Friday, 26 February 2016

The Single Woman’s Guide to Buying a Home in India

With women now taking leadership positions in every field, it is not uncommon to find them buying their own houses. Today’s smart investor, the independent, strong woman believes in buying her first home as soon as she starts earning, instead of waiting for Mr. Right to come along and do it for her. Easy home loans, a wealth of information available at one’s finger tips, and increased independence and decision-making skills come together to enable young women in today’s society to buy their first homes on their own.

Maybe you are moving to Bangalore, shifting to Delhi or need some life hacks before relocating to Mumbai? If you have decided to take the plunge and invest in your own apartment, here are a few home buying and moving tips you might want to keep in mind as you decide which property to buy!


The number of options and affordable houses available has made the job of a house hunter daunting. Detailed planning, however, can lend a semblance of order to this complicated task.

o The first step is, of course, to determine your budget. Speak to your bank to determine your loan eligibility even before you start looking!

o Determine the locality you want to live in – As a single woman, it makes sense to find a home close to your workplace. This not only reduces the time of travel, but also reinforces the aspect of safety if you work at odd hours. If your parents live in the same city, do find an apartment which is a convenient distance from theirs so that you can have the privacy of your own place without going too far from home. If you are buying a home which you intend to let out on rent, choose a location close to a business district so that your home will have many rental takers.

o Identify a property - Once you have decided which area you want to live in, browse the Internet for an ideal house for sale, or look through the newspaper offers and launches to identify the projects which best suit your requirement. Do remember that you will be spending considerably more than the basic cost indicated on advertisements, as extra costs like registration costs, maintenance costs, floor-rise charges etc. get added to the basic price at the time of purchase.

o Learn the jargon – Familiarise yourself with terms such as carpet area (the actual area of the house), super built-up area (the area including common areas), repo rates (influences the interest rate of home loans from banks), etc. before you start discussing a purchase.


Once you have shortlisted the properties which look best on paper, it is time to start calling the marketing offices or portals like to schedule site visits.

o Most builders these days arrange cabs which pick you up and drop you at your doorstep after showing you the property, and the homes for sale in question. Do ask a friend or someone from your family to accompany you on such site visits.

o It is difficult to gauge the space available in a raw flat. Do ask to be shown a model flat to get an idea of what a finished apartment will look like. A model apartment is designed to showcase the property in the best way possible, but not always in the way you will use it. It will help you to think about where you will be placing closets and what size beds you plan to use in order to understand if the apartment is designed to your liking.

o When speaking to the marketing person, insist on a break-down of the various charges in the final cost.

o Bargain! Most builders charge a higher per-square-foot rate than is recommended by the government agencies. Do not hesitate to ask them to drop the rate to a more reasonable amount.

o Check out the neighbourhood – Drive around the neighbourhood and speak to the people who already live there to see if everything you need on a day-to-day basis is easily available. Ask around to make sure that the neighbourhood is safe even at night.

o Connectivity and transport – If you do not own your own transport, make sure enough safe transport is available at all times of the day. One of the best safety tips for women is to be aware of the neighbourhood and making use of all that it has to offer.


o Legal Documents - Make sure you receive a copy of the legal documents and have them verified by a trusted lawyer before you make a payment. If you are taking a bank loan, the bank takes over this task for you.

o Occupancy Rate - If you are planning to move into your new home, do ensure that project or building is 50 – 75% occupied. This reinforces the sense of security, and also ensures you have enough company when you need it.


When you have found the house which is just right, it is time to move in! The task comes with its own list of things to do, and expected and unexpected expenses. Fortunately, when you are a single woman, you can take your time to make big additions to your home, such as a modular kitchen, cupboards in every room, and a crockery shelf for your china. Concentrate on purchasing the basic requirements first to put together a comfortable home, and keep adding to it as you go along.

o Furniture you will need – A comfortable mattress is more important than a bed! Invest in one which will make sure you get a good night’s sleep so that you are fresh and ready to take each day head on!

o The essential appliances - A Washing machine, a refrigerator, a microwave and cooking gas are must-haves in any home. They reduce your dependence on external services and make your home a stress-free zone.

o Work and fun – Invest in an internet connection, cable TV, and a good television set to keep you entertained and give you the flexibility to work from home.

o Do install safety devices such as an extra door-lock, a safety chain, and a doorbell with a camera, so that you can relax in the security of your home.

Buying and setting up a home is hard work for anyone, but especially so if you are a single woman in an unfamiliar city, and taking a loan to do so. However, taking it one step at a time and researching thoroughly ensures that you make a purchase which is not only a good investment, but an asset for a lifetime!


Thursday, 18 February 2016

Reverse Mortgage: Unlocking Liquidity In Your Old Age

Even after a decade since its launch in India, reverse mortgage schemes have seen a lackluster performance. The primary reason behind this is that people in India attach lot of emotional value to their homes. Property is supposed to be transferred from generation to generation unless there is a grave financial crisis. However, these schemes are popular in many Western countries, where people look at it as a means to a steady income after retirement.

What are reverse mortgage loans?

Reverse mortgage loan could be simply explained as a loan against property, with certain special features. Under such a scheme, a senior citizen, who has a self-occupied house, may get a regular income or a lump sum amount by mortgaging the property to a bank or a financial institution. The payment mode could be lump sum, monthly, quarterly, yearly, etc., at a certain rate of interest.

In case of a regular payment system, banks pay you for a long period, which may span over 20 years. Even if you have expensive homes in posh localities, there is no steady source of income after retirement. In such a scenario, the house becomes more of a liability as you have to pay taxes, bills and maintenance costs of the house along with your personal expenses. Reverse mortgage comes to the rescue of such people.

