Top Factors Pushing Housing Loan Market in India

In these challenging times of global economic crisis where businesses and markets have seen a drastic downward phase due to the rapid arrival of the COVID-19 virus on the horizon, it has significantly harmed the Indian real estate sector that was already affected by issues such as cash constraints, regulatory and procedural reforms. However, given the current situation, it is reassuring to see that experts believe the house loan industry in India would grow at a CAGR of roughly 22%.

The main forces driving the housing loan sector in India are the salaried/business class, cheap home loan interest rates, enticing developer schemes, monetary measures, government policies, regulatory backing and shortage of housing in India.

1. Salaried and Business Class- This section has realised the importance of residential rental payments equivalent to the EMIs that they will be required to pay for their properties. As a result of the circumstance, more people purchase residential spaces using home loans rather than renting.

2. Lower Home Loan Interest Rates- They are the key drivers of the home loan market. India continues to have one of the lowest home loan interest rates in the world. It currently has the lowest home loan interest rate among emerging countries. Indians are investing in real estate due to the decline in interest rates offered on savings and FDs.

3. Enticing Developer Schemes- Such schemes are another factor that encourages buyers to take home loans with the availability of enticing building incentives. It includes late EMI payments and programs depending on construction.

4. Monetary Measures- They are yet another factor pushing the market. The Reserve Bank’s economic policies are propelling the Indian home loan industry. The country has already seen higher-ever repo and reverses repo rate reductions to provide effective relief during COVID-19.

5. Multiple Government Policies- Policies like the Pradhan Mantri Awas Yojana (PMAY) is devoted to its objective of “Housing for All”, under which the Credit Linked Subsidy Scheme (CLSS) for the Middle-Income Group (MIG) has been extended until March 2021 as a result of this.

With this knowledge of the various factors pushing the home loan market in India, select the best institution offering the most economical financial instrument for loan purchase. Being aware of this information will help in making an informed decision, enabling the loan applicant to find the most suitable Home Loan option.

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Here Are 4 Things to Consider When Applying for a Housing Loan

If this is your first home loan, you may have many questions, and there's a good possibility you'll overlook certain important considerations. We've done the legwork for you and compiled a list of everything you need to know before applying for a housing loan in India- 

1. The eligibility criteria- For home loans, different lending organisations have different eligibility standards. The age brackets for loan approval and the income requirements are the most important factors to consider when availing housing loan. This is because both are inextricably linked to a person's earning potential and ability to make timely payments.

2. Credit score- Borrowers with a high credit score may qualify for a cheaper interest rate on home loans from some banks. Your credit history can assist you in obtaining a better home loan deal from a bank. Most banks and other lenders regard a credit score of 750 and above to be a good credit score as a rule of thumb.

3. Your budget, down payment and EMI- Define your home-buying budget, including how much money you can put down as a down payment and how much of a mortgage you'll need. Next, determine the EMI range that you are comfortable with, as this will aid in determining the loan's term. Finally, you can use online home loan EMI calculators to experiment with different possibilities.

4. Documents required- Lenders will also want you to produce paperwork demonstrating your eligibility. Again, the necessary documents for a home loan may vary by lender, but the following are the most common:

• KYC documents like Aadhaar card, PAN card, election card, and others

•  Address proof like utility bills

•  Identity proof like driving license, election card, and others 

•  Passport size photograph

•  Income proof like Form 16 or salary slips for the salaried and last 6 months’ bank account and financial statements for the self-employed

• Business proof for the self-employed

With trusted Indian Companies offering housing loans avail, the Mortgage Loan at minimal documentation procedure and flexible repayment tenure. Use the Home Loan EMI calculator to estimate your monthly outflows and improve financial management, along with taking advantage of various housing schemes in India. To qualify, simply meet the easy home loan eligibility criteria and submit the documentation required to process the loan and await loan approval.

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Lesser-known Pointers That Can Affect Their Home Loan Rates

If a family wishes to buy a house with the help of home loans in India, they may do so and move into the home of their dreams. However, the option comes with house loan interest, which the borrower must pay in addition to the EMI amount during the loan term. It means that their home loan EMI has a long-term impact on their income and expenses. They might get the lowest home loan interest rate if their CIBIL score is higher. They can pay lower EMIs and better manage their spending if they get the best home loan interest rate. When it comes to home loan applications in India, the CIBIL score is one of the most crucial indicators that lenders assess. For the best home loan interest rate, a CIBIL score of 750 or more is suggested. Borrowers may improve their CIBIL score by repaying their loan EMIs and other bills on time. 

