How much you will save, with RBI Slashing its benchmark repo rate by 50 basics point?

Dated : 29-Sep-2015 

RBI slashed its benchmark repo rate by 50 basis points (0.5 percent) to 6.75 percent. This came after a total of 75 basis point cut earlier this year in three tranches as inflation pressures eased in the economy. 

Check out RBI's trend

 






Questions which arise for the existing customer... 

Will this reduction be passed to existing home loan customers ? 
Hopefully the banks and lending institutions will pass on the benefits to there existing customers. If not full at-least partial in some wave form.

Already, the country's largest state ­run lender, State Bank of India , has cut its base rate by 40 basis points, or 0.4 percent, to 9.3 percent, effective October 5, Chairperson Arundhati Bhattacharya told CNBC­TV18. 

In an interview, Bhattacharya said that there could be further rate cuts in the future by banks, given that the RBI Governor Raghuram Rajan has indicated that the door for future rate cuts is open. 

SBI also has cut its deposit rates by 25 basis points across maturities, effective next Monday, the bank chief said, adding that it would help bring down cost of funds for the lender.

If  banks/lending institutions doesn't pass on this benefit to existing customer,  is there a way to avail it. If so how ?
Yes, existing loan lenders can avail the benefit in following ways 

1.  The old home loaners have the choice to convert their existing rates to current rates by paying hefty penalty charge of minimum of 0.56% on left over principle to the banks/lending institution. Its advised to compare the benefits of paying part-payment over penalty.  Check out LOANYANTRA.com part-payment calculator.
2. The old home loaners have one more choice of switching to new bank or lending institution. Check out LOANYANTRA.com Switch & Save option and get rewards and benefits from LOANYANTRA.com

How much does it save tenure ?
Definitely, there will be a change in the tenure when you go for a lesser interest rate. Infact, 0.5% change in interest rate will result in closing your loan to a maximum of  30 months earlier. 
For example, if you have a loan of 50 lakhs for a tenure of 20 years with 10% interest, a change to 9.50% interest will change your tenure to 18 years and 2 months. 

How much does it save my EMI ?
If you want to keep your tenure same, your EMI reduces from Rs. 48,251 to Rs. 46,606. This leaves you with a saving of Rs. 1645. 

Competition in home loan space has been quite intense not only from banks, private banks, nationalised banks but also from the NBFC space. SBI has again proved that it stands on the top among its rivals. Infact, with the immediate reduction in the interest rate and implementation, it makes way to the competition.

Reduction in the interest rate is always advantageous. 
For new loans and hassle-free balance transfers, logon to www.LOANYANTRA.com. 

Calculate your EMI with the help of our EMI calculator...


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Co-applicant for a Home Loan - Who can be a Co-applicant ? Advantage & Disadvantages of being a Co-applicant.

In the present day, when the cost of living is going up and usually both spouses work, having co-applicant becomes more of a necessity than a requirement. There is no legal requirement to have a co-applicant.


In order to enhance the loan eligibility, a borrower has an option to resort to by having a co-applicant. This way, the total eligible income for the purpose of computing the housing loan increases, thereby resulting in higher loan eligibility.

Home loan co-applicant is a person who shares the equal responsibility towards the repayment of the home loan. Such type of home loans are called Joint home loans. Whereas a co-owner is the person who has a share in the property and rights on the property too. A co-owner of a property can be the co-applicant in home loan. But it is not necessary that the co-applicant of the home loan is the co-owner of the property.

Who can be a co-applicant 

A bank does not permit friends or relatives who are not blood relatives to take a loan jointly. Only if the co-applicant receives income from a regular source will that income be considered for determining the loan eligibility.

In most cases, spouse is the most common and preferred combination.


In case of parents and children , these rules will apply:

• Father/ Mother and son

If the applicant is the only son, he can jointly apply with his father with both the incomes being considered. The property should be in their names jointly and it does not matter who the main owner is. This is because in any case the son is the legal heir of the father's property.

