RBI Guidelines for Home Loans 2020

To help the lodging area, the Reserve Bank of India has chosen to defend hazard weightage on lodging credits and make the item alluring for the two borrowers just as moneylenders. 

With the presentation of the Real Estate Regulation Act (RERA), the interest is relied upon to go up as purchasers would be protected against deceitful manufacturers and specialists. We are set to see another time in the Real Estate area which would be more coordinated and controlled than previously. 

In this article, we will examine the pivotal rules that each borrower should know: 

Advance to Value Ratio: 

To make home Loans more reasonable for purchasers, RBI has raised the credit to esteem (LTV) proportion. An LTV alludes to the level of the measure of an advance you will get against the complete estimation of the property you need to purchase. To put it plainly, it is the level of the property cost, the monetary establishment will back while the rest should be financed by the purchaser. 

Subsequently, for each credit given, monetary establishments must put aside a level of the advance to look after dissolvability. The rate was before chosen by two factors: the size of the advance and the advance to-esteem (LTV) proportion. Right now, RBI has raised the LTV to 90% for home advances underneath Rs.30 lakhs. This implies that moneylenders may finance over 90% of your home valuation. Then again, credits over Rs 75 lakh have an LTV proportion of over 75%. Thusly, more the estimation of property and credit sum, lesser is the Loan to Value rate. 

RBI further expresses that the stamp obligation, enlistment expenses and other documentation charges ought not to be incorporated while computing LTV. This brings down the instalment of 10% that should be paid forthright by the borrower. 

Prepayment Charges 

Credits are costly on the grounds that they have an interest factor, which is the sum charged by the monetary establishment for expanding the advance. The absolute interest sum is very generous as the advance has a residency of 25 years. 

Prepayment implies paying the credit sum before it is expected. It tends to be incomplete or full contingent upon how much the borrower can pay. The aftereffect of prepayment is that the head on which interest is determined gets decreased fundamentally, subsequently prompting reserve funds on interest cost. 

The RBI has commanded zero prepayment charges over all banks and NBFCs if there should be an occurrence of coasting revenue home advances. To support borrowers, Reserve Bank Of India has wiped out the prepayment charges to take care of the credit if there should be an occurrence of an expansion in the pay. This will permit the borrowers to diminish their EMI and advance residency, which is gainful. Borrowers have invited this rule as it empowers borrowers with coasting financing cost advances to secure themselves by making a prepayment. 

Equilibrium Transfer and Foreclosure 

Considering these rules, RBI has additionally set measures for home credit takeovers, so you renegotiate the home advance at low-loan fees and a residency that suits you. RBI has additionally postponed dispossession charges, further adding the focal points that you can cause. 

You would now be able to benefit balance move wherein a borrower closes old advance with troublesome terms and conditions and changes to another credit on the unpaid part. 

Home Loan Insurance 

Home advance protection is a fundamental item that guarantees that the credit payer doesn't get into the monetary stagger because of death or inadequacy of home advance payer. By and large, home advances are long and can last as long as 25 years. During this period, an unsure circumstance happens which weakens the borrower to pay the EMIs and subsequently making it difficult to meet the instalments any longer. This is the place where home credit protection acts as the hero. 

The RBI rules for home advance protection likewise specify that purchasing protection from their banks isn't necessary for home credit borrowers. No rules of RBI expresses that bringing home credit protection is required. Now and then selling a particular home credit protection is only a method for making powerful commissions. So the borrower must be cognizant and settle on a choice. 

In the current testing times, home purchasers have remained monetarily focused. Subsequently, this declaration will assist homebuyers with settling on a home advance with no concerns. 

In this way, every borrower ought to know about these significant rules from the RBI that administers home advances. On the off chance that you are searching for another home advance or an equilibrium move to change to a superior home credit, at that point does contact us at 1800 258 2225. You can likewise utilize the Shubham Housing Finance qualification adding machine to evaluate your qualification prior to applying for credit.

Apply for a Home Loan During The Pandemic

As everyone got affected by the nationwide lockdown wherein and a lot of people, faced a financial crisis. Many businesses have badly impacted during the Corona Pandemic, and people either lost their job or had to face a pay cut. To ease the financial strain, many banks and housing finance companies such as Aadhaar housing Finance, Shubham Housing Finance are offering loans to help people in financial stress.

Also, the Covid-19 crisis has created a rift between landlords and tenants where, unfortunately, many tenants were asked to vacate their house. This has prompted people to consider buying their own home and look for easy and quick home loan options.

But the question is – Is this the right time to apply for a home loan?

It is a good time for those who are planning to own a house as the government has introduced several benefits to boost affordable housing. 

