning then it is a good option to go for a Joint Home Loan increasing your home loan amount significantly.
Don’t Hurry: Take your time to research the market, check your credit score, rectify any errors in your financial planning and get a clean credit report. If your credit score is high enough then the lenders would be more than happy to offer you a home loan along with other diversified benefits.
Opt for Step Up loans: Under this scheme, the lenders would provide loan at lower EMIs and gradually increase the EMI as the loan is repaid.

Buying a home in your 20S

Buying a home early in your life brings a lot of joy and a sense of accomplishment for you. We all know that investing in real estate is an involved challenge. It takes years of saving and patience to meet the financial needs of home buying. Buying a house is the most expensive investment and in order to do it, smart financial management is necessary. If the process is managed wisely, the home you are waiting to buy later down the line could be yours within a few years.

Certainly, making such investments earlier will give you higher chances of reinvesting and doubling the returns. Buying a home early has its own benefits. Some of them are:

Future investment: The house is the biggest investment that not only provides a roof over your head but also opens the door to future investments in case you are willing to move on after a couple of years.
Better spending habits: The decision-making process is reconstructed when young buyers learn to invest smartly and to save & spend wisely.
Tax benefits: Young homebuyers are eligible for better loans and tax benefits. They can also enjoy the fruit of extensive capital gains.

It is not only about saving funds for the property but also planning a budget that is affordable. It should correspond to your career growth and earnings as well. The important point here is to make the right buying decision, save at least 20-25 per cent of the value of the property before buying and the rest could be from a home loan. It is also essential to maintain sufficient balance for any emergencies and other necessary expenses which is similar to crossing a two-way street after watching both sides. Youngsters are more eligible for a bigger loan depending on the value of the property. Banks also allow a longer tenure for the repayment of the loan in monthly instalments.

There’re a few points for a young buyer to keep in mind when looking to buy a house:

Planning: One should consult for opinions from different banking institutions to know more about the process of home loans including documentation, rate of interest, repayment tenure and more.

Location: After a long day at work, long commuting can become frustrating. So it is crucial to choose a location near your workplace. It can help in saving time and efforts, thus, maintaining a healthy balance between professional and personal life.

Guidance: A young novice buyer needs extra guidance when it comes to buying a house. Many legal contexts such as land titles, approvals, compliances, housing benefits, government plans, etc can be easily understood with the help of a consultant or expert.

This perfectly laid out plan can work in your favour if a financial discipline is maintained. Try not to shift your focus towards any sort of unnecessary expenses. Try to give precedence to savings and asset building. If followed properly, a young buyer could become a smart real estate owner.

Even though everything works out the way we want, there is something that needs our attention. It is the Down Payment, something that we know about which becomes a major financial burden on most of us. Remember the above mentioned 20-25 per cent savings? Yes, those savings would fuel your home down payment needs. This may prove as the biggest hurdle between the buyers and their home. Not having enough funds means that homebuyers would turn to find cheaper options or live in rented accommodation for longer than planned.

HomeCapital’s Down Payment Assistance Program can help you overcome that hurdle and be one step closer to your dream home. This program offers a first time home buyer no-cost down payment assistance in the form of interest-free credit equal to the buyer’s contribution towards the down payment. The assistance is repayable in equal monthly amounts without any form of fees or interest. This unique program allows you to buy your house today without the need of waiting years to generate savings.

Buying a house is a huge responsibility but if done correctly, then, you can become a homeowner in your 20s!

Redefining the HomeOwnership

There are many factors to look upon before deciding to buy a home. One of the important aspect for getting a loan is Credit Score. A credit score is a number that denotes how honestly and timely are you paying the installments. It shows as a report to all the financial institutions and that’s what they check before sanctioning any type of loan.

Why credit score is important? How much credit score is good? Anything between 700-800 is considered a good credit score. Below 300 the lender will reject any and all loan requests. Before applying for a loan or to specifically say ‘Home loan’ better check the credit history. However, even after that there are other factors based on which the home loan request is looked upon.

Even after everything is clear, the last hurdle that remains between a buyer and home buying is the need of down payment.Most of the people end up saving for the down payment for their entire life missing the opportunity of buying a home at the right time.

