8 things to keep in mind while taking a home loan

With the prices of houses skyrocketing, it's common to seek home loan from banks and financial institutions. Due to the falling interest rates, home loans are now available cheaper. The process of online applications has made approvals and disbursals fast. However, you get an approval for a home loan only after banks go through your credit history and check your borrowing potential.

If you are planning to take a home loan, here are a few things you must keep in mind:
(1)

Legality of the property

Before you lay your hands on a property, make sure the builder is reputed and all papers of the property are in place. With RERA implemented across regions, you can check the builder's profile online on the RERA website. Banks often refuse to give loans if the builder is not in its approval list.

(2)

Down payment

You must have a budget chalked out before you start looking for a house. Calculate the down payment you would have to pay. It is usually about 20% of the value of the property. You can choose to pay more from your pocket if you can afford.

You must save up for the down payment. In case, there is a deficit, you have take soft loan from your employer, family and friends. Try to minimise the borrowing amount to reduce the interest outgo.

Check your eligibility criteria

Home loan lenders have a list of eligibility criterion and only if you happen to meet those, you are considered a potential borrower. Banks typically look at your credit history to understand your repayment habits and prefer a credit score of 750 for lending out. Your age, income, occupation, collateral security, margin requirements, etc are also important factors when it comes to determining the interest on the loan.

Check the fees and charges associated with the loan

Home loans come with associated fees and charges. Processing fee is the most common fee payable at the time of application. Check if the fee is reasonable when you choose a lender.

Check the interest rate

The interest rate on loans is a determining factor in deciding where to take your loan from. Lower the rate, lower would be the EMI outgo. Home loans are offered at fixed interest rates and floating interest rates. While fixed interest rates remain the same through the loan duration, floating rates change with bank's changing lending practices. Weigh your options before you zero in on a loan.

Check your affordability of paying EMIs

Customers often take up a lot of burden when it comes to paying EMI thinking that it would get easier with time, as their income would increase eventually. Consider the possibilities of not getting a raise soon or other unforeseen circumstances. You should look at a loan to income ratio of 20% to 30%. You can make changes in the tenure to reduce or increase the EMI amount depending on your affordability

Buy an insurance plan to cover the loan amount

Once you have taken a loan, the outstanding balance liability falls on your family's shoulders in your absence. You can avoid this financial burden on your family by buying a mortgage redemption insurance cover while taking home loan. It is a decreasing term plan where the cover amount decreases as you repay the loan.

Shop around

There are hundreds of banks and financial institutions which offer home loans at attractive interest rates. Before buying a home loan, go online and compare the interest rates and charge structure of all available home loans. Comparing would let you choose a loan which not only has the most reasonable interest rate but also limited fees and charges

http://realty.economictimes.indiatimes.com/slide-shows/8-things-to-keep-in-mind-while-taking-a-home-loan/59970677

Demonetisation: IT department surveys real estate firms in Delhi-NCR

NEW DELHI: The Income Tax department today surveyed some real estate players in the National Capital Region (NCR) to check reports of alleged profiteering and tax evasion by these entities while converting the recently demonetised currency notes.

Officials said the department conducted the exercise on at least four such entities in the Delhi-NCR region and visited over half-a-dozen premises.

They said the tax sleuths made an inventory of cash and sale documents at these locations and checked sale documents.

Officials added the department also scanned some records of some previous sales made and have asked the officials of these firms to produce the records at a later stage.

When contacted, real estate firm Amprapali Group called the I-T operation a routine exercise
"A team of tax officials have visited our office premises and they are inspecting the company books and accounts. It is a routine exercise done by them," Amrapali executive director Shivpriya told PTI.

Asked whether the survey was linked to the illegal usage of demonetised Rs 500 and Rs 1,000, Shivpriya said: "We sell affordable homes which are largely funded by customer home loans.
Another group and real estate brokerage firm called it a "normal" operation.

"They (tax officials) came to check if we are accepting cash or not. We are doing legal business. We deal in primary market where there is no cash," Investors Clinic Infratech Private Limited Founder and CEO Honey Katiyal said.

Under the survey action, the tax sleuths visit business premises of the trader/operator and make analysis of the available stock and record it, whereas under search operations both residential and business premises are visited by the taxman.

The department, since last week, had detected unexplained cash and sales worth Rs 100 crore in a similar crackdown by traders, jewellers and other operators while converting demonetised currency notes.

7 builders on Yamuna Expressway set to lose housing land over dues

GREATER NOIDA: Days after the Greater Noida Authority cancelled a group housing plot in the city, the Yamuna Expressway Industrial development Authority (YEIDA) on Friday initiated the process of cancellation of seven allotments in its area. The developers in question, which include five group housing builders, and two institutional ones, owe the Authority nearly Rs 525 crore.

