How to pay home loan EMIs in case of job loss?

 Mentioned below are steps a home buyer can take, if his income sources have been adversely impacted because of this crisis.

The unemployment rate in India rose to 8.30% in December 2022 from 8.00% in the previous month, data from the Centre for Monitoring Indian Economy (CMIE) showed on January 1, 2023. This is the highest this rate has been in 16 months. Individually, the urban unemployment rate rose to 10.09% in December from 8.96% in the previous month while the rural unemployment rate declined to 7.44% from 7.55%. Either way, this makes one wonder. How would one pay the home loan EMIs, if they were to lose their job?

Home buyers in India largely depend on housing finance to make a home purchase. This means a large number of buyers are under tremendous pressure due to the prevailing employment scenario. So, what should a home buyer in India do, if his income sources have been adversely impacted?

“Ideally, a home loan borrower should include his home loan EMI of at least six months in his emergency fund. Including this would allow the borrower to continue with his EMI payments, even during financial emergencies like job loss,” says Ratan Chaudhary, head of home loans,

Opt for EMI holiday, if available

If a bank allows EMI holidays, there are certain things that the beneficiaries must be mindful of. First of all, it is not an EMI holiday – you will have to pay the money later, with interest. A moratorium only means that you have got a few months’ relaxation without the late payment being categorised as a ‘default’ in your credit history. Additionally, whether the benefit is extended to you, would be your lender’s call and the interest to be charged for the delayed EMI payments would also be at the bank’s discretion.

Suppose your home loan EMI is Rs 40,000. Upon non-payment, this amount will be added to the loan principal. In the next month, the interest will be computed on the loan outstanding, along with Rs 40,000.

For a borrower who has been laid off, not taking this option is not actually an option. “While availing of the moratorium will cost them additional interest cost, it will give them at least a two-month window, to get a job or arrange funds from other sources, without hurting their credit score,” says Chaudhary.

Money from severance package

Once any moratorium period ends, a borrower will have to arrange the money to pay his home loan EMIs or face the usual consequences – the default would find a mention in your credit history and the bank would charge a penalty on each default, apart from the interest.

At this point, you may be forced to use the money from your severance package to make the payment. This amount would technically be equal to the salary of the number of months mentioned as your notice period under your job contract. You will for instance, get at least two months’ salary as part of your severance package, if your notice period is two months. Since this money is all you have for the time being, you have to be careful in spending it. While you use this money to pay the home loan for now, look for other options in case you are not able to find employment for the time being.

Use Fixed Deposit (FD), Recurring Deposit (RD) money

You could also depend on your FD and RD to make the EMI payment for the simple reason that the interest you currently get on these (SBI FD interest is 5.50% for a one-year tenure, at present) would be much less than the interest you would pay on home loans (SBI home loan interest rate on a loan size of Rs 30 lakhs is 8.50%), more so in case of a default.

“Those who have failed to make provisions for home loan EMIs in their emergency fund, can redeem their existing fixed income investments not tied to any crucial financial goals, such as retirement corpus, children’s education fund, etc.,” says Chaudhary.

Withdraw from Provident Fund (PF)

Using your UAN login, you can withdraw this amount that could help you to pay the home loan EMIs for some months, till you find alternate sources. The best part of the plan is that your request of withdrawal of the PF money will be addressed within three days. To understand the PF withdrawal process, read our complete guide on Member Passbook.

Liquidate assets

Sell gold, liquidate debt instruments: Investment in various debt instruments can be liquidated at this juncture, to pay the home loan. You could also pledge gold and jewellery, to arrange funds for home loan EMI payment.

You could also consider selling automobiles, furniture and gadgets that are not a necessity at this point.

Alternatively, you could also take loan against gold – the interest rate on loan against gold starts at 7.25% and goes up to 18% annually. Considering this is a secured loans, banks would process the loan request quickly.

Equity investments, opines Chaudhary, should not be touched, as this would mean converting your notional losses into real ones. “The ongoing correction in the equity markets would have already reduced their portfolios by at least 30%,” he says.

Borrow from family, friends

Look for family support: Borrowing from family members and friends who are in a position to lend you money for the time being, could be another option. This option is advantageous as:

• You will not have to pay an interest on the amount.
• You will have more willing and less scrutinising lenders than a bank.
• You will not accrue penalty on the interest that you are not able to repay within a specified time.

