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  • Home Loan Diwali Offers

    Banks from all across the nation are providing excellent offers on Home Loan to customers this festive season. With a trend of purchasing a house during Diwali, the banks want to dominate the Home Loan market during the festive season, specifically during Diwali.

    Why is It Beneficial to Avail a Home Loan During Diwali?

    With the decrease in Home Loan rates from all the top banks of the nation, it is said to be a beneficial time to be buying a house via Home Loan. Mentioned below are the reasons why it is a good time to be purchasing a house.

    Lower Interest Rate: The interest rates for Home Loans, as mentioned earlier, have been reduced by most banks in the country this festive season. This will get you a house at considerably low prices.

    Interest Rates Subsidy: The Pradhan Mantri Awas Yojana (PMAY) has given potential home owners a subsidised interest rates. Apart from this, the banks’ subsidised interest rate makes purchasing a house extremely affordable.

    Falling Prices: There has been a decline in the prices of housing in the last two years. As a result, several developers have also lowered the asking rate of housing projects.

    Development in Infrastructure: The rapid development in infrastructure has made it a lot more accessible to metros, airports, etc. Not only does this make a house more habitable, but it also ensures that the price of the house rises in the future.

    Passing on the Benefit of Infrastructure: After the affordable housing scheme, developers have been getting a reasonable deduction in interest rates. The means that their costs have reduced drastically. And, this benefit after being passed on to the customer makes housing that much more affordable.

    Is this Diwali a Good Time to Purchase Property?

    Investment in real estate seldom go wrong. The average overall return from real estate in the long term is estimated to be around 15-25% which is compounded on an annual basis. However, in the last few years the market for real estate has gone down.

    Nevertheless, buying a ready to move in property is going to be profitable in the long run irrespective of the real estate market. Conservatively, real estate prices appreciate at 10% annually, although it has seen increments of 17 – 25% per annum. If compounded for 20 years, the value of a property worth Rs.1 crore will rise substantially to roughly Rs.6.75 crore. Furthermore, if we take rental income into account, then we can conservatively assume a 15% appreciation.

    Is this Diwali a Good Time to Buy Under-Construction Properties?

    Many real estate players offer under-construction properties at discounted prices especially during the festive season. Usually, builders offer a 20% - 25% discount per sq. foot when compared to fully constructed houses. Therefore, your cost of purchasing a house will go down considerably while purchasing an under-construction house. Furthermore, you need not pay the entire amount in the initial stages of the construction. Typically, builders ask you to pay roughly 80% of the whole cost of the property initially and the rest on completion. This gives a buyer some financial freedom and time to shell out the entire amount.

    Another benefit of purchasing a property that is under-construction is the fact that the value of the property appreciates rapidly in the initial stages as the price paid is considerably cheaper as compared to a fully developed house.

    With that being said, there are a few risks involved that one must bear in mind:

    • The construction may take longer than promised. In some cases, the waiting period has exceeded five years.
    • The hefty costs of construction have led builders in the past to abandon projects halfway, leaving investors stuck in between not having a home that they paid for and fighting for the money that they may or may not get back.

    Things to Check Before Buying an Under-Constructed Property

    • Look into the finer details of the contract before purchasing the property.
    • Ask the builder for a commencement certificate. Builders cannot proceed without a commencement certificate.
    • If the project is mortgaged to a bank, don’t hesitate to ask the builder to arrange for a non-objection certificate from the financier of the project.

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