Here let us look at the reasons why this is the ideal time to avail a home loan: 

#To boost the demand for housing amidst the pandemic, the Secretary for Housing and Urban Affairs, has given stamp duty concession. The concession in stamp duty will benefit the homebuyers to buy a home of their own. Also, it would be applicable to the registration of documents by 3 per cent from 1st September to 31st December 2020.

#The government has extended the Credit-Linked Subsidy Scheme (CLSS) for Middle Income Group (MIG) under the Pradhan Mantri Awas Yojna (PMAY) until March 2021. Under the scheme, middle-income homebuyers with an annual income of Rs 6-18 lakhs can avail the benefit of subsidized interest on their home loans.

With an online facility, you can now easily avail a home loan without a guarantor. At Shubham Housing Finance, the process of loan application is quite simple; you can enjoy a higher loan amount with Shubham Housing Finance and repay it over the flexible tenure. 

To calculate your monthly instalments, you can take the help of an EMI calculator. But before applying for a loan, you need to consult with a trustworthy financial institution like Shubham Housing Finance to meet all your financial needs.

With the above-mentioned reasons, it surely seems to be an ideal time to buy a new property. If you need any assistance in applying for a home loan, or if you have doubts, you can reach out to us, or you can write your queries in the comment section below. 

Smart Tips To Reduce Your Home Loan Burden

With the rise in the real estate prices, it is difficult for most of the Indian to buy a house on one's savings. However, availing a home loan is the only option for most to achieve this goal. The large-ticket size and long tenure contribute to higher EMI, leaving little space for other financial purposes. Besides, any upward home loan interest rates or EMI can deteriorate your finances.

Here are some of the ways how a new borrower or an existing borrower can reduce the home loan burden:

1. Compare interest rates online

In today's world, one of the best ways to check home loan interest rates is to go online. You can check for the various websites to get a summarised view of interest rates, fees, and other charges included by various lenders. Therefore, it is essential to do proper research before availing a home loan to ensure you get the best deal.

There are also few banks and housing finance companies that provide the best interest rates. Shubham Housing Finance is one of them, which offers home loans to customers at a competitive interest rate. Based on the distinctive requirements of the customers, Shubham offers tailored home loan solutions to all.

2. Opt for longer repayment tenure of your loan

Before opting a home loan one should calculate the tenure and corresponding charges accessible to you. Therefore, it is recommended to choose the longer tenure because the longer the tenure, the lower will be the EMI payable every month. So you should choose the home loan tenure carefully as this impacts the amount of EMI you will be required to pay every month.

At Shubham Housing Finance, you can get a clear understanding of the amount that you need to pay towards your EMI. They also help their customers make an informed decision about the monthly outflow towards the home loan.

3. Make a bigger down payment

A down payment is the upfront payment the borrower makes to the financial institution. In India, lenders can provide 80% of the property value as a home loan, while the borrower has to arrange the rest 20%.

Thus, if you contribute a higher amount as a down payment, the lower will be your Loan to Value ratio, which in turn enhances the loan eligibility and also increases the chances of loan approval quickly. But remember while trying to make a higher down payment, don't overstretch your finances as it may hinder the achievement of other important goals.

4. Make home loan prepayment

If you have disposable cash, then you can use the amount to prepay 5 - 10% as the principal amount. As prepaying a minimum percentage of your loan would significantly reduce the total loan outstanding, thereby lower your EMI payments. You can request the lender not to lessen the repayment tenure but instead reduce your EMI amount.

Banks generally charge a prepayment penalty fee, but with Shubham Housing Finance you don't have to pay any hidden charges.

We believe, now you have a proper understanding of reducing the burden of your home loan. If you still have any doubts, you can always write to us. We have got your back!

How Much Home Loan Can I Get on My Salary?

Buying a house is considered a significant achievement, especially in Indian culture.

However, for the majority of the population, the aspiration of buying a house can only be achieved late in their lives after they have accumulated sufficient savings. This is where availing a home loan can catapult oneself to achieve their homeownership's wish.

But most of the time, the question that pops into our mind is how much loan can I get on my salary?

Because, lenders generally offer you the loan amount depends on criteria like monthly income, age, location, existing obligations, etc. This article will explain to you what part of the salary is taken into account and what are the factors influencing eligibility criteria and how to get a home loan quickly.

How Do Lenders Evaluate Your Monthly Salary?

At Shubham, we generally consider in-hand salary to determine the home loan amount. They consider the net monthly income by deducing monetary incentives from your in-hand salary such as

-Basic salary

-Medical allowance

-Leave travel allowance (LTA)

-House rent allowance (HRA)

-Other allowances, etc.

