Properties, Homes & more

We have seen one of the worst recessions of the century for real estate industry. The prices sank to all-time lows, with returns dipping below investments. However,post mid-2009, the property market has regained momentum - not only in India, but also around the world. Almost every metro across the world has witnessed a surge in property sale / lease. Especially, Mumbai, Hong Kong, Singapore, London, and New York. When it comes to London, I can dream of fantastic palatical bungalows situated in some of the most beautiful premises one could imagine. But getting a property in London is equally difficult. The most important criteria for property, especially in Central London, are: Money, Money, and Money.

London property, be it residential or commercial, does not come cheap. And where there is huge money involved, fraud automatically follows. One should be utmost careful while buying / selling / leasing real estate in metros, especially like London. Hence you should always take assistance from expert agencies / brokers - The London Property Buyers (TLPB) is one of these who will provide genuine advice and assistance is all kinds of dealings in real estate in and around London. Promoted by Laurence Moore, this family business is one of the proud members of National Landlords Association of the UK, which in itself is a proof of ethical business practices! TLPB buys directly from individual sellers for cash, so that there is only one entity throughout the deal. No middle men, no hidden charges, no fees… only complete satisfaction and value for money. TLPB can not only assist buyers/sellers in repossession of real estate, but can also offer expert help in various allied areas  like Stop Repossession, Probate & Inheritance, Relocation, Debt Management, and Personal emergencies.

The process of TLPB is simple. As a first step, TLPB will offer you expert advice on appropriate properties for you depending on your requirements. After the detailed discussions, and only after you’re satisfied with the real estate offered to you, the deal - cash for homes - is cracked. And the final step is that you get 100% peace of mind since there is no fishy business out here with TLPB. By choosing TLPB, one can be assured of utmost professionalism, transparent business practices, speed and flexibility, and peace of mind for everyone. If this is not enough a kick for you, you should call TLPB directly at +44.0800.879.9889 and experience the pleasant change! The rule of thumb is: If you want to buy/lease/sell property quickly, turn to TLPB.

Ramakant lives in a 3 BHK flat in a posh Thane apartment. He had purchased the property around 1.5 years ago for Rs 60 lakhs. Today, the cost of the apartment is almost 1.5 times original price. With an (2 times) increase in his pay package, Ramakant is sure he can save some additional money every month. He is contemplating on buying a second house. Is this a wise decision?

Discussion…

Correction phase

In today’s times, the realty sector can be best described as in a correction phase. Ideally, this is the best time to invest in property.

Easy home loans

A few years ago, procuring a home loan was quite difficult with lot of administrative hassles, government hurdles (or red-tape), and high interest rates. People could buy their own homes only towards the end of their careers when they had saved enough (PF) money. Things have changed considerably over these years. If you are a salaried individual of today - employed with a large, reputed firm - and have no history of previous loan defaults, getting a home loan is absolutely simple for you.

Nowadays, the lender decides on your housing loan eligibility after considering factors like age, income, educational qualification, repayment track record and credit history. Interest rates have dropped down to single digits. You can, in fact, shop around for the bank that offers you the best deal!

Tax benefits

If you have acquired a second home, the principal paid on both the home loans, will be eligible for deduction under Section 80C, subject to the overall cap of Rs 1 lakh. The entire interest repaid can be deducted from your taxable income for the second house. Only one of your properties can be shown as self-occupied. In case of the second property, actual or notional rental income has to reflect as additional income earned. You can deduct 30 percent from this rental income towards maintenance charges. Municipal taxes can also be deducted from rental income.

Rental income

The rental income that a second property can fetch is a major factor that many buyers take into consideration. This rental income can help pay off a large portion of the EMIs. If the property is closer to the heart of the city, the rental income could be higher.

Conclusion

Considering all above parameters, it seems to be a wise decision for Ramakant to buy a second house, provided he can assure himself a decent cash flow after purchasing the second home.

Banks say NO to uniform home loan rate cut

The contentious issue of “uniform home loan rates for old & new customers” cropped up when CEOs of large banks recently met senior RBI officials to suggest possible measures that the central bank could consider for the January 29 monetary policy. At the meeting, RBI deputy governor KC Chakrabarty reprimanded bank chiefs over their inability to pass on the benefit of lower interest rates uniformly to all customers - including old customers. It should be remembered that this has been a common practice among lenders that while they are slow to pass on a rate cut, they are quick to hike either the loan term or the EMI when rates go up.

