Friday, July 28, 2006

How to apply home loans in India


1. When can I apply for a home loan?

You can apply anytime after you have decided to acquire or construct a property, even if the property has not been selected or the construction has not commenced. Besides,you can also avail of the loan facility even if you want to renovate or extend your home.

2. How do I make an application?

You need to approach a Housing Finance Company with the latest salary slips and TDS form 16 of the last to financial years of yourself and your co-applicant, if any. The loan officer after going through the details of the documents will informally tell you the loan amount you are eligible for and the terms of the same. You need to submit the application form along with the necessary documents. On receipt of the application form, the HFC reviews it, asks questions wherever necessary and convey its decision to the applicant. You are advised to visit more than one company since you are likely to get better terms/ larger loan amount if you shop for the best deal.

3. What are the types of home loans available?

There are a variety of home loans available:
a. Home Purchase Loans
b. Existing Home Improvement Loans
c. Home Construction Loans
d. Home Extension Loans
e. Home Conversion Loans
f. Land Purchase Loans
g. Bridge Loans
h. Balance Transfer Loans
i. Refinance Loans
j. Stamp Duty Loans
k. Loans to NRIs
a. Home Purchase Loans:This is the basic home loan for the purchase of a new home.
b. Home Improvement Loans: These loans are given for implementing repair works and renovations in a home that has already been purchased by you.
c. Home Construction Loans:This loan is available for the construction of a new home.
d. Home Extension Loans: This is given for expanding or extending an existing home. For example addition of an extra room etc.
e. Home Conversion Loans: This is available for those who have financed the present home with a home loan and wish to purchase and move to another home for which some extra funds are required. Through a home conversion loan, the existing loan is transferred to the new home including the extra amount required, eliminating the need for pre-payment of the previous loan.
f. Land Purchase Loans : This loan is available for purchase of land for both home construction or investment purposes
g. Bridge Loans: Bridge Loans are designed for people who wish to sell the existing home and purchase another. The bridge loans helps finance the new home, until a buyer is found for the old home.
h. Balance Transfer Loans: Balance transfer loans help you to pay off an existing home loan and avail the option of a loan with a lower rate of interest.
i. Refinance Loans: This loan helps you pay off the debt you have incurred from private sources such as relatives and friends, for the purchase of your present home.
j. Stamp Duty Loans: This loan is sanctioned to pay the stamp duty amount that needs to be paid on the purchase of property.
k. Loans to NRIs:This is tailored for the requirements of NRIs who wish to build or buy a home in India. EMI is the Equated Monthly Installment payable till the loan is paid back in full. It consists of a portion of the interest as well as the principal. Some of the incentives offered by lending institutions are :i) Some companies sanction the loan without requiring you to identify property as a pre-requisite for eligibility. ii) Free accident insurance iii) Discounts iv) Waiving of pre-payment penalty v) Waiving of processing fee vi) Free property insurance

4. Can one take a home loan for construction in a city while working in another city?

Yes, you can take loan for construction in one city while working in another city. The HFC's generally service this loan after getting details of the plot legally verified.

5. How much time does it take to get an application processed and the loan getting sanctioned?

It takes around fifteen days for processing of one's application if the documentd are in order.It takes another week for the company to check out the property papers and make the disbursement.


6. What is the maximum amount which I can borrow?

Home loans are generally provided for in the range of 75%-85% of the asset value.The amount of loan varies from institution to institution and it may vary from Rs.1 lakh to Rs.1 crore.

7. How is the maximum amount derived?

The maximum amount which one can borrow is a function of many factors which includes primarily the purpose of the loan. In addition, ones residential status whether resident in India or non-resident will also have a bearing on the maximum amount of loan that one can borrow. Generally, if one is a resident Indian, then he can borrow upto 85% of the cost of the property.

8. How is my loan eligibility determined?

The primary concern of the HFC's in determining the loan eligibility is that you are comfortably able to repay the amount you borrow. Your repayment capacity is determined by taking into consideration factors such as income, age, qualifications, number of dependants, spouse's income, assets, liabilities, stability and continuity of occupation and savings history.

9. What are the repayment period options?

Repayment period options range generally from 5 to 15 years. A few HFC's also offer a 20-year repayment period, usually at a higher interest rate. As a non-resident, you can avail of a loan only for a maximum period of 7 years.


