Become Eligible For a Loan Before Buying Property in India

When one is considering buying property in India using a loan it is crucial to understand how to finance the property. Many who are young can leverage on the future income we will earn and hence can easily avail of a home loan. There are however several factors that work against young people if such individuals try to take a home loan.

A few factors that work against a successful loan application for young people are.

Paying EMI’s on Existing Loans

If one is young and single it is likely that such a person is enjoying spending his or her time with friends and also has bought a two-wheeler or car and is paying off loans on the same. To most young people in their mid twenties such items are necessities and are a part and parcel of new found freedom and a modern urban lifestyle. Buying real estate in India is however not a frivolous activity and requires a mature buyer.

While an attractive car or bike today is a necessity, buying the same on an EMI lowers the individual’s chances of being approved for a home loan. Relying too much on credit signals to banks that the individual does not save enough to pay for certain products outright from his or her earnings or salary. Paying off such loans before buying a house thru a loan is recommended. By spending time online on real estate websites in India, one can judge how one should be positioned financially before applying for a home loan.

Bounced Cheque’s and Low Balance

A banking institution that wants to loan money to a prospective customer wants to ensure that they receive repayment in a safe and timely manner. If the loan application of an applicant shows that their account has always maintained a low balance it spoils the chances of being approved for a loan.

Additionally, bounced cheques spoil one’s creditworthiness and greatly lower one’s chances of being approved for a loan. A lending institution is risking money on someone who has applied for a loan, when it is found that such an individual has numerous bounced cheques in the past it signals to the lender that such a person is not serious about his or her financial status and also that he or she keeps a permanently low balance in the bank account.  Those who are serious about buying residential property in India need to be serious about most facets of their life.

Too Much Prada

Having expensive tastes also works against someone when applying for loan application. If someone is paid on the first of a month and by the end of the money is left with a zero balance in their account, it signals to a bank that such a person is a spendthrift and spends one’s money on frivolous luxury products. When buying real estate property an applicant must be able to signal to the lender that they are mature individuals who are serious about their first big steps in life.

Need for Regulatory Reforms in Indian Real Estate Sector

The real estate market of India has been in focus since the time it has been generating business. Several developers are trying to learn the art of selling properties whether it is a commercial or residential one. There are several factors owing to the stupendous expansion of property in India and one of them is stability. In the initial phase of this business, the market projected huge variation in the prices and future plans, however, it picked up pace after the year 2009 and has been unstoppable since then.

On the way to become one of the highest grossing industries of India, real estate has been able to generate traffic because of the following organizational reforms by the government-

Smart City Program

Launched officially by the government of India, the smart cities mission comprises of rules & regulations that are ensuring a steady development for the country. The mission aims at developing 100 cities into a profitable and sustainable environment for investors all over the world. By modernizing the existing cities into high-end and luxurious locations, government is leaving no stone unturned to enhance the present real estate industry of India.

Real Estate Regulatory Bill

In order to bring clarity and transparency for both buyers as well as developers, the Indian government has passed the real estate regulatory bill this year. Over the years, there has been absence of a governing body looking after the ups and downs of real estate in India. However, with the passage of time this need is being rectified and the regulatory bill is here to ensure that. While it is there to help both the parties, buyers are going to get benefitted the most out of it. Often lured into fake promises by developers, investors can now know everything about a property they are investing in. From government approvals to project layout, everything is going to be completely transparent for buyers. Apart from these benefits, the regulatory bill is here to make sure that there are no more forgeries in the realty sector of India.

Make in India

The government has approved Make in India property in the year 2014 and it has seen quite a lot of developments since then. The initiative has been launched with a vision to encourage more business in India irrespective of their domains. This also includes the real estate projects of the country that have been at the backstage since quite a long period of time. One of the prime focuses of this proposal is to increase job opportunities in the country and by improving the realty sector this goal is being achieved by the government.

Moving ahead

While it has been very clear that government has a very major role to play in the economy of a country, private sector of India also has a huge contribution towards it. Although, government initiatives are helping out the industry, buying property in India is still a very delicate process. Hence, it is very important for both the sectors to work in tandem and achieve a goal of providing homes and employment to almost everyone living in the country.

The Journey of Real Estate in India: A See-through

Real estate in India has been in the limelight more than ever and there are several reasons for it. When we talk about the realty market, one thing that pops on everyone’s mind is the global financial crisis of 2008-09. After this period of time, things started to become steadier and builders too got a hold of the exact situation of Indian real estate market. Apart from these changes, government’s role also came into forefront and that made situation easier to handle and understandable by both the buyers as well as developers.

Introduction of New Policies

The real estate demand came with a major boom in the industry and that has been possible with the help of government policies. The regulations launched are not only helping to bring transparency but is also making buyers comfortable and confident about a decision they are making. In order to overcome a slow progress of realty sector, Indian government has stressed on developing the smart cities project along with affordable homes for every section of the society.

Increasing differences in the social sector of the country has made it troublesome for developers to build properties that are suitable for everyone. For example, to boost cash inflows for builders, government has introduced rules relaxation of FDI. This has been done by reducing capital requirement and minimum built-up area that also eases out the exit norms for both the parties.

Residential Vs Commercial Properties

While there has been a lot of debate about the most wanted property in India, there has never been a clear answer to it. To start off with the discussion, it is rather difficult to decide which one has an edge over the other. The residential and commercial properties are both in demand and have been showing a tremendous growth over the last decade. As urbanization is on a roll, so are the demands associated with it!

When people move to urban areas, they obviously need a place to stay and be a part of living in a developing city. This has been the situation with residential properties in the country and thus, commercial properties too are in sync with it. The fact that people who move to bigger cities are doing so for better employment opportunities, has made this relation to grow stronger over the course of time.

The Future Outlook

Although, in India the smart city concept is still picking up pace, one thing that holds true is the increasing demand of real estate properties. Therefore, in this regards, India has a lot to learn from foreign investors that are always aware of the market situation and then act accordingly. While it is still unknown that how far real estate in India could climb in this race, it surely has made some phenomenal changes so far.

Emerging trends in the country has forced developers to step out of their nutshell and move beyond contemporary way of building properties. There is still a lot to be achieved and we are already on the road to recovery by learning some good lessons from the real estate pitfalls.