Tuesday 21 May 2019

Home financing options for NRI buyers



May, 2019
Besides regulations for the type of properties that NRIs can purchase in India, legal provisions also exist on the mode through which these purchases can be financed When a non-resident Indian (NRI) opts to purchase a property in India, there are several regulations that govern how such a purchase can be financed.

Homes in Kasarwadavali Thane

Credit : freepik.com

Sources, for financing a real estate investment in India, for NRIs

The money for purchasing a property in India, has to come through banking channels only. Consequently, the payment cannot be tendered in the form of traveller’s cheque or foreign currency. An NRI can also use the money in his/her credit, in non-resident external (NRE) rupee or non-resident ordinary (NRO) or foreign currency non-resident (FCNR) account, maintained in India. NRIs are allowed to purchase property in India, by availing home loans in Indian rupees, from banks or housing finance companies. The home loan can also be granted by the Indian employer of the NRI employee, for the purpose of financing of the property.

How can NRIs obtain a home loan

As NRI investment in Indian real estate is only allowed in residential or commercial properties, banks too, can finance only these properties. Almost all banks offer home loans to NRIs for buying a house or constructing one. One can also get a loan, for purchase of land (non-agricultural), for constructing a house in India. The application for the home loan can be made online, as well as offline. The nature of documents that need to be submitted, will depend on whether the NRI is a salaried employee or whether s/he is self-employed. It will also vary, depending on the NRI’s country of residence. Nevertheless, copies of one’s passport and visa, passport-sized photographs and proof of residence in the foreign county, will be required in all cases. Depending on whether the NRI is salaried or self-employed, s/he also has to fulfil a minimum period of stay in the country of present residence, to avail of the home loan. Banks may also insist on an acceptable co-applicant, or an NRI guarantor. The NRI guarantor too, has to submit documents pertaining to identity proof, address proof and income proof.

How can NRIs service the home loan

EMIs on the home loan can be paid through remittances from outside India, through a proper banking channel, or by debiting the NRE, or NRO, or FCNR account. In case the property is let-out, the rental yields can be used for servicing the NRI home loan. Money transferred to the NRO account from close relatives, can also be used for servicing the home loans. In case the property is purchased for self-occupancy, the NRI can avail of a loan against the FCNR or NRE account deposits, of up to Rs 1 crore, for servicing the home loan.

Remittances out of India

An NRI is allowed to repatriate some of the funds, in case the property so acquired is sold. However, the number of properties (whether purchased or inherited), for which s/he can remit or send money to India, is restricted to two. Moreover, the amount that can be repatriated, cannot exceed the amount (denominated in foreign currency) received as remittances from outside India, either for purchase or servicing of the NRI home loan. Under normal circumstances, an NRI is allowed to remit an amount of USD 1 million in a year, out of India, from his NRE, NRO, or FCNR accounts, which includes the amount remitted for sale of a house.






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Thursday 16 May 2019

Use your travel collectibles to create an interesting home décor




May, 2019
From maps to suitcases, we look at how home owners can use mundane items associated with travelling, to spruce up their home décor and create a personalised space.

A person’s home is a reflection of his or her lifestyle. If one is a seasoned traveller, there is no better way to showcase your collectibles, maps, souvenirs, postcards and photos, than through your home décor. Home owners often ponder and search the internet, to find unique themes that would give a personal touch and extraordinary look to their homes. A travel-themed décor, can be a perfect amalgamation of both and hence, is quite a trend in current times.

Home Decor ideas for your 1 BHK in Ghodbunder Road Thane

Credit : freepik.com

Here are a few tips for travel-inspired décor that will jog your memory and take you back to your holidays:

1. Flaunt your maps

When you return from a vacation, do not throw the maps. Instead, convert these paper maps into personalised art. You can hang up a huge wall-size map and add photos of the destinations that you visited, on the relevant location on the map.

2. Foreign coins and currencies as art

Similarly, if you come home with lots of coins and bills from your travel destination, do not let them collect dust in a drawer. Instead, make them into an interesting art that no one else will have. You can create a shadow box frame, by combining maps, coins and currencies. Alternatively, turn your foreign coins into magnets and they would look unique on refrigerators. Prepare a creative travel collage with leftover foreign currencies, tickets, etc., from your travel.

3. Display your collectibles

Whether you collected blue plates from the Netherlands or Hungarian blue embroidery, show off your treasured collected items in a corner of your drawing room. For example, use your vintage suitcases as a placing unit, which will also serve as storage units for your home. Fill a jar with shells and sand that you collected from various beaches you took a walk on and place it at your work desk.

