Good Season to Become a Home Owner

Property prices are expected to come down. It is a widely acknowledged open secret that the real estate sector runs on illegal wealth and therefore, cash transactions are necessary. Buyers are often asked to pay a price (higher than the fixed circle rate or its usual MRP). Buyers agree to make the desired part-cash payment, as they also save on stamp duty while registering the property. With the current situation, buyers will now end up paying a fair price.

With RBI expected to cut the repo rate and banks also expected to cut the deposit rates, it is likely that banks will extend this levy on loans as well. If you have taken a loan on floating rate basis, then expect your EMIs to come down.

Procuring a home loan means having your papers in order. Put your IT returns in order (for at least 3 years). Watch out for banks that are offering home loans at cheaper rates. No charges are levied on refinancing your home loan or balance of transfer of home loans.

Smart tip: you are entitled to a tax re-bate on your earned income from rent. Your tax rebate will be calculated on total annual interest (paid by you for home loans) and your annual income amount (earned from renting the same property). The principal amount paid by you as EMI is non-taxable under section 80c. The interest you pay (on loan) is also non-taxable under section 24 of the IT act.

Car loans

The flexible EMI option is a step closer to letting you drive home a luxury sedan. There are EMI options available on certified used cars sold by branded dealers. You no longer require spending hard cash to buy a car. A car purchase using credit card has a levy of 2-3% and only limited dealers accept credit card payments. The fall-back option then is car loans.

Initially, banks were apprehensive of sanctioning loans for used cars, the prime reason being limited information about the condition of the vehicle. To-day, leading banks have partnered with branded dealers for pre-owned cars. There is a warranty for your purchase, best prices, and easy availability of financing that option.

Smart tip: Easy access to loans is now guaranteed for used-cars. For example, HDFC bank offers loans on the basis of your credit card statement instead of asking for an income proof.

(Advertiser-Sponsored Feature: A Marketing Initiative)

About The Author

Open