Nevertheless, be realistic about the timeline when you plan to return the money as you are running the risk of stressing your personal relationship here.

Loan against insurance policy

Your life insurance policy can also come to your aid, if you have to borrow money and have no other option at your disposal. You can opt for a loan against the insurance policy. Apart from the fact that your insurance company will be able to disburse the loan quickly (it already has all your details), this debt would be comparatively affordable. The rate of interest on the loan against an insurance policy, is much cheaper than getting a personal loan.

Things home buyers should not do if they are paying EMI

Here are certain things that you should not do, as you deal with tough times in your life:

Avoid the lender: The first thing the borrower should do, is to inform the bank about any job loss. Avoiding them at this juncture would be the worst thing to do. Genuine borrowers would not find it difficult to convince the bank to refinance the loan. For example, by prolonging the tenure, the EMI amount could be reduced.

Expect a salary hike: In a bad job market, finding a job might be a painful process. You should not be averse to a job offer that would pay you not more than your last salary package, or in fact, pay less. Remember, this is only for the time being. You may find a job suited to your skill and profile when things get back to normal.

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Here’s what you must keep in mind before buying property in 2023

 Should you buy, or rent? Should it be a ready-to-move-in apartment or an under-construction one? Here’s a list of to-dos, may-dos, and most certainly don’ts.

Richa Kulkarni, a chartered accountant, moved to Mumbai from Bengaluru seven years ago and has been paying about Rs 50,000 rent per month for a house in a gated community in Kandivali, which has all the amenities.

She recently shortlisted an under-construction property in the same area and paid the booking amount. She says that she consciously chose to stay on rent all these years as it was more cost effective and there were several rental options to choose from, as against making a capital investment where there would be strict budgetary constraints.

“If I had bought a house seven years ago, it would have cost me around Rs 2 crore and my EMI (equated monthly instalment) would have been Rs 1.5 lakh. My rent then was around Rs 40,000 per month. I have now decided to buy a house despite rising interest rates because I am more financially stable and have this emotional and aspirational factor to consider. Besides, loan eligibility is also a big factor. I may not easily get a loan as I grow old,” explains the 38-year old.

An apartment worth Rs 2 crore in a Mumbai suburb with a rental yield of about 1.5 percent per annum will cost Rs 3 lakh per year in rent. Even if a person decides to stay on rent in the same apartment for years, he may end up paying Rs 1.99 crore in 30 years instead of shelling out the total amount in one go.

“Even if one were to assume that there is a 5 percent rental escalation every year, one will have approximately 30-35 years to pay the lumpsum amount that a homebuyer would need to pay now. Most homebuyers opt for home loans, which significantly adds to the cost of ownership. There’s also the added advantage of mobility. You can move homes across cities at a drop of a hat. This is the prime reason why millennials and GenZ are preferring to rent houses. Having said that, if the emotional attribute of owning a house weighs heavy on the family, then the purchase becomes necessary,” explains Abhishek Kiran Gupta, CEO, CRE Matrix, a real estate analytics firm.

It boils down to whether you can afford that rental / EMI

The single most important factor to answer the question of whether to buy or rent is one’s budget and availability of ready finance. Remember, interest rates are at an all-time high and so are rentals in some markets. If your rental budget is Rs 20,000 per month and the rents in your area have shot up to Rs 30,000, it’s time you considered areas 5 km away where rents would still be Rs 20,000. But if you are open to buying a house 15 km away from your current location and financially secure enough to pay around Rs 60,000 per month as EMI, you should consider buying an apartment.

Hefty down payment

If you’re sure you can afford a house, make sure you do the due diligence. Experts say that as far as possible and depending on your age, it’s always good to pay up a sizeable amount as down payment. The more the better, in fact. This is important because you may be able to service fatter EMIs today but not in the future if you do not have a job. With inflation rising, what if your debt-to-income ratio gets into an uncomfortable zone?

Ready-to-move-in or under-construction?

Ask yourself whether you want to buy a property which you can live in right away, or can wait three years, say. Accordingly, decide whether to buy a ready-to-move-in property or an under-construction one.