However, this is not the final amount taken by the employee; there are some compulsory deductions from the gross total such as Employee Provident Fund (EPF), Tax Deduction, and Professional Tax, etc. After this, what remains is known as the in-hand or net salary of an employee. This net salary is taken into account while calculating your home loan eligibility.

Once your net monthly income is gathered, lenders then demand the following documents as proof of income:

• Payslips of last six months
  
• Bank statements
  
• Form 16 of the past two years
  
• Certificate indicating TDS
  
• PAN card for identity proof
  
• Details of an existing loan, if any
  

If your monthly salary evaluation goes well, your home loan application can quickly receive approval from the lender.

Use a home loan calculator before applying for a home loan

A home loan calculator equates your monthly EMI payments using three factors – loan amount, tenure, and home loan interest rates.

If your net monthly salary is ₹40,000, you can get a home loan up to approximately ₹24 lakh. Likewise, if you earn ₹35,000 per month, you can get up to ₹21 lakh. Existing loan EMIs and obligations can lower the actual loan-to-value. Hence, foreclosing any existing loan or paying off credit card debts is an ideal way to increase your home loan eligibility.

However, a higher-income will fetch you a higher home loan. Suppose, if more than one member is earning in a household, the net monthly income of earning members can be combined to arrive at a higher home loan eligibility amount.

Conclusion: 

Keeping all these factors in mind, you can ensure the desired loan amount. It is recommended to use Shubham's Home Loan Eligibility Calculator before applying for a Home Loan. At Shubham Housing Finance, we look at your potential to repay the future loan and based on that we provide you with the loan.  

Let us know about any questions you have in the comment section below, also, you can reach out to us at 1800 258 2225.

Don't Just Consider the Interest Rates When Taking a Home Loan, Ask Yourself These Five Questions?

Interest rates on home loans have been falling ever since the lockdown. Customers can now avail home loans at much lower rates.

While interest rates are one of the critical factors borrowers look at when choosing a lender, it's essential to consider some other aspects too.

Banks offering cheaper rates can provide loans to borrowers with a high credit score. In such cases, borrowers need to look at Housing Finance Companies or NBFCs to get a better offer and faster processing of a loan.

Now that home loans are available at delectably low rates, the house you decided to purchase might be well within reach. You may not be wrong in deciding to buy it, but in a hurry, don't take on a responsibility that you are not prepared for.

Ask yourself these five questions before you borrow a loan:

1. Which one would you choose first: home or home loan?

Sometimes, it is true that in eagerness to buy a house; you finalize the deal with a broker only to find that the bank has refused to authorize your loan. What if the seller wants the payment within a specific time frame and you don't have the money? What if you are not able to provide the EMI or the down payment the financial sector demands.

Thus, it is essential to find out all the details about the loan from the lender, conduct due diligence, the loan amount, the processing fee, the other charges that the financial company levies. It will help you to calculate the exact amount you need at hand and the loan amount that you can avail of.

Also, there are various housing finance companies such as Shubham Housing Finance, Aadhaar Housing finance, where you can avail a loan with zero credit score.

2. Do you have a secure job?

The interest rates may be low, but is your job safe and secure? In these uncertain times, you need to be sure that your business or company is financially stable and your earnings are secure. So make sure that you will be able to pay the EMI in the long run before taking a large ticket loan.

3. Did you skip a loan during the lockdown?

Have you suffered a pay cut or lost your work due to the pandemic in the past six months? Or, maybe, you have refused to pay your credit card amount. All these changes will affect your credit score and the amount of home loan you can avail of.

However, with Shubham Housing Finance, you don't have to be worried about your credit score as Shubham Housing Finance doesn't look at your credit score. They offer you a loan based on your income and repayment capability.

4. Do you have funds for a down payment?

The Reserve Bank of India has directed banks and NBFCs to accept a maximum of 80% of the value of the property as a home loan.

Suppose, if you buy a house worth Rs 80 lakh, you will have to pay Rs 16 lakh as a down payment to the bank or housing finance company.

If you had been saving for the down payment and experienced significant losses during the pandemic. In that case, it is advisable to place the purchase on hold until you have accrued the sum needed instead of taking a larger loan. The larger the loan, the more significant the portion of the interest you repay, even though the rates are low.

5. Are you purchasing a house for investment?

If you buy a house for self-occupation and have ample funds for a down payment and EMIs, due to the low-interest rates. In such cases, this could be the perfect time to make a purchase. However, the cause of buying a house as an investment should not be a low rate of interest.

With Shubham Housing Development Finance Company, you can avail with minimum documentation and zero credit score. If you have any queries, you can write your thoughts in the comment section below.

How to Reduce Home Loan EMI with the PMAY?

