Love Break-up!!! Because of Savings!!! Strange Is It !!

Naveen and Neha are perfect match and an understanding couple. Naveen has a plan for everything in life. Neha is a cheerful and practical woman. Both of them discuss and get things done. So what made their ways apart? I should tell this.

Neha wants to visit a good restaurant and have nice food. Naveen says 'no'.

Neha wants to get away from her daily schedule and go for a vacation. Naveen says 'no'.

Neha's birthday time!!, Naveen got a card for her. She is happy after all he had given her a card atleast. 

Finally, Neha asks Naveen. "We earn well. We can spend though not for a luxurious life but for a relaxing and comfortable life. But why do you always say 'no' for anything that makes me feel happy?"

Naveen  now opens up. He has a dream house and he wants to buy it. 

So what is he doing? Yes. Saving saving saving.

Saving, forgoing the comforts and the feel good factors too??

Yes. He wants to save not just for the down payment of the home, but for the whole value of the property. So how does he save?

Age : 26 years

Salary : Rs.40,000

Expenditure : Rs.15,000

Savings : Rs.25,000

His dream home value ; Rs. 40 lakhs.

On an average per year he saves : Rs. 3 lakhs

No. of years he should save : 14 years.

In the mean time the property's value increases which means he has to save even he reaches his limit. Ofcourse, his salary increases and he can save more. If you observe in the example, he saves more than half of his salary. Without even fulfilling smallest of his desires. When will he explore life if not at the age of 20s and 30s.

So, Neha asks him to go for a home loan. He rejects. She tries to explain.

So, is it that you should not go for saving at all if you buy a home? No, save for the down payment and for the rest go for a home loan.

Let's see how it works.

Age : 26 years

Salary : Rs. 40,000

Expenditure : Rs. 18,000

Savings : Rs. 22,000

His dream home value : Rs. 40 Lakhs

No.of years he saved : 2 years

Amount saved : Rs. 8 lakhs. (used for down payment) 

Home loan amount : Rs. 32 Lakhs

Salary after 2 years : Rs. 60,000

EMI Fixed : Rs. 32,000

Now, at the age of 28 years, he is enjoying in his own dream home. Since, EMI is fixed, he need not think of saving for  a home when his salary increases. He can invest in somehting else, where he gets more returns.

Is that the end? No, you can, rather have to, monitor your loan. This helps you to put an end to your home loan faster.

Experts help will always work. So, seek help to pay your home loan faster.

Ohh!! the love story above!! They didn't breakup :-) Naveen understood Neha's ideas and followed her. They lived happily ever after in their own home. ;-) 

How can you have a break up if you listen to her?  ;-)

Frustrated with Your Home Loan Lender? Here is the Solution.

Answer these questions and think of a solution.

How many of you are frustrated with your home loan lender? Either for a loan disbursal or for a balance transfer or the most important for the higher interest rate changes!!

How many times do you postpone going to a bank for a balance transfer and doesn't go because you didn't research which bank is giving lowest interest rate or which bank charges less on the balance transfer?

How many office hours do you spend to visit the bank on your home loan work?

How many of you didn't research before taking a home loan and now taking the pain?

How many of you dream of closing the home loan fast but don't know how and when?

Do you know, 50% of the people in India use banking portals. Out of which 40% use them for research. 18% of the time is spent on searching for the best banks while on internet.

The one-stop solution for all these is

www.loanyantra.com

Visit the website and fill the details. Get a solution to all these questions. Truly a reliable, economical, one-stop solution.

Is Your Builder Recommending a Home Loan Lender?

I have been checking for a home loan transfer recently. When I bought a house, I did not go around banks to get a home loan. Guess why? Because my builder, at the time of selling, suggested a bank for the home loan and I followed him. Now with the raise in interest rates, when I looked for a balance transfer to another bank, I ended up with no result after going around all the possible banks.So where does the problem lie? Is it with me because I didn't confirm the legality of the required documents or because I blindly followed the builder recommended bank? Or is the builder at fault because he made himself comfortable with the one he was tied up with? Both of us looked for our safe side. That's good. But what happens next is the question. I can look for financial institutions or individual lenders. So for those, like me, who want to get home loan from the banks, it is very much important to research on the banks, on the legality of the property and then decide to buy the property.

It has been found that in many cases, the agents of the banks colluded with the builder to help them to sell their residential units and for this, they keep the prospective home loan buyer in dark about some of the important aspects of the housing project.

