The entire world witnessed an unexpected economic slowdown in the past couple of months, and India is no exception to that. GDP of the country fell by 7.3% during the financial year 2021. There is hardly any sector that escaped this economic turmoil, including the real estate sector.
Due to such reasons, property prices have been stagnant, and housing loan rates are significantly low at this time. So, individuals intending to invest in a property should know that now is a good time to do so.
Unseen benefits of taking a Housing Loan now
These are three benefits of availing a home loan now:
- Decreased housing prices
Property prices have not grown much since the economic slowdown. Further, in some cases, there has been a significant drop in prices for properties. According to the RBI, home prices fell by 1% in 2020’s third quarter, on average. Hence, individuals are more interested in purchasing low cost properties. Accordingly, they are approaching financial institutions upon meeting the home loan eligibility criteria.
- Added incentives
Given this situation, certain developers have added various incentives to attract buyers. In addition, several benefits such as no EMIs until possession and a temporary cut in stamp duty, among others, have further spurred the interest of homebuyers.
- Interest rate drop
Homebuyers are also benefiting hugely from the recent repo rate cut by the RBI. The country’s central bank cut the repo rate 115 basis points as an effort to boost the economy within the last 2 financial years. This cut in repo rate has significantly affected the current home loan interest rate in India.
In short, buying a house now would be a lot easier for individuals. Additionally, women buyers get to enjoy several other added benefits. For instance, in some states such as Uttar Pradesh, Bihar, and Delhi, women buyers have been paying a lower stamp duty starting this fiscal year.
On the other hand, existing home loan borrowers will continue to enjoy indirect benefits from their lenders. For example, they can reap the benefits of lower interest rates by changing their current lender through the home loan balance transfer facility.
Moreover, leading financial institutions also provide pre-approved offers to existing customers to simplify the application process. Individuals can avail such offers on multiple financial products, including home loans and loans against property and benefit accordingly. To check your pre-approved offer, you have to enter basic details such as name and mobile number.
Despite this being the right time to take a housing loan, there are still some factors that borrowers should consider to make an informed decision.
Things to consider while availing a home loan
One should be aware of the basic home loan aspects before proceeding. Here are a few crucial things to consider before taking a home loan:
- Interest rate
Individuals must take into account the interest rate levied by different financial institutions before settling with one. Therefore, comparing different lenders helps individuals pick the most convenient loan option and facilitates smooth repayment.
To make the process simpler, borrowers can use EMI calculators available online. Such a tool helps to determine home loan EMI quickly and facilitates better repayment planning.
Before contacting a lender, individuals must be informed about the necessary documents needed to avail a home loan. Typically, applicants must submit documents that serve as proof of income, identity, and employment to secure loan approval.
- Additional charges
Some financial institutions charge additional fees at the time of loan application. If an individual is not happy to pay extra, they should discuss these charges with the lender.
Hence, it is clear from the above sections why this is the right time to avail a housing loan. Also, now that individuals are aware of a few factors that should be considered before taking a home loan, they can make an informed decision and plan their loan repayment accordingly.