10. What are Collateral Securities taken by the Housing Finance Companies?

HFCs usually take some additional securities which are called collateral securities. These may be in the form of guarantee from one or two persons, assignment of life insurance policies, deposit of shares, and units or other securities. These additional securities are taken with the hope that if a loan is not paid back recourse may be taken to such securities instead of depending upon the mortgage of the property which is the last resort. Guarantors, when alerted, become very effective persons in prevailing upon the borrowers to fulfil their obligations.

11. What is the range of interest rates offered?

The interest rates may vary from institutions to institutions and generally range from about 12.5% to around 16%.

12. How is the interest calculated on my loan?

Most HFCs follow the yearly reducing-balance method, which accounts for your principal repayments only at the end of their financial year. Thus, you pay interest on the principal that you have already returned to the HFC. The effective interest rate is thus higher than the quoted interest rate by around 0.7%. Banks and some HFCs, in contrast, follow the daily or monthly reducing-balance method, which results in a lower interest burden.

13. What is the basis of interest rates calculation?

The interest on home loans in India is usually calculated either on monthly reducing or yearly reducing balance. Monthly reducing : In this system the principal on which you pay interest reduces every month as you pay your EMI. Annual Reducing : In this system the principal is reduced at the end of the year, thus you continue to pay interest on a certain portion of the principal which you have actually paid back to the lender. Which means the EMI for the monthly reducing system is effectively lesser than the second system of calculating interest.

14. What is the fixed rate of interest?

Some HFC's have fixed rate of interest which means that the interest rates remain unchanged for the entire duration the loan. This basically means that you do not benefit, even if the rates of interest drop in the market.

15.What is a floating rate of interest?

This is the rate of interest that fluctuates according to the market lending rate.

16. What are the fees and charges payable and when are they payable?

Home loans are usually accompanied by the following extra costs:a) Interest Tax : is the tax payable on the interest paid on a home loan and not the principal. This tax is some times included in the interest rate of the loan, or may be charged separately as interest tax. b) Processing Charge : It's a fee payable to the lender on applying for a loan. It is either a fixed amount not linked to the loan or may also be a percentage of the loan amount. The loan amount received by you can be less than the processing fee. c) Prepayment Penalties: when a loan is paid back before the end of the agreed duration a penalty is charged by some banks/companies, which is usually between 1% and 2% of the amount being pre paid. d) Commitment Fees: Some institutions levy a commitment fee in case the loan is not availed of within a stipulated period of time after it is processed and sanctioned. e) Miscellaneous costs: It is quite possible that some lenders may levy a documentation or consultant charges. f) Registration of mortgage deed.

17. What security do I have to provide for the loan I want to take?

Security for the loan is a first mortgage of the property to be financed, normally by way of deposit of title deeds. The title should be clear and marketable. Some HFCs may also require collateral security like the assignment of life insurance policies, pledge of shares, NSCs, units of mutual funds, bank deposits or other investments

18.What are the documents required at the time of application?

The common documents that the financiers require at the pre-approval stage are: Proof of Age Copy of Bank A/C statements for the last 6 months Copy of latest credit card statement Passport size photograph Signature verification from your banker If you are salaried, you need to produce:Salary and TDS certificate Latest pay slip Letter from employerIf you are self-employed you require:Your business track record Copy of audited financial statements for the last 2 years At the disbursal stage (for property already located), you need to submit:Allotment letters Photocopies of title deedsAgreement to sell Encumbrance certificateFor self-construction:Approved plans and clearance certificates along with estimates

19.What are the tax benefits available?

Tax benefits available are as under : (a) Exemption under Sec 88 of IT Act (Rebate) for repayment of principal upto Rs.10,000/-. (b) Deduction under Sec 24 of IT Act for interest payment on housing loans upto Rs. 75,000/- (in respect of self-occupied house property acquired or constructed with capital borrowed on or after 1.4.99, and acquisition or construction whereof is completed before 1.4.2001. Tax benefits vary in case of rental.

20. Who can be a Co-Applicant?

A. Co-Applicants are the Co-Owners of the property in respect of whom the financial assistance has been sought. Usually joint applications are from : husband-wife, father-son or mother-son.

21. What is the EMI?

EMI or Equated Monthly Installments, refers to the fixed sum of money that you will be paying to the housing finance company every month. The EMI comprises both interest and principal repayment. The size of the EMI depends on the quantum of loan, interest rate applicable and the term of the loan.

22. Can I repay my loan ahead of schedule?

Yes, you can pay your loan ahead of schedule. However, it must be noted that housing finance companies charge a fee for early redemption of loan. This fee can vary between 1-2% of the loan amount being prepaid.