So what are the things one should look at while buying a property or I should rather put it as, what are the things a bank looks at while granting a home loan.

1. Legal search report to ascertain the title of the property.
2. Technical search report to know the layout plan and the quality of construction.
3. Land record, occupancy certificate, Title deed, authority or municipality approvals and other similar documents. Note : Please demand these documents from the builder in whose project you are going to invest. After all you are going to invest your hard earned money. you have all the rights to go into the details.

After granting the home loan, the next stage is disbursement. So, if you go with the builder recommended bank, it usually happens that instead of 20% disbursal, the bank might disburse 40%. So again the buyer is at loss. The buyer ends up paying more interest without any reason and necessity. 

In contrary, not all the cases would be the same. The buyer should always keep in mind that in real estate sector there are a very few honest builders. Also one should always check with those home buyers who have earlier bought the flat from your selected property developer. 

What Loanynatra.com does

So, after buying the home with the help of home loan from your preferred bank, what is the next step. Keep watching for the lower interest rates every now and then, find out for the lowest interest rate and that too a suitable home loan for the balance transfer. So it is a cyclic process. Is there any solution that you can keep your hands away from the research and have a sound sleep? Yes. www.loanyantra.com stays with you from the time you decide on buying your new home. It selects a suitable home loan product for you, helps you in knowing the interest rates by giving alerts. Suggests you with the best balance transfer option when needed. So being a loanyantra customer, it saves your time and also saves your money. Use that saved money and time to spend with your family. Plan for a vacation. 

Myths About NBFCs / Banks Vs NBFCs

Why would you prefer going for a home loan only with a bank rather than with an NBFC?

This question was pondering in my mind since the time I had met a cousin of mine. He was really worried to apply for a loan from an NBFC. I think, after the Sharada scam, the RBI is really strict and clear about the rules with regard to NBFCs. Earlier, the minimum net worth for NBFCs was retained at Rs.25 lakh. Now, all NBFCs are to attain a minimum net-owned funds of Rs. 2 Crore by March 2017.

Also you can check the list of NBFCs involved in providing home loan, in the link provided in the official RBI website.

Note : https://rbi.org.in/Scripts/BS_NBFCList.aspx

So, as discussed above, we find NBFCs are also safe to opt. With the emerging economy and population, India needs support financially. Banks could satisfy this need only to a minimum extent and to only a particular group. This made the need for other financial service providers (NBFCs) which are regulated by National Housing Bank.

A coin has both sides. Similarly, banks and NBFCs, have both pros and cons. One should think wise, customize and pick up the best fit. Let us discuss in detail about them.

Who should opt for a bank?

• Apart from the 80% loan amount, if you can meet the  20% down payment amount of the property, the stamp and registration amount. 
• If you have enough time to wait till the sanction of the loan.
• If your property has all the required legal documents.
• If your chosen bank provides a lower interest rate when compared to an NBFC.

Who should opt for an NBFC?

• If you want 80%  loan on home value which includes the stamp and registration charges also.
• If you are running out of time.
• If you are satisfied with the interest rates.

New customer Vs Existing Customer

Neither the banks nor NBFCs offer the same interest rate to the existing customers as they offer the new customers.

Existing customers can convert to the present interest rate by paying a minimal amount. Usually it is 1% of the outstanding loan amount.

Earlier were the days, where you find NBFCs interest rate in double-digit. With the awareness and competition on the shelf, NBFCs are slowly positioning themselves to become viable alternatives to traditional banks for procuring loans.

5 Questions To Ask To Figure Out Whether To Rent Or Buy A Home

A home is one of the biggest financial commitments most of us will ever make - so it's understandable that we might get a little stressed over what seems like a straightforward question:

Should I rent or buy?

To try and ease that anxiety, we spoke with a financial expert and a certified financial planner to get their take on when buying a home is in your best interest.

While there's no universal "right" answer, start your decision process by asking yourself these five questions:

1. Can you afford it?

Having the money for a down payment is only the first step. Next, you need to make sure you can afford to pay your home loan ... and costs like utilities, maintenance, furniture, taxes, and inevitable surprise costs like emergency replacement of the broken boiler.

"Understand what you're getting into," says certified financial planner. "You have to be able to afford to purchase and maintain the property, and expect that your bills will change on a monthly basis."