The repayment

Under reverse mortgages, the repayment of the loan is done either by the person taking it or by his successors after the completion of term. A borrower may terminate the mortgage midway by paying the amount along with the interest and other bank charges. In case of the death of the borrower, the legal heirs of the borrower can release the house by paying the amount due to the bank. If the borrower or his successor are not able to repay, the financial institution can recover the due amount by selling the house. Any excess amount received in the process is returned to the borrower or the legal heirs after his death.

The eligibility

To avail of a reverse mortgage loan, the borrower should be above 60 years of age and have a self-acquired and self-occupied residence. Borrower’s age, market value of the property and interest rates are the criteria upon which the loan is granted. While the borrower gets to reside in the house, he has to ensure payment all dues such as municipal taxes, utility bills, etc. While in a traditional house mortgage a borrower needs to show the proof of his ability to repay the loan, this is not required in reverse mortgage schemes; your property is your guarantee.

The benefits

Under reverse mortgage, the borrower does not have to pay the principal or the interest amount during the loan tenure. 
Considered to be a loan and not an income, the amount borrowed is also not taxable. 
While financial institutions keeps the property as a collateral, the ownership of the property lies with the borrower.
The shortcomings

The amount disbursed towards reverse mortgage is much less when compared to the amount one can obtain by going for tradition mortgage. Banks have generally capped the maximum loan amount at $10 million under such schemes. 
Under such schemes, the loan tenure is generally not beyond 20 years. Suppose a person aged 60 years avails of a reverse mortgage for 20 years and lives beyond the loan term of 20 years. In such a situation, the borrower will have to repay the loan at the age of 80 to retain the house. 
The biggest misconception surrounding such reverse mortgage is that people think that the property under the scheme gets irretrievable pledged to the bank.
Improvements required

While life expectancy in India is typically 65 years, reverse mortgage schemes offer loans to people above 60 years. In such a scenario, the scheme doesn’t serve the purpose because the person would have already spent the larger part of his life. To make these schemes more relevant, the eligible age for availing the loan should be reduced to 50 years. 
To avail of a reverse mortgage loan, you have to self-occupy the property and it cannot be given on rent. This also affects the popularity of such schemes. In certain cases the borrower in old age may not be requiring the entire house and should be allowed to lease or partially lease the house to supplement his income. 
Instead of 20 years, the loan tenure should be made borrower’s lifetime.

Source: MakaanIQ

Tuesday, 9 February 2016

The Wisdom Tree Community- Model Apartments Pictures

The Wisdom Tree Community is a Residential Gated Community which comprises of 2 BHK, 3 BHK units and 4 BHK duplex penthouses in 3 residential towers. The project is located at Hennur (North Bangalore), Bengaluru just 12 kms from M.G.Road, on Hennur - Airport road.

There are three blocks in The Wisdom Tree Community which comprises of 236 flats and is designed by Sonnel Architects & Designers, Dubai. Spread over 4 acres with 1 acre of tree cover coupled with a family centric approach, The Wisdom Tree community is a unique investment for your housing needs.

- 12 kms from M.G.Road
- It is the hottest destination for residential development
- It is in close proximity to Economic Growth Drivers
- Close to Premium Educational Institutes
- Proposed Railway from Hebbal to the Bangalore International Airport
  with a travel time of 15  minutes
- Complimentary membership to Balance-The Club equipped with world class amenities


De-jargoned: Foreclosure of a property

In 2015, many public sector banks conducted e-auctions of foreclosed properties valuing over Rs.5,000 crore to recover outstanding dues against these properties. State Bank of India, Dena Bank, Canara Bank and Indian Bank, were some of the banks that conducted the e-auctions. The types of properties auctioned included residential houses, commercial spaces, plots and even industrial buildings. Let us take a look why lenders go for foreclosure and what they do with foreclosed properties.


When you buy a house with a home loan, you are supposed to pay back the loan with interest within a fixed tenure through equated monthly instalments (EMIs). However, if you default on paying the EMIs, the lender can foreclose the property against which you have availed the loan. The first time you default on your EMI, the bank will charge a nominal late fee. But if you delay the subsequent instalment as well, the bank will send you an intimation reminding you about the outstanding payments. If you fail to pay three consecutive EMIs, the lender will send you a demand notice asking you to pay the due EMIs along with the late fee at the earliest. A demand notice is typically sent to the borrower as well as the guarantor of the loan. It calls upon them to pay their dues in full within 60 days from the date of notice.

If even after repeated follow-ups and lapsation of notice period you fail to pay, the lender will declare the loan as a non-performing asset (NPA), or a bad loan. After that, it takes custody of the property under the provision of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (Sarfaesi) Act, 2002.


According to the Sarfaesi Act, when a borrower fails to repay her loan, the lender can take control of those assets allocated as security for a loan, without any intervention of a court of law. This helps banks adopt measures for recovery or reconstruction, and reduce their NPAs. Once the lender acquires the property, it either sells or leases it out, or assigns the right over the property to another entity to manage. After sale of the property, the lending institution keeps the outstanding dues, and the remaining money, if any, is given to the defaulting borrower.


The reserve price of these properties are usually kept 10-15% lower than the market value, so that buyers find it attractive enough to participate in the auction. However, before participating in the bid, do your own due diligence of the property on offer. For instance, find out the reason why the borrower defaulted on her loan. Check if the reason for default was due to financial constraints or issues related to the property. Do keep in mind that these properties are sold on an “as is where is” and “as is what is” basis, so consider the cost of repairs and renovation while determining the fair value. Also, make sure you have the required funds available with you to make the payments. To participate in the bid process, you have to pay 10% of the reserve price. Successful bidders need to pay 25% of the auctioned price within 24 hours, and the entire amount within 15-30 days.

SOURCE: MintLive