• Father/ Mother and sons

In case a person has two or more sons and if he wants to apply jointly with one of them, he should not be the main owner of the property. This is because, on his death, his children should inherit the property jointly and may cause an inheritance dispute.
The father may only be taken as co-applicant and his income may be considered for the loan. He may be a co-owner or not own the property at all. Under no condition should he be the main owner of the property.

• Unmarried daughter and Father/ Mother

An unmarried daughter can apply jointly with their father. However, the property should only be in the name of the daughter and the income of the father should not be considered . This is to avoid any legal complications on the subsequent marriage of the applicant .
Where applicant is the owner and has a son and a daughter, an affidavit may be obtained from the daughter that she has no claim on the property.

In case of Brother and brother/sister 

Home loan co-applicant approval is subject to certain terms and conditions like address of both should be same which means a joint family and intent to stay together in joint family in future. It is at the sole discretion of the bank.

Who cannot be a co-applicant :

• Father / Mother and Married Daughter 
• Brother and Sister 
• Sister and Sister

Documents Needed : Documents are needed from both the applicant and co-applicant. 

General home loan documents needed are :

1. Identity proof
2. Address proof
3. Salary slips
4. Bank statements

Loan Eligibility

A common doubt is - 'Will the home loan eligibility amount increase if we opt for a joint home loan?'  Yes, it will. Banks will be ready to offer you higher loan amounts if you opt for a joint home loan. The reason for it is that your repayment capacity increases as there are now two people who repay this loan. How much it would increase depends on the income of co-applicant. Apart from income, organization reputation is also considered. Be sure that you compare multiple loan offers before deciding on loan eligibility.


Benefits of being a Home Loan Applicant 

• Increase Home Loan Eligibility :

If you are not the co-owner of property but would like to help your spouse or relative to increase their Home Loan eligibility. In this case, you may consider being home loan co-applicant. It is absolutely necessary that you should be aware of all the risks and legal liabilities.

• Taxation Benefits :

From a taxation point of view, a joint home loan is also beneficial as all co-borrowers can claim tax deductions under section 24 (upto Rs. 1.5 lakh) of the Income Tax Act against interest paid and under Section 80C (up to Rs. 1 lakh ) against principal repaid. 

The tax benefits that can be claimed would be in proportion of the share that the individuals have in the loan.


Dis-advantages of being a Co-applicant 

• CIBIL score of the co-applicant will be impacted.
• Reduced credit eligibility : Being a co-applicant will reduce the credit eligibility to the extent of 50% of home loan value. It may impact approval of any future credit requirement of co-applicant.
• Operational Hassle : It is an operational nightmare  for home loan co-applicant at the time of availing or closing the home loan.

Repayment Options 

The repayment process for joint home loan is similar to that of a regular home loan. The payment, however, has to be made through one cheque. 

Renu Sud Karnad, manging director, HDFC, explains, "Payments can be from a single or joint account by way of cheques or Electronic Clearing System (ECS)." 

"Another way of repayment could be that the co-borrowers share the number of EMIs between them such that a specific number of cheques can be issued by one borrower and the balance by the other,"  says Suvrat Saigal of Barclays Corporate India.

What if Dispute Arises

The problem arises when one of the co-borrowers refuses to repay the loan. Be warned that  each party would be liable for part of repayment or up to as much as all of the repayments.

Renu Sud Karnad of HDFC says, "It does not matter whether the payment is made in the normal course by only one of the joint borrowers as long as the full EMI is paid as per schedule".

In the event of default, the lender will proceed with the normal recovery process  which may include a legal recourse against all joint borrowers.






Solution 

• Agreement between all Home Loan Applicants  - 

To avoid any legal dispute in future, it is advisable to all home loan applicants to sign a separate legal liability agreement on a stamp paper. And get the paper notarized. This agreement will clearly segregate the liability of each party. 

• Online Term insurance Plan - 

What if bank insists on a co-applicant. If the bank insists only to hedge risk against home loan repayment, then a simple solution is that the primary borrower can buy an online term insurance plan and can submit a copy of a that policy assuring bank that bank that he is insured against home loan.