The following elements that lenders may consider when determining a borrower’s interest rate are the location and value of the residence. For example, the value of a property may increase if it is located in an area with growing infrastructure and facilities. Additionally, a property’s value may be higher if it is close to an airport, a train station, or a bus stop. Therefore, the approved house financing amount may be higher in this scenario due to the lowest housing loan interest rate.

If borrowers use their credit cards for several transactions and make timely payments, their credit score may arise. This can help them get the highest interest rate on their home loan. However, if they use a credit card even if they pay the minimum due on time, the interest rate on their home loan would be higher. Therefore, they should spend more than 40% of their credit limit if they have any loans to apply for and desire a lower rate.

Compare all available home loan offers on a third-party website and choose the one that best meets finance needs and payments capacity. If the applicants follow the advice mentioned above, they should get the best home loan interest rate and pay lower EMIs. Choose from numerous Housing finance companies which have low-interest rates, a 30-year tenor, a high-value sanction, and the option to transfer home loan balances. Simply meet the primary home loan eligibility requirements, submit the required paperwork, and wait for the loan to be authorised.

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Top Factors that Can Increase Their Home Loan Eligibility

Borrowers need to meet certain eligibility criteria for getting housing loan from banks and financial organisations. The eligibility criteria set by banks and Housing Finance Companies are too high to reduce the number of non-functioning assets of the financial organisations. These eligibility criteria include a good credit score, work experience, the person’s income, previous loans if any, citizenship, and much more.

 In addition, various documents need to be submitted by them to the loan provider to prove their eligibility. These include KYC documents, Income proofs, passport size photographs, and proof of the existence of business from the last five years (in the case of self-employed individuals), account statements, and much more. Loan is not granted to the people who cannot prove their eligibility.

Various factors help in increasing the home loan eligibility, which includes the following:

• Adding a co-applicant, in this case, if a person is not eligible as per the financial organisation’s criteria, they can add a co-applicant such as a family member to increase their chances. 

• Maintaining a credit score above 750, this includes paying regular credit card and debts. If a person has a credit score of around 800, companies tend to provide them loans easily. 

• Choose a longer tenure, A borrower who chooses a longer term for repayment has more chances of securing a loan than the person who prefers a smaller tenure. 

• Declare their additional income sources. A person with more income sources gets a loan easily as it shows a high repayment capacity.

If a person wants to increase their chances of meeting the home loan eligibility criteria, they should fulfill all the above criteria. 

With these housing loan facts in hand, the borrower will be able to spot an advantageous deal. A great home loan will include a low-interest rate, a tenor of up to 30 years, a high-value sanction, and a Home Loan Balance Transfer facility. To qualify, simply meet the easy home loan eligibility criteria, and submit the minimal documentation required to process the loan and await loan approval.

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Less Known Pointers that Can Affect your Home Loan Rates

A home loan is a secured option that comes with a longer tenor. Opting for a longer tenor may reduce your home loan EMIs. 

It may help you to manage other outlays in the month easily. But, you also have to deal with a higher home loan interest rate. 

But other than a longer tenor, many less-known factors also affect the interest rate of home loan in India. 

Let’s know more in this quick post so that you can avail yourself of the lowest home loan interest rates in India!

1. The location and value of your new home 

If your home that you want to buy using a home loan is located in a well-known place with basic amenities, you may enjoy the lowest home loan interest rates. It is because your lender will find it liquidating your property easier if you default. Also, the value of your property determines the applicable home loan interest rates. 

2. Your credit utilization 

If you have a credit card or avail yourself of another credit line and used a large part of it, you may not get the lowest home loan interest rates. It is because your lender may consider you to be depending on your credit limits to manage expenses. Hence, while applying for a home loan, ensure to lower your credit utilization. 

3. Your debt to income ratio 

If you have already many debts on your head, a large part of your income may go towards your EMIs. In this case, your income may not have room to make way for another loan. Even if a lender approves your home loan application, it may be at a higher rate. 