The ideal thing would be to go for a ready property. If your budget is slightly stretched, you can consider a soon-to-be-ready project that is at least 80 percent complete. There will be minimal risk of the project getting delayed, which is a critical factor. There are severe financial implications if a project is delayed. You would not only have to pay home loan EMIs, but also rent for the apartment you reside in. Do make sure that the project has received an occupancy certificate from the authorities and that flats are being registered.

Having said that, if you do not have adequate funds and can wait for some time, an under-construction property by a reputed builder is the way to go. There are always more options available when you decide to go in for an under-construction property, You may get the floor and the house number of your choice, you could have adequate sunlight, maybe even a terrace or a garden. But then, there is always the risk of non-completion. Take your pick.

Who should buy?

Those who are employed and have 25-30 percent of the cost of the apartment available for investment. Remember, banks will only fund 80 percent of the cost . Those who already own a home can consider upgrading to a more spacious apartment.

Don’t buy for quick profits or short-term gains.

Besides apartments, buyers could even consider buying into a plot by a Grade A developer.

Should you buy now?

Interest-adjusted affordability is still higher than inflation-adjusted prices. This means that incomes have risen more than prices, so people would still be able to afford houses. “If the house is affordable and suits your pocket, you can think of buying it. But only end-users should venture forth as it is still not an investors’ market and capital appreciation is modest,” says Pankaj Kapoor of Liases Foras.

According to Dhruv Agarwala, Group CEO of Housing.com. Proptiger.com, and Makaan.com, you cannot time the real estate market as far as buying a home is concerned. His advice is that buyers should get on to the realty investment ladder even if it is for a small home. “Don’t live in it. Rent it out and trade up for a bigger apartment to live in when you can afford it. Don’t keep waiting for the perfect time. if you keep waiting for the perfect time, then you may never end up pulling the trigger,” he adds.

Things to keep in mind before buying a house

A buyer should make sure that the title of the seller is clear and free from encumbrances. In case of a secondary purchase, all property-related documents for the last 30 years should be examined. If documents for 30 years aren’t available, then at least documents for the last 12 years should be examined.

In case of a new project, the layout plan should have been approved by municipal authorities. An occupancy certificate from the competent authority should be obtained before taking over the property. If this has not been obtained, there is a risk of the property not getting registered.

The project should also be registered under RERA and the buyer should verify if all its provisions have been complied with. Most importantly, even if the project is RERA-registered, do not purchase property from a builder who is sitting on debt.

Estimate the total cost of ownership, including parking charges, stamp duty, registration charges, interiors, etc. Take into account the monthly maintenance charges that you may have to pay.

Make sure you keep three to four options open and don’t fixate on a single property. The golden rule is to explore. Of four properties you select, at least one developer or seller in the resale market will get back to you. The buyer should be willing to negotiate hard or walk away.

It’s advisable for buyers to choose the right location. See that there are proper roads leading up to the project, enough shops for daily needs, and that schools and hospitals are close by. Most importantly, check the distance to your workplace (offices will not remain shut forever) and the modes of transport available. As an end-user, don’t buy into futuristic no-man’s lands.

Get More Information About Residential Flats for sale in Thane And For More Details Visit Propertythane.com Or Email Us On info@propertythane.com

Here’s what you must keep in mind before buying property in 2023

 Should you buy, or rent? Should it be a ready-to-move-in apartment or an under-construction one? Here’s a list of to-dos, may-dos, and most certainly don’ts.

Richa Kulkarni, a chartered accountant, moved to Mumbai from Bengaluru seven years ago and has been paying about Rs 50,000 rent per month for a house in a gated community in Kandivali, which has all the amenities.

She recently shortlisted an under-construction property in the same area and paid the booking amount. She says that she consciously chose to stay on rent all these years as it was more cost effective and there were several rental options to choose from, as against making a capital investment where there would be strict budgetary constraints.

“If I had bought a house seven years ago, it would have cost me around Rs 2 crore and my EMI (equated monthly instalment) would have been Rs 1.5 lakh. My rent then was around Rs 40,000 per month. I have now decided to buy a house despite rising interest rates because I am more financially stable and have this emotional and aspirational factor to consider. Besides, loan eligibility is also a big factor. I may not easily get a loan as I grow old,” explains the 38-year old.