4. Paint a wall with a theme based on your favourite destination

Go all out and paint your walls, with a theme based on the destination that you have the best memories of. For example, show your love for nature and colour your wall with Mediterranean blues. You can also draw inspiration for Indian art or culture or French and Italian designs, or use south-eastern or American influences, to create your own wall art depicting your love for travel and adventure.

5. Use photographs as display objects

Decorating a space with pictures, is a simple way of personalising a room and making the space feel like home. The way in which you display these photos, also offers a whole set of décor possibilities. You can just hang your Polaroid photos with strings on the wall or frame them in different sizes. You can also customise a simple picture frame and make it an interesting display of several pictures. A well-curated wall art can turn a blank space into something that is both, visually striking and also serve as a talking point for guests.
An avid traveller will always long to visit new and exciting destinations. So, the next time you book your tickets for a soothing holiday, collect badges, coins, shells or anything from your visits, remember that you can use it to bring your traveller personality into your home’s décor.



Source - housing.com

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Thursday 9 May 2019

What is an LTV ratio and how does it determine home loan eligibility?


May, 2019
The loan-to-value (LTV) ratio is based on the size of home loan sought and determines the maximum amount that can be sanctioned to a property buyer. We explain how this is calculated.

Loan-to-value (LTV) is a ratio of the amount of loan that can be given to the total value of the property. The LTV can range from 75 per cent to even 90 percent of the property value and also depends on the borrower’s relationship with the lender and the scheme availed. A higher LTV implies a greater loan amount and therefore, lesser down-payment that you need to arrange out of your pocket. However, it also means a higher EMI. A lower LTV means that you have to arrange for a larger sum to be paid as down-payment.

Home loan on buying 2 BHK flats in ghodbunder road Thane

Credit : freepik.com

LTV slabs and ceiling

The LTV ceiling depends on the quantum of loan sought and is divided into slabs. “The RBI has allowed up to 90 per cent LTV, if the loan is up to Rs 30 lakhs. The LTV for loans between Rs 30 lakhs and Rs 75 lakhs, is 80 per cent. For loans higher than Rs 75 lakhs, you can get a maximum LTV of 75 per cent. The age of the applicant, credit score and the total liabilities of the applicant, also affect the LTV they are eligible for,” explains Adhil Shetty, CEO, BankBazaar.com. A higher LTV also means that you will end up repaying a larger amount to the lender, through EMIs. If you have sufficient funds for the down payment, then, it would be best to opt for a smaller loan, as it would be less stressful to repay. You can also use excess funds that you may have, to close your loan earlier.

How much LTV should one look for?

When it comes to a property purchase, buyers generally tend to first look at their own finances and then bridge the shortfall through a home loan.

Kalpesh Dave, head – corporate planning and strategy, Aspire Home Finance Corporation Ltd (AHFCL) explains how much LTV would be ideal for a person, with the help of an example: “Let us assume that a home buyer is looking for a loan amount of Rs 25 lakhs, to purchase a property worth Rs 40 lakhs. He approaches two financial institutions, namely ‘A’ and ‘B’ for the loan amount. From the initial interactions, he gathers that ‘A’ would offer a loan of Rs 25 lakhs at an interest rate of nine per cent for a tenure of 20 years and ‘B’ would offer a loan of Rs 20 lakhs an interest rate of 8.5 per cent for the same tenure. In this case, even though the rate of interest offered by ‘B’ is lower, the buyer may prefer the home loan from ‘A’ as it would meet his funding requirements. Opting for lender ‘B’, would mean that he would still have to arrange for Rs 5 lakhs from other sources and bring uncertainty into an overall purchase transaction.”

Experts suggest that if you do not have enough savings to afford a huge down payment, it would be better to opt for a higher LTV. No matter what you decide, compare all your options carefully, before taking a decision. Calculate exactly how much you would need to pay back in either situation and do a cost-benefit analysis.

Factors that determine home loan eligibility

Income:

Higher your income, greater the amount of money banks would be willing to lend to you.

Age:

Your eligibility for a loan is connected to your age. Most banks usually have 60 years as the cut-off period to close a loan. So, if you take a loan at the age of 45, you will have only 15 years to repay the loan. Consequently, your loan eligibility will be higher at an early age, as you have a longer period to repay the loan.

Credit history:

If you have a good credit history and score, the lender would be willing to give you a better LTV.

Total liabilities:

Lenders calculate the ratio of your total current debt to your total current income, before giving a fresh loan. If you are currently repaying too many loans, the amount of home loan you will be sanctioned will be lower.


Source - housing.com

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