According to YEIDA officials, the process of cancellation of the seven allotments has started. “We have started issuing show-cause notices to the developers as they have not fulfilled their commitments in keeping with the rescheduled payment plan policy offered to them last year,” said Arunvir Singh, chief executive officer (CEO), YEIDA.

The show-cause notices are being issued to 3C Homes Pvt Ltd in sector 22A, 3C Residency Pvt Ltd in Sector 18, HC Infrcity Pvt Ltd in Sector 22D, Sukriti Infrcon in Sector 22D, Sunwhite Infratech in Sector 18, Tyag Buildspace in Sector 17A and MMA Grains in Sector 17A.

“These defaulters were to pay 15% of their pending amount by September 2016. Despite repeated reminders, they have failed to pay up. Hence we have been left with no choice but to issue them a show-cause notice and start plot allotment cancellation procedure thereafter,” he told TOI.

“After initiating the amnesty scheme, we have received about 25 applications from builders opting for the rescheduled payment plan. According to the plan, property owners had to pay 15% of their outstanding dues besides paying the rest in instalments. They also had to pay 15% of the additional compensation amount of 64.7%, which has to be distributed to farmers,” said Amarnath Upadhyay, additional CEO, YEIDA.

Officials said that after land is allotted to developers, registration done and building plans sanctioned, the construction has to be launched within a year. In the case of the seven developers, no construction has been carried out. “These builders had applied for amnesty or rescheduled payment plans but have failed to deposit their first instalment,” Singh said.

“Since we do not want third party rights to be created, we will issue the show-cause notices asking why the plots should not be cancelled. If we do not receive a reply within 15 days, we will go ahead and cancel the allotment,” he warned.

http://realty.economictimes.indiatimes.com/news/regulatory/7-builders-on-yamuna-expressway-set-to-lose-housing-land-over-dues/57459400?photo_id=55875242

Developers liable for building's safety now in the new code

NEW DELHI: Builders can be made liable for the safety of the structure, as per the new national building code proposed by the Centre to be followed by the states.

The revised code was unveiled by Consumer Affairs Minister Ram Vilas Paswan here on Wednesday. The code has been prepared by the Bureau of Indian Standards (BIS) under the aegis of the Consumer Affairs Ministry.

The code is voluntary in nature but the states can incorporate them in their building bylaws.

"The code contains provisions on use of new/innovative materials and technologies and on prefabricated construction techniques that can give fillip to speedier construction to meet the objectives of Housing for All by 2022," Paswan said after releasing the code on the occasion of the World Consumer Rights Day here.

"It is a voluminous code with 34 chapters. It is used by local bodies for framing building bylaws. It is used by government departments in construction activity. It is used by private builders as well as professionals like architect, planners and engineers. It is also used for academic purpose," BIS Director (Civil Engineering) Sanjay Pant told PTI.

Asked about key changes made to the building code, Pant said planners, structure designers and supervisors were made responsible for the safety of the structure while geo-technical engineers and builders were not included.

"Now, builders are also made responsible safety of the construction. Builders have to give a certificate saying that the building has been constructed as per the planned design submitted to the local bodies," he said.

Apart from making builders liable, the revised code has made necessary changes keeping in view the requirement of modern buildings.

For example, the code specifies fire and life safety norms for high rise buildings and a proper horizontal evacuation system in high-rise hospitals and public buildings.

It also provides for universal accessibility for senior citizens and differently abled citizens besides encouraging use new building material and alternative smart technologies.

The salient features of the revised code are norms for solar energy utilisation, inclusion of modern lighting technique including LED, updated provision on piped gas supply in houses and hospitals, solid waste management and rain water harvesting, besides high speed lifts for tall buildings.

For ease of doing business, the revised code has a detailed provision for streamlining the approval process in respect of different agencies in the form of an integrated approval process through single window approach thereby avoiding separate clearances from various authorities.

http://realty.economictimes.indiatimes.com/news/regulatory/developers-liable-for-buildings-safety-now-in-the-new-code/57661434

YOGI SEEKS REPORT IN RS 500-CRORE AGRA LAND SCAM

AGRA: Chief minister Yogi Adityanath has sought a report about an alleged Rs 500 crore land scam in Agra, after it came to light that a private real estate firm was given undue advantage at the cost of the state exchequer.