23. Does the property have to be insured?

You will have to ensure that the property is duly and properly insured for fire and other appropriate hazards, as required by the HFC during the period of the loan and will have to produce evidence each year and/or whenever required by the HFC. The HFC will be the beneficiary of the insurance policy. This is an added cost that will add to the final cost of purchase of the property.

24. What is the difference between a Monthly Reducing EMI and a Yearly Reducing EMI

Yearly Reducing EMI-In this system of calculating EMI the principle is reduced at the end of the year,thus you continue to pay interest on a certain p ortion of the principle which you have actually paid back to the lender Thus the EMI for the monthly reducing system is effectively lesser than the Yearly reducing system of calculating the Interest.

source: http://in.loans.yahoo.com/homefaq.html#1

Wednesday, July 26, 2006

Reverse repo rate hiked 25 bps

RBI repo rate

Reverse repo rate hiked 25 bps; India Inc says expansion plans may take a knock.

The cost of money for India Inc as well as the retail consumer is set to go up by a quarter to half a percentage point, with the Reserve Bank of India raising the key short-term reverse repo rate by 25 basis points today.

The reverse repo rate has now moved up to a four-year high of 6 per cent. Presenting the quarterly review of monetary policy, RBI Governor YV Reddy said the "modest pre-emptive action" had been taken to marry growth with stability.

Reddy has left GDP growth forecast unchanged at 7.5-8 per cent for 2006-07 and inflation rate projection at 5-5.5 per cent.

This is the sixth 25 basis point hike since the rate hardening cycle began in October 2004 and the third hike since the beginning of 2006. However, the cycle of rising rates seems not to be over yet.

"On balance, a modest pre-emptive action in monetary policy is appropriate at this juncture while being ready to respond flexibly and promptly by closely monitoring the related developments," Reddy said.

Bankers maintain that the RBI may keep the rates unchanged at its mid-term review on October 31 but may hike them again in January 2007.

It is a matter of time before banks across the board hike their lending rates. The asset-liability committees of almost all banks will meet over the next few days to take a call on the quantum of hike — between quarter and half percentage points.

However, the bond market gave a thumbs up to the RBI decision as it lifted the uncertainty surrounding the market. The benchmark 10-year gilt yield rose marginally to 8.28 per cent after the rate hike but closed the day at 8.22 per cent against yesterday's closing of 8.21 per cent.

"The market has already priced in the hike," said Nitin Jain, head of fixed income securities at I-Sec, a primary dealer.

Bank stocks cheered the RBI move. The BSE banking index — Bankex — was the largest gainer among the sectoral indices today, rising 4 per cent against the 2 per cent rise in the Sensex.

The Bankex was up by 181 points to close at 4,569.30 today even as the Sensex rose 200 points to close at 10,415. However, the primary reason behind the rise was the RBI's weekend decision to allow banks to raise hybrid capital overseas, analysts said.


Housing Development Finance Corporation (HDFC) Chairman Deepak Parekh said the largest mortgage company in the country might hike its home loan rate now by at least a quarter percentage point.

ICICI Bank, however, would wait a while before raising rates as any rate hike could impact consumer demand, said its retail banking head K Vaidyanathan. It has already hiked its home loan rate thrice in 2006. Its floating rate loans are available at 9.5 per cent while fixed loans cost 10.75 per cent. LIC Housing Finance, too, is bracing for a rate hike.

"We have little choice other than hiking home loan rates," its CEO S K Mitter said.

India Inc is not happy with the rate hike as it will impact corporate expansion plans. A cross-section of senior executives in different sectors said this would slow investment programmes.

Siddhartha Roy, economic advisor with the Tata Group, said it would raise the cost of capital and thereby adversely impact margins of the corporate sector, especially small and mid-size companies. This, in turn, would adversely affect the ability of the companies to invest.

According to him, new projects would be worst hit by the rate hike. "Companies can't stop implementation of a project half-way because of the rate hike. But they will think twice before kicking off new projects," he pointed out.

Wednesday, July 12, 2006

ICICI Venture In Hyderabad


ICICI and TSI Ventures to develop IT tower in Hyderabad



TSI ventures (India) Pvt ltd., a joint venture of American Property developer. Hyderabad based Aurobindo Pharma Ltd., has acquired a US FDA cinaokuab CGMP (Current good manufacturing practices) facility in Dayton, New Jersey. Spread over 20 acres and located in Princeton Life Sciences Corridor in New Jersey, the facitlity will serve as Aurobidos US head quarters


Tishman Speyer, and ICICI Ventures, is planning to develop a 20-storied IT tower at a cost of Rs.225 crore in Hyderabad. The project will be completed within two years according to K. Ratna Prabha, Secretary , IT & Communication department.

