The Home Loan is considered to be a ticket to owning your dream home. The high costs of acquisition has necessitated the need to resort to Home Loans to finance your home purchase. A Home Loan is not an over-the-counter product. It takes time to process your Home Loan application. As a necessary precondition, you need to meet eligibility criteria and submit the required documents.
The economically strong have always found it easy to finance their home purchase through Home Loans. The demonetisation move has tightened their purse strings; they still are better placed to obtain cheaper loans based on their credit scores. If you’re a part of this category, improve credit score to get a Home Loan at cheaper rates.
New times, New Scheme
To make urban living affordable for the EWS (Economically Weaker Sections), a new scheme has been announced that offers interest subvention.
Post demonetisation, a notable move by our Prime Minister is the PMAY, or the Prime Minister’s Awas Yojana scheme. It aims to provide affordable housing to the urban middle class. Real estate prices in urban areas have surged to such an extent that owning a home is still an unfulfilled dream for most.
Under this scheme, Home Loans are offered at low interest rates with a relaxation in the eligibility criteria, making it possible for the not-so-well-off to fulfil their ambition of owning a home.
The objective of this scheme is to provide financial assistance in the form of a Home Purchase Loan or a Home Construction Loan for the economically weaker segment.
This scheme, with the goal to provide Housing For All by 2022 has outlined the parameters on which the eligibility criteria is based for the EWS and LIG categories of borrowers.
- Annual Income Criteria
Upto Rs.3 lakh for EWS, and Rs.3 lakh to Rs.6 lakh for LIG.
- Family Composition
The family claiming benefits under this scheme should comprise of a husband, a wife, and unmarried children.
- No Other Ownership
In order to avail a Home Loan and an interest subsidy, both the beneficiary and members of their family shouldn’t own a pucca house.
The property that you choose to buy/construct should be located in any of the 4041 statutory towns specified in the scheme.
Quantum of Home Loan and Interest Subsidy
Under the affordable housing scheme, Home Loans upto Rs.9 lakh will have an interest rebate of 4%, while loans upto Rs.12 lakh will enjoy a 3% rebate. This will be limited to the first Rs.6 lakh alone.
Documents Required for Home Loan
Unlike the extensive documentation that is required for regular Home Loan, as an individual loan applicant under this scheme, you will only need to furnish a self-attested certificate as proof of income.
The beneficiary’s Aadhar and voter identification will serve as the link to lending institutions.
Demonetisation has ushered in drastic changes in the Home Loan segment. With banks and financial institutions flush with funds, Home Loan interest rates have hit a new low since 2008. Currently, you can get a Home Loan for as low as 8.5%. This has enticed people to buy homes than choose the rental option as the EMI cheques are lower that your monthly rentals.
With the government keen to provide an impetus to affordable housing, it’s a matter of time for every Indian to own a home, thus fulfilling the goal to ensure that each person has a home by the year 2022.