According to activist Kunwar Shailraj Singh who blew the whistle on the scam and sent documented proof to the CM's office, “Officials of UP Housing and Development Board (UPHDB) gave undue favours to a real estate firm. After releasing a public notice in June 2016 for the auction of 1,44,869 sq mt of land in sector 12 D and 15 of Sikandra residential area, the officials signed an agreement with the real estate firm without even conducting the auction. Besides, the land worth over Rs 500 crore was sold to them for a pittance of Rs 160 crore.”

The activist also alleged that the officials did not charge the firm a single penny for a chunk of 7,390 sq mt, which was part of the total auctioned land and whose value was Rs 8.47 crore.

According to government records, UPHDB sold the land to the real estate firm at the rate of Rs 11,466.56 per sq mt against the existing circle rate of Rs 35,000 per sq mt, according to which the total value of land is Rs 507 crore, including the stamp duty.

An official of UPHDB, who did not want to be named, said, “The matter has come to our knowledge and a probe will soon be initiated to find the level of corruption in the land auction.”

The whistle-blower, in the meanwhile, has alleged that the partners of the real estate firm which is developing two housing societies on the land have started selling land to plot buyers even though they have just paid Rs 30 crore to the housing development board so far.

TOI’s phone calls to the real estate firm and their partners went unanswered while UPHDB authorities declined to comment on the issue.

http://realty.economictimes.indiatimes.com/news/industry/yogi-seeks-report-in-rs-500-crore-agra-land-scam/59045868

DEVLOPERS TTURN TO VALUE HOMES TO BEAT THE SLOWDOWN

BENGALURU| MUMBAI: Realty developers are increasingly focusing on building value home, or affordable housing, to drive sales even as the larger property market continues to reel under the slowdown.

While there has been a major dip in new launches in the mid to luxury segment, the value housing segment posted an increase of 22% to more than 36,300 units last year, a Cushman and Wakefield report said.

“The clarity on affordable housing's definition provided by the government in this year's Union Budget along with the benefits accruing from the infrastructure status to affordable housing projects should bring in a spurt in new launches in the later part of the year, albeit these are most likely to be in suburban and peripheral locations,“ said Anshul Jain, managing director, India, Cushman & Wakefield.

Further, the ticket values of new units being launched may see some changes this year. In majority of the cities, developers have sought to rationalise ticket sizes of value homes to make them further affordable for home buyers. Apart from ticket sizes, lower or discounted prices are prompting home buyers to act as many of them are actually waiting for the same.

“Response to affordable housing has been good, and going forward, with the government's thrust on this segment, demand and sales conclusion will continue to get better, providing the much-needed push to the entire realty sector. A combination of comfortable size and lower prices has helped us in selling over 700 units worth over `. 350 crore in our three launches in 2016,“ said Ashok Chhajer, MD, Arihant Superstructures.

The segment is expected to receive a boost with government looking to waive off the stamp duty and assigning infrastructure status to the segment.

“Exempting stamp duty for affor dable housing will boost the growth of this sector.This will reduce the end cost for the buyer, making affordable housing more at tractive. We look forward to the state government's speedy implementation of this exemption to ensure that the benefit is passed on to the customers,“ said Ashish Puravankara, managing director of Puravankara Projects.

According to JLL India, builders of budget housing now have access to cheaper sources of funds, thanks to the newly-granted infrastructure status. As per statistics, the shortage of housing currently stands at around 1.87 crore homes, and nearly 95% of the shortage is in the affordable segment.

Now, developers can and will focus more on launching projects in this segment, where most of the demand lies.

The end-user is the biggest beneficiary out of this budget. While individuals falling in the lower income slab of up to ` . 5 lakh have been given tax benefits, the massive push to affordable housing also ensures that the dream of owning a home will soon become a reality for many more.

http://realty.economictimes.indiatimes.com/news/residential/developers-turn-to-value-homes-to-beat-the-slowdown/57680940?photo_id=56019216

IMPORTANT LEGAL DOCUMENTS THAT HOME BUYERS SHOULD BE AWARE OF BEFORE BUYING A PROPERTY

Buying real estate property can be an expensive affair and it is next to impossible to buy a house without financial assistance. It is therefore necessary to take precautions and ensure that the hard earned money invested into such property is not only safe but secured to the fullest extent. This highlights the need for a proper due diligence. Also, a purchaser needs to be aware of the following the basic legal documents before purchasing an immovable property

ORINGINAL TITLE DOCUMENTS

The title documents means the flow of title devolution from one owner to another and culminating with the current owner/ seller who is selling the property. In case the original title documents are not with the seller, then there are chances that the title documents are deposited with the banks/ financial institution for the purpose of creation of mortgage and the same also needs to be verified by the purchaser.