The state cabinet which met here, approved a proposal to allot 12-acre land at the software units layout developed by the Andhra Pradaesh Industrial Infrastructure Corporation(APIIC) IN Nanakramguda here. The company is aquiring the land at Rs.4.27 crore and acre from APIIC.

Source: icici venture

Wednesday, July 05, 2006

Reliance Industries to enter retail trade

India's retail industry accounts for 10 percent of its GDP and 8 percent of the employment to reach $17 billion by 2010.




Reliance Industries 25 thousand crores investment will be used to open stores in 1,500 towns and cities. The network of supermarkets, hypermarkets and neighborhood convenience stores will sell everything from food and clothes to consumer durables. They are creating 10 lakh jobs through this retial market.

The company says its will hire half a million people to staff the stores in the coming years. The first shop will open at hyderabad before august 15th .

proposel shops


Vanasthalipuram
Banjara Hills Road No.11
Kharkhana
Kukutpally
Santhnagar
Taranak
BHEL
Himayatnagar
Boweinapally

They have plan to open counters before August 15th.




Tuesday, July 04, 2006

Residential Property Maintenance







a.We will look after and keep your property in good order at any time. This also includes

b.Full organisation of paperwork.

c.Permanent communication with you (the property owner) at all time.

d.Visiting of the property once on every two weeks to make sure that everything is fine.

e.Representing you (the property owner) before third party service providers (inclusive electricity and water supply companies, electronic security companies, etc.).

f.Our local team will also pay the utility bills and annual local tax on your behalf.

g. If any repairs are needed we can arrange for a qualified technical person to visit the place and fix the problem.

Saturday, July 01, 2006

GTGRI - Hyderabad Real Estate

Introduction:


This Service's main motto is to help customers in getting a clear title for the properties they are buying and to help them in getting a property, which gives us Guaranteed Growth.

It is Simple & Safe.

Buy a Property through this service. You are assured for Clear Title.
We Offer Buy back Guarantee for double amount for the plots/lands.
All we charge is 5% Service Charge for this Service.
No Hidden Rules.

Procedure:

To initiate the process, You need to pay 2,000 INR or 50 US $ towards this service and same will be deducted while paying 5% service Charges.




STEP 1

Imagine you are purchasing a property worth 5 Lakhs through us


You can choose any property on this portal with GTGRI Offer

Write to us about the property of your interest for Current Pricing information.

if you are looking for un-listed Property, you can write to us along with Area of your interest



STEP 2

Property will be registered on your name


You will get Property with Clear Title, as we use our expertise in analyzing Property documents. Property will be registered on your name.


STEP 3


You will get "Certificate of Guarantee" from Cherukuri Group for Buy Back Guarantee for Double amount after 70 months from the date of Purchase



STEP 4


After 70 months, You can sell that property to Cherukuri Group for 10 Lakhs. If Market rate is higher than that, you can buy OR hold as per your wish


Your investment is safe and it is on your name. You are getting a clear title and Buy Back Guarantee for your investment.

















































Wednesday, June 28, 2006

cherukurijanmabhoomi - hyderabad real estate



Cherukuri Group is an embodiment of Diversified businesses based on moral, ethical and high valued principles with various socio-economic and business activities under the committed, honest, modest and trustworthy leadership of the great philanthropist, able administrator and disciplined, devotional personality Shri Cherukuri Rama Rao.


Under his able mentoring, Cherukuri Group has evolved a way of work that gives a new perspective to Business. Under his Guidance the group has defined management in a novel way, which gives a new meaning to business relationship, where any business relationship is first a human relation.