You are now aware of elements that most borrowers don’t consider while applying for housing finance. You should consider them and work on each of them to enjoy the lowest home loan interest rates. 

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Know the Facts about PM Awas Yojana and its Subsidy

The Pradhan Mantri Awas Yojana (PMAY) is a housing scheme of the Central Government of India. 

Under this PMAY housing scheme, there is a provision to build affordable houses all over India. They are to be constructed using eco-friendly and sustainable technologies. 

Besides this, the Pradhan Mantri Awas Yojana also offers an interest subsidy on home loans. 

Under this, it is possible to enjoy a home loan subsidy of up to Rs. 2.67 lakh and 6.5%. 

The home loan subsidy is awarded across income groups of applicants whose income ranges between Rs.3 lakh and Rs.18 lakh annually. 

If you want to know more about Pradhan Mantri Awas Yojana and its subsidy, you should go through this post!

Vital Pradhan Mantri Awas Yojana facts at a glance 

1. If you want to book your first-ever pucca home, you can avail of the home loan subsidy on the interest rate and enjoy savings. The home loan interest rate subsidy can also be availed as per your income groups. Income groups are Economically Weaker Section (EWS), Lower Income Group (LIG), and Middle Income Group 1 and 2 (MIG 1 and MIG 2). 

2. A women applicant is given priority in the allotment of ground floors. It is done while allotting the homes. Differently-abled citizens are also given preferences while allotting ground floors for homes. 

3. The home loan interest subsidy is given up to 6.5% to the tune of Rs.2.67 lakh. 

4. The usage of eco-friendly and sustainable construction materials is permitted in the construction of affordable homes. 

5. The Government seeks to construct about 2 crore affordable homes in key urban areas for eligible customers. 

6. The focus of the Government is to uplift the standard of living of people in areas where low-cost homes are being built. 

If you wish to avail the PMAY benefits and enjoy interest subsidies, you can check your eligibility and get started. 

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Top Key Factors that are Boosting Home Loan Markets In India

 There is no denying the fact that the world is facing an unprecedented economic crisis owing to COVID-19. 

Even during this bad time, experts believe that home loan markets in India would experience a CGAR of around 22%. 

But, what are the factors responsible for driving the home loan market even during this dull period? 

One of the factors being held responsible is the improving living conditions of people in India. 

On that note, let’s check out the vital factors boosting home loan markets in India!

1. Affordable current home loan interest rates

Nowadays, you can see all top banks and non-banking finance companies (NBFCs) offering their current home loan interest rates really low. It has worked as a great opportunity for homebuyers to avail of the same and to manage lower EMIs. 

2. Residential rents are now equivalent to home loan EMIs

Despite paying a higher rent amount per month, the home you live in does not become yours. On the other hand, rents in key metro cities are now equivalent to the home loan EMI amount. Thus, it propels an applicant to avail of a home loan, pay EMIs per month and make it their own after the tenor. It is far better than spending the same money on rent and not making it your house. 

3. Attractive schemes 

Other than lower home loan rates, lenders have also come up with attractive schemes like paying off EMIs late. It is also possible to pay only interest on the utilized amount as the EMI and remaining at the end of the tenor. Also, it is possible to save big on repayments under home loan tax benefits. Thus, a home loan has different benefits than just giving you the key to your dream home. 

If you want to apply for housing finance, you can use the home loan eligibility calculator and know an amount you can apply for.

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Check Your Home Loan Eligibility with Home Loan Eligibility Calculator

Do you wish to avail of a home loan and have no idea about the exact eligible amount? 

If yes, you don’t have to worry! It is because you can calculate your precise eligible amount using the home loan eligibility calculator. 

Read on and explore more!

What is a home loan eligibility calculator?

The home loan eligibility calculator is an online tool that helps you know your actual eligible housing loan amount. 

This way, you can be confident and search for a property in the eligible amount range and avoid loan rejections. 

How to use the home loan eligibility calculator?

Using the home loan eligibility calculator is handy if you follow a few easy steps: 

1. Open the home loan eligibility calculator from your lender’s home loan page/calculators’ section. 

2. On the tool, enter your date of birth and city of residence. 

3. You also need to choose your monthly income, other sources of income, the loan tenor and existing obligations/EMIs being paid. 