An apartment worth Rs 2 crore in a Mumbai suburb with a rental yield of about 1.5 percent per annum will cost Rs 3 lakh per year in rent. Even if a person decides to stay on rent in the same apartment for years, he may end up paying Rs 1.99 crore in 30 years instead of shelling out the total amount in one go.

“Even if one were to assume that there is a 5 percent rental escalation every year, one will have approximately 30-35 years to pay the lumpsum amount that a homebuyer would need to pay now. Most homebuyers opt for home loans, which significantly adds to the cost of ownership. There’s also the added advantage of mobility. You can move homes across cities at a drop of a hat. This is the prime reason why millennials and GenZ are preferring to rent houses. Having said that, if the emotional attribute of owning a house weighs heavy on the family, then the purchase becomes necessary,” explains Abhishek Kiran Gupta, CEO, CRE Matrix, a real estate analytics firm.

It boils down to whether you can afford that rental / EMI

The single most important factor to answer the question of whether to buy or rent is one’s budget and availability of ready finance. Remember, interest rates are at an all-time high and so are rentals in some markets. If your rental budget is Rs 20,000 per month and the rents in your area have shot up to Rs 30,000, it’s time you considered areas 5 km away where rents would still be Rs 20,000. But if you are open to buying a house 15 km away from your current location and financially secure enough to pay around Rs 60,000 per month as EMI, you should consider buying an apartment.

Hefty down payment

If you’re sure you can afford a house, make sure you do the due diligence. Experts say that as far as possible and depending on your age, it’s always good to pay up a sizeable amount as down payment. The more the better, in fact. This is important because you may be able to service fatter EMIs today but not in the future if you do not have a job. With inflation rising, what if your debt-to-income ratio gets into an uncomfortable zone?

Ready-to-move-in or under-construction?

Ask yourself whether you want to buy a property which you can live in right away, or can wait three years, say. Accordingly, decide whether to buy a ready-to-move-in property or an under-construction one.

The ideal thing would be to go for a ready property. If your budget is slightly stretched, you can consider a soon-to-be-ready project that is at least 80 percent complete. There will be minimal risk of the project getting delayed, which is a critical factor. There are severe financial implications if a project is delayed. You would not only have to pay home loan EMIs, but also rent for the apartment you reside in. Do make sure that the project has received an occupancy certificate from the authorities and that flats are being registered.

Having said that, if you do not have adequate funds and can wait for some time, an under-construction property by a reputed builder is the way to go. There are always more options available when you decide to go in for an under-construction property, You may get the floor and the house number of your choice, you could have adequate sunlight, maybe even a terrace or a garden. But then, there is always the risk of non-completion. Take your pick.

Who should buy?

Those who are employed and have 25-30 percent of the cost of the apartment available for investment. Remember, banks will only fund 80 percent of the cost . Those who already own a home can consider upgrading to a more spacious apartment.

Don’t buy for quick profits or short-term gains.

Besides apartments, buyers could even consider buying into a plot by a Grade A developer.

Should you buy now?

Interest-adjusted affordability is still higher than inflation-adjusted prices. This means that incomes have risen more than prices, so people would still be able to afford houses. “If the house is affordable and suits your pocket, you can think of buying it. But only end-users should venture forth as it is still not an investors’ market and capital appreciation is modest,” says Pankaj Kapoor of Liases Foras.

According to Dhruv Agarwala, Group CEO of Housing.com. Proptiger.com, and Makaan.com, you cannot time the real estate market as far as buying a home is concerned. His advice is that buyers should get on to the realty investment ladder even if it is for a small home. “Don’t live in it. Rent it out and trade up for a bigger apartment to live in when you can afford it. Don’t keep waiting for the perfect time. if you keep waiting for the perfect time, then you may never end up pulling the trigger,” he adds.

Things to keep in mind before buying a house

A buyer should make sure that the title of the seller is clear and free from encumbrances. In case of a secondary purchase, all property-related documents for the last 30 years should be examined. If documents for 30 years aren’t available, then at least documents for the last 12 years should be examined.

In case of a new project, the layout plan should have been approved by municipal authorities. An occupancy certificate from the competent authority should be obtained before taking over the property. If this has not been obtained, there is a risk of the property not getting registered.

The project should also be registered under RERA and the buyer should verify if all its provisions have been complied with. Most importantly, even if the project is RERA-registered, do not purchase property from a builder who is sitting on debt.