Ever serving the community by strictly ship adhering to guiding principles like Commitment to Quality, Customer Orientation, Dedication, Discipline, Honesty & Integrity, Openness & Transparency, Respect, and Care & Concern for People and Teamwork and under the able leadership of Shri. Cherukuri Rama Rao, Cherukuri Group has expanded into a conglomerate of businesses with a Customer base of 0.75lakhs with Assets worth over 7500 lakhs and a Network of 55 branches, supported by a dedicated workforce of 450 employees. The groups Turnover is 100 crores. Cherukuri group has been successful in providing seamless service for the people of Andhra Pradesh for more than 10 years and could amass the trust of over 0.25 lakh investors.
Cherukuri Group started its financial services at Vanasthalipuram with modest beginning on 26th January 1994 under the Chairmanship of Sri Ch. Rama Rao, a retired Officer of State Bank of India with 22 years of experience in banking. A true follower of Gandhian principles of simple living-high thinking, service to humanity is service to God, Honesty is the best policy and truth always triumphs.


Cherukuri Group although started its first activities and operations on 26th January 1994 many changes have taken place over the years. The Group diversified itself into various activities thereby forming number of companies and concerns.


The registration for that Parent Company was done on 25th January 1994 in the name of Cherukuri Finance and Chit Fund Private Limited . Smt. Cherukuri Vijayalaxmi Madam was appointed as Managing Director of the company and Sri Cherukuri Gopinath was appointed as director. The next day being the most important day, the Republic Day of India, and as well as the birthday of Smt. Vijayalaxmi Madam, wife of Sri Cherukuri Rama Rao, [presently the Chairman and Managing Director of Cherukuri Group, and whose brainchild was this Cherukuri group as on that day], the said company had been launched on 26-01-1994.


The intention of the founder provides proper banking and financial service to the general public with the quality, which was not forthcoming from the scheduled banks. General public were put to many hardships even for simple thing like opening Saving Deposit or Recurring Deposit accounts. He wanted to get rid of all these beaurocratic, redtapism, and offer good services.
In due course, it was deemed fit to convert the private limited into limited company. So that it could absorb more shareholders as directors of the company. It would unable the company to enhance its share capital. That was the intention when Cherukuri Finance and Chit Fund Private Limited was converted as Cherukuri Finance and Chit Fund Limited with effect from 17.01.1995.


After completing legal formalities, the name of the company was converted as Cherukuri Finance India Limited with effect from 02.03.1995. It was operating as a non-banking finance company. In those days non-banking finance companies had many restrictions, regulations imposed on them, by RBI.


The benefit fund business was started in June 1996 by opening its first branch at Vanasthalipuram. The branch was provided with a strong room, along with a door, lockers, cash counter etc. Since the promoter had banking service of 22 years as his background, the branch at Vanasthalipuram was conducted as a banking branch. It was a unique concept. Activities like SD/RD and lockers, Gold loans, Title deed loans etc., were carried on in the branch. The first branch was as such started under this concept. The date of opening of this Vanasthalipuram branch was 12.05.1996. Four such branches were newly opened under this concept of benefit fund limited.


Subsequently Cherukuri opened 3 more branches in this concept at Santhoshnagar, Dilsukhnagar and Rajahmundry.
After tasting the pros and cons of this business, Cherukuri soon formed a society called Cherukuri Mutual Aided Co-operative Credit Society (CMACCS). It took place on 20-05-1998. We started expanding our branch base. We didn’t look back. We opened 51 branches under this concept.


The branches opened earlier and operating under earlier concepts were all converted into this concept. But at the same time they continued doing business under earlier concept in addition to society concept. As such Vanasthalipuram branch had the record of running its business under all the three concepts, and also simultaneously. That was how Cherukuri continued, conducted successfully its business activities, thriving on trusted goodwill reposed in itself by its depositors, customers. Cherukuri continued doing Justice to its depositors. It never failed in meeting the aspirations of the general public.


The company ventured into various commercial activities, widely spreading itself into diversified business establishments. It was with this intention; Cherukuri Swarnanjali Jewellers has formed in 1998. The same year Cherukuri Real Estates & Constructions started investing the funds in real estate plots and sites, construction activity. This was done in accordance with the changed strategy of Cherukuri concern, investing the depositors money in Gold Business, and Real Estate Business. The Cherukuri as such guaranteed the safety of the customer/depositors money, and thus consolidated its position.


The company also intended to venture into education/academic field. It registered Cherukuri Education Society, Korukonda on 27-12-2000. The intention was to open and run a primary school. The school started functioning from the academic year 2001-02 with strength of 80 members of students only. As on today the strength of the students expanded to above 200 members. It is steadily progressing well, achieving district level records. Cherukuri entered into advertising field also. It all happened with the sole intention of utilizing funds of the company for its business activities, and stop advancing loans to outsiders. This was the most significant decision taken and implemented by Cherukuri in order to avoid the risk of non-recovery of bad debts.