Conclusion

Joint home loans are definitely beneficial as compared to normal home loans. In case you are looking for a home loan and you can speak to your blood relatives to get a joint home loan, be sure that the EMIs are paid as per schedule.

World Tourism Day - 27 September

Holidays can be a wonderful chance to get to know new places and people. As well as learning about a location's geography, history, literature and language, visiting a new place can help break down stereotypes and misconceptions. Tourism can also benefit the communities being visited; many areas rely on tourism as their main industry. A massive 231 million people are employed in the tourist business, and recently there has been a dramatic increase in the number of holidays taken, with more people going away more often. 

What is World Tourism Day 

Since 1980, the United Nations World Tourism Organization has celebrated World Tourism Day on September 27. The purpose of this day is to raise awareness on the role of tourism within the international community and to demonstrate how it affects social, cultural, political and economic values worldwide.

Each year has a particular theme. With more than a billion tourists now travelling the world each year, the theme, "1 Billion Tourists, 1 Billion Opportunities", for 2015 explores the potential of tourism for socio-economic development. The UNWTO has developed a global code of ethics for  tourism,  "to help minimise the negative impacts of tourism on the environment and on cultural heritage while maximising the benefits for residents of tourism destinations".  It includes sections on 'The Responsible Tourist', 'Trips for travellers' and 'Sustainable development'.

Why teach about tourism?

Tourism is a global phenomenon and is a great entry point into looking at other issues such as trade, climate change, sustainable development, workers' rights and human rights. It naturally fits into the Geography and Modern Foreign Languages curricula, and can be used as a starting point for work in other subjects such as looking at statistics in Maths or sustainable technologies in Design & Technology.

Teaching about tourism raises pupils' perceptions of the impact they can have on holiday, and can influence their choice of behaviour both while on vacation and towards tourists in their home.

Suggested WTD Activities 

The possibilities are endless to promote the theme. See below for just a few suggestions of how you can get involved.

Spread the word

The WTD website is full of resources you can use to spread the word .

The message of the UNWTO Secretary-General can be freely used in conference materials, brochures, documentaries etc.

You can feel free to upload the logo on your website. You could also use the logo to make your own WTD-themed materials, such as t-shirts, stickers, posters etc.

Hold an event 

WTD is a celebration. So concerts, festivals, shows and parades are a great way to take part.

Launch a competition

A competition – essays, paintings, videos – on tourism and sustainable energy is a fun and simple way to get involved in World Tourism Day.

Take a trip

What better way to celebrate WTD than enjoying being a tourist yourself? Whether it’s around the world or within your own country, with your family or your classmates.

On previous WTDs, a number of destinations and sites have offered free entry or special discounts to the public, so look out for special offers!

World Tourism Day Celebrations in India

People can visit Taj Mahal and nearly 200 other ticketed monuments and museums across the country for free on September 27 that coincides with the World Tourism Day. 

Apart from 116 ticketed monuments which include World Heritage Sites like Taj Mahal, Agra Fort, Vitthala Temple Hampi, Western Group of Monuments of Khajuraho and Buddhist Monuments at Sanchi, entry will also be free for 35 site museums and all other museums under the administrative control of the culture ministry, such as the National Museum and the Salar Jung Museum. 

Other ticketed monuments which will not carry any entry fee on September 27 include Golconda Fort, Charminar, Hydrabad Fort, site of Mauryan Palace, Kumrahar, Patna, Shershah Suri's Tomb at Sasaram, excavated site of Vikramshila, Antichak, excavated Site of Nalanda, and ancient remains at Vaishali. 

Note : Check World wide  home loan interest rates  in http://goo.gl/lyDQn3.

Real Estate Today- Housing Sector ; Investor Vs End user

Real Estate in India 

The real estate sector is one of the most globally recognized sectors. In India, it is the second largest employer after agriculture and is slated to grow at 30 per cent over the next decade.The Indian real estate market is expected to touch US$ 180 billion by 2020. The housing sector alone contributes 5-6 per cent to the country's Gross Domestic Product (GDP).

Mumbai is the best city in India for commercial real estate investment, with returns of 12-19 per cent likely in the next five years, followed by Bengaluru and Delhi-National Capital Region (NCR).