Plus, she points out, you'll need to be able to pay all of the fees during the buying process. "The best thing you can do is educate yourself," she advises. "If you don't do your research, making the wrong decision to buy could really set you back financially."

Rent if: You don't have the money saved to buy and carry a home.

Buy if: You'll have the cash to cover the initial transaction, plus the ongoing costs of homeownership.

2. Are you financially secure?

To be in a financial position that's secure enough to responsibly to buy a home, you need:

• Decent credit ("You don't need perfect credit or even good credit," he says, "but generally  CIBIL score above 650 you can qualify for a conventional loan.")
• A stable income
• Moderate liabilities
• Enough cash on hand to cover down payment and closing costs
• Liquid assets as financial reserves

When expert says "financial reserves," he's talking about an emergency fund. It's not a good idea to scrounge every paisa from each of your accounts for a down payment, leaving yourself without a safety net for an emergency or hobbling your retirement savings.

"I wouldn't recommend that someone without an emergency fund buy a house," cautions most of the experts. "It really sets you up for trouble when you wipe out your savings to reach this goal and don't have any money set aside."

Rent if: You can't check off one or more of the above bullet points, or if buying would completely wipe out your savings.

Buy if: You're financially secure outside of your home savings.

3. What are your other financial goals?

While buying a home is a major financial accomplishment, it's unlikely that it's the only one you ever intend to make. I remember a client and her husband who were "really gung-ho on buying their first home." But after getting a financial plan and seeing exactly how much money they would need to lay out, they decided to postpone their purchase for another few years in order to finance their other financial goals, like starting a business.

"It's all about breaking it down into steps, and getting clear on the numbers," says experts. "If you have any major life transitions coming up, you may want to hold off and see what happens." How will your home purchase affect your pursuit of your other financial goals?

Rent if: You're currently prioritizing other financial goals above homeownership.

Buy if: Homeownership is your primary financial goal, and you're both aware of and comfortable with how the cost will affect your progress towards your other goals.

4. Are you willing to be the super?

This isn't a financial question, but a lifestyle one: If the sink springs a leak, the yard needs to be mowed, the door handle breaks, who deals with it? It won't be your landlord or super, experts points out, so either you'll need to DIY or find the cash to hire someone.

Rent if: You want someone else to step in when things get complicated around the house.

Buy if: You don't mind dealing with the increased chores that come with being your own landlord.

5. Where do you see yourself in the near future?

Different experts have different estimates, but generally, it's recommended that a home buyer spend at least four to five years in a home to offset the costs of buying.

But aside from the numbers, "buying a home is as much an emotional decision as it is a financial one," says experts. "Of course, you must crunch the numbers to determine whether buying makes financial sense, but it's just as important to feel that you're in a place in your life where buying just makes sense. It's no coincidence that most people seriously start considering buying a home when they get married and are comfortable with the idea of settling down and raising a family."

Rent if: You're unsure where you'll be in the near future.

Buy if: You expect to be in the same place for a few years and want to own your home.

Buying vs. Renting

Should you stop renting and buy a home?

If you’re ready for the commitment, you bet!

Yes. Buying a home is a big decision. A big commitment, too. But if you think it through, clearly understand your financial situation, and you’re ready for the short- and long-term responsibilities, it can be one of the most rewarding decisions you’ll ever make.

Why buying a home is a good idea.

Build equity: 
Every monthly EMI payment you make is part interest and part principal. The principal is what you owe on the loan and it goes directly towards your home’s equity. It’s like investing in yourself. Which is a lot better than 100% of your rent payment going to the landlord. Plus, whenever home values increase (and historically they do) so does the value of your home.

Tax advantages: 
The interest portion of your monthly payment is like any other interest. It’s the fee you pay for borrowing the money. However, the great thing about home loan interest is it’s tax deductible. And so are your property taxes.*

Loan options: 
There are different types of loans to choose from. So depending on your financial situation, and long and short term plans, you can apply for a home loan that will fit your needs.

Live your way: 
Do you feel comfortable in a sparse, minimalistic space design? Or do you like different colored walls and pictures everywhere? As a homeowner, you’re free to live, decorate and change your home however you want.

What the experts say.

Many experts believe it makes good financial sense to buy your home rather than rent. Experts predicted that rents for apartments would increase year on year nationally – by average 8% in 2014-2015 – and rents will continue to increase by 7.5% each year in 2015 and 2016.