HomeCapital is India's first Down Payment Assistance Program, revolutionizing the house ownership and changing lives of millions of home consumers through their Interest Free Down Payment Assistance application using their comfortable interactive platform. By combining actual property, finance and technology, they've pioneered the solution to the biggest hassle of Down Payment in home possession. Discover a very new way of domestic ownership through HomeCapital.

HomeCapital Program

Everyone wishes to buy a home in their dreams, but shopping for it at an early degree of lifestyles is more essential. Buying your own home is in every person’s dream, but doing so isn't always an easy challenge. In India, the maximum of the population is job oriented and prefer to paintings in most important towns.

For example, Mumbai or additionally known as the financial capital of India attracts a swarm of human beings every year by means of growing process possibilities. Now, of course, absolutely everyone would want to stay inside the near proximity from their jobs. People will opt to stay near their jobs and critical offerings like colleges, hospitals, transport services and so forth. So looking for a home that ticks all of the tick lists is what all and sundry needs. Still, buying a home is not as easy as taking into consideration shopping for. There are a couple of elements that affect one’s home shopping for choice. They include factors like Evolving Family Structure, Demographics, Affordability, the choice of buying or renting and plenty more.

The maximum crucial of all is to decide whether or not to shop for or to lease a house. Well, both have their own blessings and losses. Here’s a small evaluation among buying and renting:

Buying:

Having a domestic offers an experience of ownership & pride. It also offers lot-needed protection & balance.
On buying, monthly EMIs are eligible for tax deductions.
Can make your home negative

Renting:

Less balance as there is a possibility of being requested to vacate. One needs to be very cautious and accountable for the use of rental property.
No tax benefits on apartment fees.
One can make investments the money stored on renting towards shopping for unique asset classes which include fairness, mutual budget, gold and so forth. Which offer similarly accurate returns.

Macroeconomic elements additionally affect the house shopping for decision. They include Interest Rates, Property Prices, Income tiers, Government of the day as such. The economic situation should additionally be assessed before going for the house mortgage. Now, whilst this curve comes we try to accept the reasonably-priced houses and compromise on different necessary elements like our mental and physical fitness. Not to forget about that all of us try and do that on the later level of our lifestyles and fall short on finance and time. You can also refer online guides that would help to simplify your approach towards home buying.

An agency thought approximately it and came up with a clear and simple idea- Give all and sundry the opportunity to shop for a home at an early stage in existence. An India based employer that specializes in Down Payment Assistance reduce the ready time for domestic consumers to build up savings for the down payment. Down payment help is given within the form of interest-free loans through their partnered institutions.

It's an absolutely effective and modern concept bringing an advantageous change to the lives of hundreds of thousands of domestic buyers.

Buying Home with Down Payment Assistance

Buying a home at an early stage of your life is one of the greatest achievements and investments. Buying a house is a necessity but you also must make a substantial financial commitment towards it. When it comes to meeting the down payment requirements of a home, it can get tougher. You have to part with a substantial amount of money in one go to meet the down payment of your chosen house.

There’re many traditional ways of arranging funds for your down payment which are as follows:

Borrow money from family and friends.
Saving a fixed amount from your salary for some time.
Liquidating your contingency funds like FD, mutual funds or even selling your property.
Taking a loan against your property
Taking a loan from the bank or any other lending institutions.

Along with all the above-mentioned ways of raising the funds for the down payment, a novel and unique method have been introduced to the Indian populace recently. An enterprising fin-tech company named HomeCapital has introduced an interest-free Down Payment Assistance (DPA) Program for the first time home buyers.

It is their conviction that everyone ought to get an opportunity to buy a home at an early stage of their life. They help the buyers meet their down payment needs for buying the house of their choice. HomeCapital has tie-ups with the best financial institutions and real estate groups in the country.

It has pioneered the Down Payment Assistance Program through its technology platform and brings together financial institutions, developers and home buyers together to facilitate the home-buying procedure. On the projects listed in the Program, homebuyers can apply and receive Interest-free down payment assistance. An in-depth guide is also provided in the Indian context for the home buyers which will take you through various stages of home buying, detailing the factors affecting the decision at each stage and help you make an informed decision weighing all facts and figures.

So, thanks to HomeCapital, you can now get an interest-free loan for a home down payment requirements if you are a first time home buyer and purchase your dream home today rather than some time in future.

Those millions of prospective homebuyers who are eligible for a home loan but face the down payment hurdle, HomeCapital expands the offerings by regularly including new projects in the Program.