Real Estate Analysis in India 2015

Recently, RBI Governor Raghuram Rajan said that the industry must bring prices down to attract buyers. "If real estate developers bring down prices, it will be a big help to the sector. Once there is a sense that the prices have stabilised more people will be willing to buy."  While prices are likely to stay stable at one end, affordability could improve too
Investors and end users are  in a wait and watch mode following news reports of a massive unsold inventory in the system. Buyers are postponing their decisions, leading to a huge supply overhang. 

Thus leading to a terrible slow down in realty industry and leaving the investors in property also in the same heat. While stated prices remain elevated, transaction prices have already fallen by 10-15%. Discounts have increased significantly in the secondary market.

This does not mean that real estate prices will come down by 30-40%. A 30-40% crash can happen only when the economy goes into a recession. Our economy is doing well now, the GDP is growing at a good pace, inflation is down and foreigners are investing in both manufacturing and e-com businesses, 

But it means there will be a slow rise, in real terms. In major markets like the National Capital Region, property prices have risen 1% in the past one year. Due to the oversupply, the prices are expected to remain flat or register a marginal growth in the next 12 months.

When the crop is in abundance, and there isn’t a high demand, is when you should make a big bid. Anecdotal evidence of realism dawning in realty transactions is good news for buyers. 

What buyers can do / Investors Vs End users 

Delhi-NCR

NCR suffered due to inventory overhang. Lack of sales and stagnant prices kept investors away. Prices are not expected to fall further in near future. However, launches from builders and secondary market transactions are still happening at rates below the brochure and asking price. Investors should stay away till stability returns.

Mumbai 

While the affordable segment of the residential market is expected to remain flat, the luxury segment is facing pricing pressure. Anything priced above Rs 4-5 crore is finding few takers. Investors should stay away because the situation may remain like this or may even worsen. Since we are already in a buyers' market, the end users should use the current opportunities to get maximum discount from the sellers.

Chennai 

The real estate market in Chennai is heading for a revival due to the political stability there. It is the affordable segment that is generating customer demand while the mid and luxury segments are getting only lukewarm response. Though the investors can stay away for the time being because the expected return is below the cost of funds, end users should not delay their home purchases. 

Kolkata 

Experts don't see chances of a recovery in the near future. Though there is some traction in the affordable segment, the high-end segment continues to be a reel boon for end users. Since no price appreciation is expected in the immediate future, investors should stay away for the time being. 

Hyderabad 

After falling out of the favour thanks to the Telangana movement related strife, Hyderabad realty is slowly coming back to the limelight again. Cost of housing is very low in Hyderabad and it also has very good trained manpower. So business will be happy to move in so long as there is no disruption and power related issues. Though the investors can stay away for the time being because the expected return is below the cost of funds, end users should not delay their home purchases. 

Bengaluru 

Bengaluru has emerged from the shadows of Mumbai and Delhi with the highest number of launches. "With 31% of overall India launches in April-June, Bengaluru has left NCR (25%) behind for the first time in recent history," says Anuj Puri, Chairman & Country Head, JLL India. Though it still doesn't make sense to buy as an investment as the expected return is below the cost of funds, end users should not delay their purchases. 

Ahmedabad 

It has not been able to attract companies from the IT, FMCG and finance sectors, necessary for driving up prices in a big way. The automobile sector, which was leaning towards Gujarat, has also begun deserting it for Pune in Maharashtra. With not much migration happening to the city, investment in homes here may not fetch good returns in the immediate future. End-home buyers, however, should use this opportunity to strike better bargains. 

Pune 

"Pune is the only city that has shown double digit price appreciation in the last two years," says Ashutosh Limaye, Head of Research & Real Estate Intelligence Services, JLL India. Though the investors can stay away for the time being as the expected return is below the cost of funds, end users should not delay their home purchases. 