If the average national home loan interest rate hovered around 10,5% (they’re much lower today), homeownership may well be a better investment of your money, especially if you plan to stay in the home for at least five years. Experts estimate that buying will be cheaper than renting until the 30-year fixed rate reaches 12%, more than what it is currently!

Important homeowner costs to consider.

Down payment: 
Different loans require different amounts.

Insurance:
Property insurance is recommended. Flood or other types of coverage may also be required.

Property taxes: 
Varies widely. Determined by local city or state government.

Maintenance and home improvement: 
From a leaky faucet to new paints, you don’t have to fix everything yourself, but paying for and getting it done is your responsibility.

Reasons to keep renting for now.

Sometimes, due to your personal situation and long term plans, renting is currently a better option.

• You anticipate a change in employment or income in the near future.
• You’re not comfortable making a long-term commitment to a particular location or area.
• You need to build a stronger credit history.
• You’re not prepared to handle responsibilities like leaky faucets, paint and other routine maintenance.
• You’re not financially ready to cover monthly and yearly costs for utilities, insurance and taxes.

*Everyone’s tax situation is different. Please consult a professional tax advisor.
** This summary is based on a Rs-30,00,000 home loan amount, loan term of 240 months and an interest rate of 10%.

Loanyantra Customer? Know your Benifits.

The major change this century is going through is e-commerce. Isn't it surprising at the change we are into now! To purchase an item say a saree or a shirt, earlier was the time when we used to go to different shops, explore and then decide and finally buy it if it is of the right price. Now it is all "online."  For what not and where not, this convenience has been experienced? 

Yes, home loan sector also takes up this change and makes it convenient to the customers. So is the convenience only till choosing the home loan or suggesting a home loan? No, loanyantra.com goes a little beyond this. Let us see till where loanyantra.com makes its customer convenient and above all risk-free.

Two friends conversing..

Friend 1 : Hi bro, finally I took a home loan from a bank after a lot of research.

Friend 2 : Oh cool. But I didn't research, I got associated with a company. 

Friend 1 : Company? what company?

Friend 2 : It is loanyantra.com... a website which manages your home loan. 

Friend 1 : But what is the need bro..is it really thaaat advantageous?

Friend 2 : Ok let me explain you. Suppose that both of us are in a home loan entered at a same time. Say loan of Rs.45 lakhs with interest of 9.50% with EMI being Rs.41,946 for 240 months. 

Friend 1 : Ok fine. Say the time to be Jan 2015. So our loan goes till 2035.

Friend 2 : Correct if there is a change in interest rate by 0.5%, the EMI to be paid will increase from 240 months to 271 months.

Friend 1 : Yes, ofcourse. What can anybody do with that.We just have to pay.

Friend 2 : No dear, that is what loanyantra.com does. 

Friend 2 (loanyantra.com customer)                             Friend 1

Home loan : Rs. 45  Lakhs                                                              Rs. 45 Lakhs

(Jan 2015)

Interest :       9.50%                                                                           9.50%

EMI :             Rs. 41,946                                                                    Rs. 41,946

Period :         240 months                                                              240 months

* (June 2015) Increase in interest rate by  0.5%

Period :        Remains at 240 months as he                              271 months

(June 2016-  paid 3 EMIs extra as part payment                     Still paying.

June 2027)    as suggested by loanyantra.

June 2027  :  Loan closed                                       

                     Total paid  - 

                     148 EMIs + 

                           36 EMIs                                                                     Still paying

                  (as partpayment suggested by loanyantra)

                   So,184 EMIs * 41,946 =  Rs.77,18,004

                                                

July 2027 : Started investing Rs.42,000                                      Still paying

                   in SIP till 56 months with 

                   average returns of 15%.

                                     

                                          

Jan 2032 :  Received Rs.34,19,126                                                        Still paying

                  (Left these returns untouched for 5 years)

                                     

June 2037 : Final returns received Rs.68,76,830           Loan closed 

                                                                                                     Total paid - 

                                                                                                     271months *41,946 = Rs.1,13,67,366.

Friend 1 : Those are really big figures!!! So, you say, with  loanyantra managing your home loan, you could finish your home loan faster and also could invest in investments of your preferred choice.

Friend 2 : Yes, dear. Remember that the above situation has change in interest rate only for once. In practice, the interest rate change can be many a times. So, each time researching might not be possible. So, why not leave it to the managing company. It costs you really a minimal.