Bankers argued that since the incremental cost of fund had softened, they could charge lower rates only to new customers while old customers had to pay more as old funds were raised at a higher cost. Countering this, RBI said that reduction in incremental cost of funds also brings down the average cost of fund for a bank which should then be in a position to offer the new, lower lending rate to old as well as new borrowers. Some banks even said that offering the same rate to all customers could spark legal feuds since interest spreads (over or below the PLR) varied from customer to customer, each of whom sign separate loan contracts with banks.

Cheaper home loans to old customers not feasible: IBA

Amid a debate over teaser rates, bankers have turned down the RBI’s suggestion to extend the cheaper home loans to existing customers saying that the move will impact their bottom lines. The IBA said if banks offer lower rates to old customers as well, this will affect their earnings as it is not feasible for them to change their deposit rates accordingly to compensate this loss of interest arising from such a move.

Banks will not withdraw prepayment penalty on forclosure

Competition Commission of India (CCI), the apex body that operates to sustain and promote competition, recently sent notices to atleast 15 banks, NBFCs and IBA seeking explanation on why they penalise borrowers who choose to foreclose loans. Many of these institutions have already replied to CCI, to make it clear that the removal of prepayment penalty will result in higher lending risk and may cause asset-liability mismatch in banks.

I have recently came across an informative post from Mohsin about Affordable Housing in and around Pune. Mohsin talks mainly about the following major areas of Pune which offer budget housing to all:

Kothrud: It is one of the fastest growing suburbs of Pune located in the south west of the city. With the rapid developments, this area has become one of the fastest growing residential localities of Pune. This place is inhabited by lots of students as many educational institutions like MIT and Cummins College of Engineering for Women are located in this area.

Aundh: Aundh is the last part of the “core city”, before going outwards towards Hinjewadi IT park. After development of Hinjewadi in last 10 years, Aundh has grown its importance and is considered to be heart of the city, especially for people working in IT sector. Availability of malls, hospitals and schools make it very attractive, but slightly expensive option.

Balawari: Balwari became known to everyone because of the stadium built for national games in 1994. After development of the Katraj bypass going to Mumbai, and Hinjewadi IT park, the entire region got a boost in terms of property prices and general economic development.

Kondhwa: It is amongst one of the oldest colonies of Pune city and lies in the south eastern part of the city. Kondhwa has the National Institute of Banking and Management (NIBM). Wanowrie area, under Kondhwa, houses huge Army medical set-ups like the Armed Forces Medical College (AFMC) and the Command Hospital and the Artificial Limb Center.

Pashan and Baner: Baner and Pashan both saw a tremendous boost in development in last few years, because of ease of commute towards city center as well as Hinjewadi IT park. Pashan’s growth in terms of new development is slightly restricted because of presence of large number govt. organizations and the resulting lack of land availability.

Kharadi: On the East side of the city, Kalyani nagar first saw a quick growth of IT and resulted into expansion of city horizons on Nagar road. Kharadi bypass, connecting the Nagar road to Hadapsar, saw real estate rates shoting up from measly 1000 Rs to around 3000 Rs. per sqft. We think there is a lot of growth potential in this region and investment can still be worthwhile.

Katraj: Another fast growing suburb of Pune is Katraj that is located in the southern part of the city. Katraj is quite well known for the campus of Bharti Vidyapeeth University, the Katraj Milk Dairy and the Katraj Snake Park. The New Katraj Tunnel here is a highway tunnel located on the NH4. The place is located at 10.2 Km from the Pune railway station.

Kotak Mahindra Bank joins rate war, offers 8.49% fixed rate for home loans. After banking biggies - SBI, ICICI and HDFC - it is now the turn of Kotak to announce its special home-loan scheme, offering an 8.49% fixed interest for first 30-months.

The special offer can be availed for all new loans irrespective of the loan amount, but will be limited till January 31, 2010, the bank said in a press release. The private sector lender will charge floating rates (prevailing at that time) on these loans after the 30-month period, which will be decided based on the retail prime lending rate, the bank said. While the fixed duration loan rate will remain the same irrespective of the loan amount, the floating rate will vary with the loan amount, the bank said.