4. Once done, you need to click on the ‘Check Your Eligibility’ button. 

5. After you do that, the home loan eligibility calculator will showcase your actual housing loan amount that a lender will approve. 

A robust CIBIL score, consistent employment, and income record will help you have increased home loan eligibility. 

If you wish to know about an exact home loan EMI amount, you can use the home loan EMI calculator. This tool is also available for free on a lender’s website. 

Once you enter your desired loan amount, the tenor and the interest rate, the tool will show your home loan EMI. 

You can also know about your home loan interest charges, along with the total loan cost (principal + tenor). 

Before applying for housing finance, you should be sure of an eligible amount and the home loan EMI figure. This way, you can approach it with confidence.     

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Get The Latest Updates On PMAY Scheme and PMAY List 2021

The Pradhan Mantri Awas Yojana (PMAY) is the housing scheme of the Central Government of India. The PMAY scheme was launched in 2015 by PM Narendra Modi. 

The PMAY was launched as a housing scheme to provide affordable homes to the poor population of the country in rural and urban areas. 

With a tagline of ‘Housing for All by 2022’, it intends to build affordable houses using sustainable technologies. 

Besides this, if you have PMAY eligibility, you can get an interest subsidy on home loan interest up to 6.5% and Rs.2.67 lakh. 

Based on your income groups, you can avail of an interest subsidy. If you have already applied for PMAY, you can check your name in the PMAY list 2021. 

Let’s know how to check your name included in the PMAY scheme in this post!

Here’s how to check your name in the PMAY list 2021 

1) Land on the official website of PMAY at www.pmaymis.gov.in. 

2) Hit the ‘Select Beneficiary’ option and choose ‘Search by Name.’ You can do that from the drop-down menu. 

3) Feed your correct 12-digit Aadhaar number. 

4) If your Aadhaar number is available in the PMAY database, you will be able to find your beneficiary details. 

What are the achievements of PMAY?

The Pradhan Mantri Awas Yojana – Gramin (PMAY-G) has managed to achieve 92% of its completion in its first phase.

1.5 crore+ homes in rural areas have been built during 5 years of the PMAY – G scheme. 

Under the PMAY – U, more than 41 lakh homes are completed, and 70 lakh+ houses are in different stages of construction. More than 1.68 lakh home constructions are already approved under PMAY – U and counting. 

If you want to apply for the PMAY plan and avail of an interest subsidy on housing finance, you can do that online after checking the eligibility norms. 

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Avail Your Dream Home with Lowest Home Loan Interest Rate in 2021

Your dream home in 2021 maybe just a home loan application away! 

A home loan facility helps you get a large amount as per your eligibility. 

Since a housing loan is secured, it comes at a lower rate. But repaying over a longer tenor may increase your interest charges.  

If you wish to avail yourself of the lowest home loan interest charges, this short post will help you know more! Read on!

1. Go for a shorter tenor 

Opting for a smaller tenor means that you have to pay the higher home loan EMIs. But it will also help you to repay reduced home loan interest charges. 

2. Make prepayments 

During the tenor, you can also make some prepayments to bring down the outstanding amount. Once done, the home loan interest charges will also reduce. It will help you to repay lower home loan EMIs. 

3. Shop around 

You should compare all available home loan offers of lenders. You should choose the best one matching your needs and repayment budget. The facility could be availed on a third-party website for free. 

4. Pay more as the down payment 

A lender will not sanction the entire cost of your new home as a loan. You have to manage 15-20% on your own. It is known as the down payment. The higher you pay; the lower will be your borrowable amount. In turn, you have to manage lower home loan rates and EMIs. You can always use the home loan EMI calculator and know an amount you will pay over a tenor. It will ensure that you can indulge in proper financial planning.     

5. Opt for a home loan balance transfer 

Existing borrowers looking to reduce their home loan interest outgo can switch their loans to a lender offering a reduced rate. It is known as the home loan balance transfer. You can also enjoy a top up loan with a significant amount, restrictions free usage, reduced interest and tenor like your ongoing loan. 

You can consider one of the tips and lower down your payable home loan interest charges and save.

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