Experts Advice :

Since the trend is clearly down, there is no need for investors to jump in right now. There is enough and more ready stock in the market on the block, both in primary and secondary deals. Stick with primary and secondary first sales (sale by first owner) to be safe. You would be surprised by the bargains you can get. Experts advise end-users to utilise this opportunity to buy their dream house. Infact, softening in prices is an excellent opportunity for end-users to purchase a property. 

World wide Home loan interest rates.

World wide Home loan interest rates:

As on Sep-2015

India's economy with a population of 1.26 billion (Est 2010) ranks 4th in the world with a GDP PPP of 3.5 trillion and GDP PPP per capita of 3,015 vs 45,934 (United States) according to the IMF in 2009. India inflation was 8.3% in 2008 and 10.9% in 2009 . Approximately ~6.80 in 2015.


Home loan interest rates around the world in 44 countries. 

Country	Inflation	GDP	Population	Interest Rate	Currency
Hong Kong	5%	45,277*	7,234,800	2.15%	HKD
Singapore	4.60%	50,180	5,469,700	2.50%	SGD
Switzerland	0.40%	40,484	8,183,800	2.62%	CHF
Norway	1.90%	53,471	5,156,450	2.75%	NOK
Germany	2.20%	34,388	80,767,000	3.28%	EUR
Canada	2.80%	37,947	35,540,419	3.30%	CAD
Sweden	2.50%	35,951	9,728,498	3.55%	SEK
Chile	3.30%	15,002	17,819,054	3.70% - 4.90%	CLP
Netherlands	2.30%	39,877	16,876,800	3.90%	EUR
Slovakia	3.90%	7,325	5,415,949	4.04%	EUR
Taiwan	1.60%	31,776	23,410,280	4.047% ~ 6.797%	TWD
Poland	4%	18,837*	38,496,000	4.05%	PLN
Slovenia		27,900	2,064,647	4.10%	EUR
Austria	3.30%	39,634	8,527,230	4.30%	EUR
Qatar	2.80%	78,260	2,187,326	4.35%	QAR
Ireland	2.40%	38,685	4,609,600	4.40%	EUR
China	5.40%	6,778	1,367,900,000	4.50%	RMB
United States	1.50%	45,934	319,094,000	4.88%	USD
Panama	5.90%	14,097	3,713,312	4.95%	USD
United Kingdom	2%	34,388	64,105,654	4.99%	GBP
Bulgaria	4.20%	13,789	7,245,677	5.80%	BGN
Fiji	8.60%	4,366	859,178	6.15%	FJD
Vietnam	18.90%	2,942	89,708,900	6.49%	VND
Greece	2.90%	29,663	10,992,589	6.55%	EUR
Australia	3.40%	38,663	23,665,600	6.70%	AUD
New Zealand	4.50%	26,670	4,541,340	8.55%	NZD
Bahamas	1.80%	31,324	368,390	9.00% - 10.5%	BSD
Nepal	8.30%	1,200	27,646,053	9.00% - 10.50%	NPR
Bosnia		8,127	3,791,622	9.37%	BAM
Jamaica	9.40%	9,029	2,717,991	9.50%	JMD
South Africa	5%	10,229	54,002,000	9.50%	ZAR
Solomon Islands		3,345	581,344	9.95%	SBD
India	6.80%	3,275	1,262,530,000	9.70% - 11.5%	INR
Georgia	-0.50%	6,145	4,490,500	10.25%	GEL
Malaysia	3.30%	13,800	30,401,400	10.50%	MYR
Philippines	5.30%	3,546	100,553,900	10.50%	PHP
Indonesia	5.70%	4,151	252,164,800	11.00%	IDR
Maldives		9,173	341,848	11.00%	MVR
Sri Lanka	7.70%	5,220	20,277,597	12.75%	LKR
Thailand	4.10%	8,051	64,871,000	12.87%	THB
Bangladesh	10.70%	1,565	157,322,000	13.50%	BDT
Russia	8.90%	14,913	146,149,200	14.50%	RUB
Turkey	7.80%	13,905	76,667,864	16.08%	TRY
Zimbabwe	8.30%	559	13,061,239	18.50%	USD
Ukraine	9%	6,665*	42,977,367	22.30%	UAH