HomeCapital has revolutionized the process of home buying in the current times. It’s no longer mandatory to wait for a long time to collect your savings to meet the down payment requirement for your new house. You just have to become a Member of HomeCapital DPA Program to avail the benefits of the same. To avail the benefits of the HomeCapital Down Payment Assistance Program, all you need to do is to go on their site and register yourself to become a member. You, then, become eligible for around 50% of the total down payment requirement that’ll be provided to you as an interest-free loan given that you meet their eligibility criteria.

Gen Z and Shifting Views about Home Ownership

A few decades back, the only time a fresh out of college fledgeling would consider buying their own house was when they contemplated marrying and even then within a joint family system they saw buying property as an investment. But with time, escalating rents and increased self-independence, the robust Gen Z is showing an inclination to own home by the time they turn 27. The latest Homebuyer Insight Report shows a majority of prospective homebuyers between 18 and 23 who want to buy a house in the next 5 years. About 52% of the above numbers have already started saving for their own property.

The report dwelled on three major aspects of Home Ownership:

Top reasons for wanting to own a home
Major setbacks for buying a home
Will they accept financial aid to buy a home

Starting a Family is the major drive for homeownership:

About 59% of Gen Zer s admitted that starting a family was the driving force for owning a home followed by owning property as an investment to build wealth over time.

Saving for a down payment is the biggest barrier:

66% of young prospective buyers identify saving for down payment closely followed by covering the monthly cost of owning property (EMI) as top barriers.

Gen Z ers are ready to make sacrifices including asking for financial aid to buy a home:

61% admitted that they will do whatever it takes to own property including asking financial aid from relatives or lenders.

In a gist – Young buyers are inclined to own a home but down payment still remains a challenge. Not having enough down payment means settling for cheaper options or having to depend upon family borrowings, expensive personal loans or your future savings. Not having adequate down payment may also lead to higher Loan-to-Value (LTV), higher interest rates and consequently higher Equated Monthly Installments (EMIs). And though parents and relatives might readily help out, the fiercely independent young buyers would rather prefer other sources. So what other options do they have?

Down Payment Assistance Program is a form of the interest-free personal loan equal to your contribution towards the down payment. HomeCapital is India’s first home down payment assistance program that addresses the challenge of the down payment for home buyers and lets you buy your dream home today. Started by a team of professionals from varied fields, the program will provide up to half of your down payment requirements. The program lets you double your down payment capability and widens your reach in terms of home affordability. It increases your home loan eligibility and makes your home buying faster and simpler.

The Transformation of Real Estate

Among the list of various industries, the Real Estate sector is one of the most promising fields for investment. Buying a property gives you a means of a future investment option even though you might think of moving out after some time. It is very much possible to rent out your house after you move out and get a source of regular income. So it is suggested that you should start saving early to finance buying your desired home.

A question still stands- What are the needs of the buyer? The most important aspect of real estate developers is to tap into the buyer’s requirements. Among a large list of necessities, some of them are finance, affordability, location, amenities, etc. Right now, due to unsold inventory, the developers are in constant turmoil with emptying the inventory and resulting in the availability of affordable housing.

The developers are trying to attract buyers using various offers along with the property which seems nice but in the long run, it doesn’t add any value to the property. Although it may seem that the real estate market is somewhat deep in the mud, we can definitely count on it to rise back. As the trends of the market change, the needs and demands change as well. It is expected that the Real Estate Sector will rise up to $1 trillion by 2030 contributing more than 13 per cent to the GDP of our country.

The need for living space is supposed to increase in the years to come due to the increment of nuclear families, growth in urbanization, rising income levels and more. The growth in urbanization and opportunities are attracting more people towards the cities and satisfying every housing need is going to be an involved challenge. The government has initiated housing plans such as PMAY or ‘Pradhan Mantri Awas Yojna’ and Housing For All in order to fulfil as many needs as possible.

Our government has been concerned about the real estate industry. In August 2015, 100 Smart Cities projects were approved by the government. Similarly, PMAY has reached a mark of 25.69 million homes up to May 2019 out of which 8.09 million houses are approved. There are many initiatives from the government available to the public however, there are some initiatives that are held by private organizations but are still dedicated towards the homebuyers.