Estimate the total cost of ownership, including parking charges, stamp duty, registration charges, interiors, etc. Take into account the monthly maintenance charges that you may have to pay.

Make sure you keep three to four options open and don’t fixate on a single property. The golden rule is to explore. Of four properties you select, at least one developer or seller in the resale market will get back to you. The buyer should be willing to negotiate hard or walk away.

It’s advisable for buyers to choose the right location. See that there are proper roads leading up to the project, enough shops for daily needs, and that schools and hospitals are close by. Most importantly, check the distance to your workplace (offices will not remain shut forever) and the modes of transport available. As an end-user, don’t buy into futuristic no-man’s lands.

Get More Information About Thane Property Exhibitions 2023 by CREDAI MCHI Thane And For More Details Visit Propertythane.com Or Email Us On info@propertythane.com

How To Make The Most Out Of A Property Exhibition?

 Visiting an on-ground property exhibition scores high over a virtual one because investors can know exactly what to expect from their assets

It’s a good time to step outdoors if you’re on a house hunt. While you might have researched online for homes in the market, a visit to a property exhibition can prove to be quite beneficial as you get to meet the developers and builders upfront. If you’re still trying to figure out what a property exhibition offers and how to make the most of your valuable time visiting one, then refer to the following tips.

Choose The Top Exhibition

For quite some time, property shows wereconducted on digital platforms. However, on-ground shows are now being held all across the city, making it difficult to choose which one to visit. Browse through newspaper advertisements to verify the scale and credibility of the organisers and participants. Those that are organised by reputed industry bodies of real estate developers are your safest bet. These expos usually see participation by top real estate companies.

Stamp duty on gifting for an NRI

At property exhibitions, the choice of properties, too, is vast, offering a range of ticket sizes and price tags to take your pick from and finalise the deal on the spot.

Choosing the right exhibition will help save your time and arrive at a decision sooner.

Benefits Of An On-ground Exhibition

According to a national real estate developers’ organisation, attending an on-ground exhibition has more benefits to offer than a virtual one.

When you attend a real estate expo, it provides opportunities for in-depth knowledge about the market conditions, networking with real estate developers and their associate companies such as banks and housing finance companies (HFCs), getting first-hand information about the properties on sale, and discussing and negotiating the best deal on the table.

For real estate agents who are looking to expand their business, an expo offers a great business environment to discuss new strategies and build stronger relationships to help the real estate brokerage business thrive.

The Model Home Walkthrough

Serious home seekers can get a lot out of a property expo especiallyone that has developers offering a physical walk-through of model homes fabricated at the venue. Yes, a furnished model flat installed at the expo can give buyers a firsthand experience of what their home will look like, the floor area they’ll get if they buy the property, how it could be designed and furnished, and the quality of fixtures and products that come with the price tag. It’s definitely an advantage if several developers offer this immersive experience before you decide to visit the site of the property itself.

Home Finance Options

One of the advantages of visiting a property expo is the range of HFCs and banks offering on-the spot finance for home purchase. At a property exhibition, you can expect the participating developers and their partner housing finance organisations to have their kiosks right beside each other. A majority of banks and HFCs partner with real estate developers to offer good deals on housing loans at the best interest rates in the market. And at a large expo there are chances of securing on-thespot finance for your home when you can meet and negotiate with the developer and lender together at the same place. And if you are an existing customer with the lender and have a strong credit record, getting a pre-approved loan will get you a better deal from the developer.

Range Of Options For Investors

A real estate expo is not just for homebuyers alone. Along with residential options, the scope of an exhibition includes commercial properties, business centres, multiplexes, recreation clubs, holiday resorts and so on. This is for all those who are looking to buy or invest in different real estate categories. It is one of the aspects to ascertain before you step into a property expo. So, if you are apotential homebuyer and also plan to invest in a holiday home, you should research if the developers of these properties are participating at the expo. This makes it possible to meet them in person to discuss the terms and conditions, thus eliminating any ambiguity. All in all, visiting a property expo where you get to meet and interact with the real estate players to clinch the best deal on the property of your choice sure has its advantages.

Get More Information About Thane Property Exhibitions 2023 by CREDAI MCHI Thane And For More Details Visit Propertythane.com Or Email Us On info@propertythane.com