SEARCH REPORT

The title search report is usually issued by the search clerk after conducting searches in the offices of the concerned sub-registrar of assurances, to verify the entries on record in relation to the subject property, and by virtue of that, one can trace of the flow/ devolution of title as mentioned aforesaid. Additionally, the search clerk also reports, as to whether there is any Lis Pendens (pending litigation) notice registered with the office of concerned sub-registrar of assurances.

TITLE CERTIFICATE

Title Certificate is issued by an Advocate based on the Title Search Report and the title documents verified by the Advocate in respect of the subject property. The Advocate should ideally also search in the concerned Courts as to whether any litigation is pending in relation to the subject property. Such a certificate should also cover the claims, if any received, in response to the public notice issued in the local newspapers, to be published, one in English and other in the Regional language.

NO DUE CERTIFICATE

No Due Certificate is issued by banks/ financial institution after repayment of the loan and clearance of charge/ mortgage by the banks/ financial institution, so as to rule out any claims by the Banks and to assure that the subject property is free from encumbrance.

SANCTIONED LAYOUT PLANS

It means the layout plans of the structure, which has been duly sanctioned/ approved by the concerned competent authority including the municipal corporation. In case the subject structure is not in terms of the sanctioned layout plans, then it is not advisable to purchase such property, since it is a clear indication of violation of the sanctioned layout plans and applicable laws.

OCCUPATION CERTIFICATE

The occupation certificate is issued by the corporation, certifying that the subject property/ structures constructed upto relevant floors of the building, can be occupied by the purchaser. This indicates that the developer/ erstwhile owner/ seller has constructed the structure in terms of the sanctioned layout plans and has also complied with various other building norms and obligations.

Bills and Receipts

Latest Property Tax bills, Electricity bills, maintenance bills together with the paid receipts should be verified, since the same clarifies about the arrears, if any, in relation to the subject property.

http://realty.economictimes.indiatimes.com/slide-shows/important-legal-documents-that-home-buyers-should-be-aware-of-before-buying-a-property/57674905

RENT RECEIPTS UNDER INCOME TAX LENS

MUMBAI: For as long as anyone can remember, producing fake property rent receipt, often from parents and relatives, has been an easy way to lower tax burden. Such cavalier disregard for tax rule was overlooked by most employers as well as taxman, who possibly felt it was a minor transgression. Perhaps, not anymore.

The income tax department now has good reason to insist on proof from the tax payer showing that he is indeed a genuine tenant, staying in the property in question.

A salaried employee receiving 'house rent allowance' from the employer could escape paying tax on at least 60% of this amount by generating sham rent receipt.

However, according to a recent tribunal ruling, the assessing officer can now demand proof - such as leave and licence agreement, letter to the housing co-operative society informing about the tenancy, electricity bill, water bill etc. - in allowing a lower taxable income as computed by a salaried employee.

Precedent Set by ITAT Mumbai 14

"The ITAT (Income Tax Appellate Tribunal) ruling has now laid down the criteria for the assessing officer to consider the claim of a salaried employee and if necessary question its justification. This will put the onus on the salaried class to follow the rules in availing the tax rebate," said Dilip Lakhani, senior tax advisor, Deloitte Haskins & Sells LLP.

Understandably, none of the required documents are available with salaried employees submitting fake rent receipts. There may not be any actual rent outflow from the person as he may be staying in his family home and collecting a receipt signed by his father. Even if a person is a genuine tenant, the amount mentioned in the receipt may be more than what's paid. This will not pose a problem if the person receiving the rent is outside the tax net. There are several instances where a person may be staying separately but claiming to pay rent to a relative owning another property in the same city; or, one of member of the family claiming a loan repayment deduction while another submitting a false rent receipt to evade tax.

Given the widespread practice of paying tax on only a small slice of HRA, it's is unclear how far tax officials would go in questioning such claims and pinning down salaried employees.

However, ITAT Mumbai's decision to strike down the HRA exemption claim of a salaried individual for rent paid to her mother could set a precedent. "Technology and stricter reporting system may make it easier for the (income tax) department. For instance, there was a time when many never bothered to pay tax on interest earned from bank fixed deposits. Today, it's almost impossible. In case of HRA exemption, the assessing officer may cross-check whether the address mentioned in the ITR form is the same as the property on which rent is paid," said a tax officer.

The Tribunal ruling comes a few months after the government's decision to cap the loss on property bought with borrowed money. Till now, a person paying an interest of, say, Rs 3 lakh on a loan (he took to buy the property) and earning Rs1.2 lakh as rent could show the difference of Rs1.8 lakh as 'loss' and set it off against salary income to pay lower tax. In the last Union budget it was laid down that such losses for an individual tax payer cannot exceed Rs 2 lakh.

OMAXE GRANDWOOD 9999979025

Pages

Property News