The biggest for most Indians is to own a house. As owning a house is a matter of pride for some, while to others gives financial security and mental peace. Thus the Government of India has launched a housing scheme known as Pradhan Mantri Awas Yojana (PMAY) to bring affordable homes for the low-income groups.

The scheme is mainly for the economically weaker sections (EWS) of the society, low middle-income group (LIG), and middle-income group (MIG) individuals, and the subsidy available is termed as "Credit- Linked Subsidy Scheme."

The Government of India takes into account the whole family’s income while deciding the subsidy to which an applicant is entitled. Moreover, the subsidy rate provided to applicants is often calculated according to the economic category of which they are a part of.

Now, you must be thinking about whether you are eligible?

How can you avail this subsidy?

How should an individual apply for the scheme?

If yes, here is all that you need to know about the scheme and how you can reduce Home Loan EMI with the PMAY.

Eligibility Criteria: 

The first thing you should check is the eligibility criteria. All home loans sanctioned should be eligible for availing the interest subsidy.

-People who fall in the annual income between 3 lakhs to 6 lakhs are eligible to avail the subsidy of 6.50%

-Individuals with a yearly income of 12 lakhs and 18 lakhs can avail a subsidy of 3% to 4% on their interest rates.

-To avail this scheme, families with a husband, wife, and unmarried children are eligible. It involves constructing a new house, or obtaining a newly built home, or even repurchasing an existing home. Even young unmarried men and women may apply for this PMAY CLSS subsidy.

Interest & EMI of the home loans under the PMAY

If you're applying for an interest subsidy under PMAY, your lender has to submit the application to the National Housing Bank.

-The maximum tenure of the housing loans under the PMAY scheme is 20 years.

-Once you are eligible for the subsidy, then the National Housing Bank will pay the entire subsidy in one go to your lender. This further reduces your EMI burden.

More Preferences Are Given To Women

As per the PMAY scheme, women are given more preference than men. Single, working women, widows, differently-abled women, transgender, and people belonging to scheduled castes and tribes are given first preference.

How to apply for a home loan under this scheme:

Borrowers should express their desire to avail the subsidy. The lenders then get an agreement signed from the customer, ensuring that this is only home under their name. To avail this subsidy, To make use of this subsidy, no additional processing fee is charged.

The borrower may then either choose for reduced EMIs or, repay the loan easily with the existing EMI.

To increase the implementation of this subsidy, several housing financial banks such as Shubham Housing Finance, Aadhaar Housing Finance, and non-banking financial institutions have been chosen as primary lending institutions.

Hope this article is helpful for you. If you have any doubts, you can reach us at any time. We are here to help you!

3 Important Points of Obtaining Loan Against Property without ITR

A loan against property is a loan that is taken against the residential or commercial property by pledging your property as collateral. The lender assesses the property's market value before sanctioning the loan.

But the major requirement is that the lender will ask for income proof even though you offer collateral as income is an important parameter for deciding the amount of loan that can be sanctioned to the borrower.

Presumably, you might be thinking about how to apply for a loan against property without income proof.

Well, there are few housing finance companies such as Shubham Housing Finance, Aadhaar Housing Finance, where you can apply for a loan against property without showing your income tax returns.

With Shubham Housing finance, the process is easy and simple. All you need to provide is Identity proof, address proof, bank passbook, and property papers. With attractive interest rates, you can enjoy hassle-free repayment.

Here are some of the tips that you need to know about availing a loan against property without providing income tax returns (ITR).

#1 Apply for a loan with a co-applicant

It is all right if you do not have an ITR to show. You can add a family member who earns an income such as father, mother, sister, or brother as a co-applicant when applying for a loan against property. This is the easiest way to get a LAP without income tax returns. If you are already unemployed or there is a cash crunch, including a salaried co-applicant will increase the chances of getting a loan and reduce the burden of repayment of the loan.

#2 Justify the reasons for not having income proof

Discuss with the lender or the bank manager, if you have not filed for an income tax return. Reassure them that you will make your repayments on time. The loan officer will consider the prior income and calculate your repayment capacity.

#3 Explain your income source to the lender

The lending institution will send in some officials when you apply for Loan Against Property to inspect the property against which you are taking the loan. At this point, it is very important to explain to the lender your income details so that they remain informed throughout the tenure.

We all know that it a difficult task to get a loan against property without income proof. But with Shubham Housing Finance, you won't face any challenges as they offer loans, especially to those who earn cash income.

So, don't worry if you don't have any income proof, Shubham Housing Finance has got your back and is there to help people without formal income proofs.

Do share your thoughts and concerns in the comment section below and we will try to provide suggestions or help resolve all your loan related problems.