As we all now that buying a home is a dream that everyone wishes to fulfil, however, the major hurdle that is faced by the buyers is the down payment for the home. In order to help people complete their dreams, organizations such as HomeCapital is providing up to half of the down payment requirement with their Down Payment Assistance Program.

The conclusion is that with the help from the government and private organizations buying a home is no more a concern for the common man. However, as a buyer, it is important to know about the market pitfalls and for that, it is important to research the market thoroughly. There are multiple guides available on the internet that helps the first time buyers to avoid the most common mistakes while home buying and become a proud owner in no time.

Real Estate under Embargo

The condition of the real estate market is somewhat a rollercoaster ride both for the developers and the buyers at the same time. The rise and fall of the market are making this industry full of uncertainties. Buying a home is now more complicated for the end buyers and hence most of them turn to choose to live in rented accommodations and wait for the prices to settle to an affordable rate.

The affordability is what a common man is looking for because of the limited cash flow. The only factor that stops a person from becoming a homeowner is finance. Well, of course, the most common answer would be ‘take a home loan instead’. Although this is the most common answer or say an insightful opinion, taking a home loan is just a solution that could be seen as the tip of an iceberg whereas the real deal is beneath the surface.

For buying a home one would need to save for the down payment along with all the basic necessary expenses such as for the basic needs, future planning as well as any and all emergencies to come. With all such possibilities, it becomes very difficult for a person to look up to buying the home of his dreams.

Now when talking about the real estate market the developers are cautiously playing their turn as the sales of the homes have declined drastically. The developers are putting the majority of their efforts into clearing the inventory rather than creating more housing space. As mentioned earlier affordable housing is what every developer should really aim for. For most of the buyers in metro cities, a property priced at 50 lakh or below is the sweet spot.

Although the 50 lakh mark is what seems affordable, real estate developers cannot make their inventories available at such a price as it would mean a loss to them. However, with some sort of financial aids such as HomeCapital’s Down Payment Assistance Program, the buyer can think about buying the desired home. They have also partnered with many real estate developers to include their projects under this financial aid for the buyers. There are multiple projects by renowned developers that are listed under the offerings of HomeCapital on which they provide down payment assistance.

The residential segment of the real estate market has been experiencing letdowns and due to many government interventions such as demonetization and GST. This has created a crack in the crust of the real estate market and the impact was felt by overall. What is the best part you ask? Well, projects with affordable housing are starting to emerge in order to attract more and more buyers. Coupled with it are the initiatives by the government such as PMAY (Pradhan Mantri Awas Yojna) where the government has promised housing for everyone.

As a buyer, we should be careful about the pitfalls that are prone to be present in such scenarios. In order to tackle such mishappenings, one should research the market thoroughly before making a move. There are multiple online sources that not only provide information on the market trends but also guides the buyer in the home buying journey.

An insight on Affordable Housing

Whenever the question about whether or not buying a home stands, the question about finance rises along with it. Buying a home is considered as the biggest financial investment. Hence, people tend to choose something that is more affordable. While the price of an affordable home can be tempting, as a buyer it is important to examine the challenges associated with such projects.

The demand for affordable housing is very high in India. The buyer can face the challenge of timely delivery of the residency which still remains a test to be cleared. A buyer must be thorough with the market trends which will be helpful to overcome the hurdles in the journey of home buying. There are many sources online that provide homebuying guides for the first time buyers.

One of the major drawbacks in affordable homes is that they are located in areas which are far from the major cities to where people mostly go for work. Buying a home in such places can add to the commuting time leaving the buyer with a stressed life. These points are very important and should be kept in mind at the time of buying an affordable home. This is the reason why the involvement in these projects is much lower even though the demand may seem higher.

According to the recent rate cut by RBI, the term affordable has got more importance and is giving a clear indication for the homebuyers to convert into homeowners. This rate cut will certainly lower the interest rates charged by the banks on home loans which in turn will reduce the number of monthly instalments.

The current situation shows the signs of a buyer’s market. So the prospective buyer is eligible to bargain for a lower price and extra discounts. This trend can be seen across multiple cities where the inventory is sufficient enough to meet the demands of the buyers but the buying indication from the buyer is low.

The initiatives from our government are a form of encouragement for the people in order to promote home buying. Other provisions such as HomeCapital’s Down Payment Assistance Program is also another way for people to buy their dream home early in life rather than waiting for years to accumulate savings.

MY BLOG