Currently, stable property prices and low interest rates seem attractive, there are indeed some advantages of buying a new home. Even with the fallen incomes, if the right measures are followed, one can definitely get benefitted by investing in a new home.

But what does really make sense? Renting vs. Buying a house? 

You will know with this article…

The COVID-19 pandemic has constrained people to rethink buying a new home. This thought still prevails despite conditions that are in favor of homebuyers.

Currently, stable property prices, attractive schemes from developers, and record low interest rates are making people think of buying a new house. But, the choice to buy a house needs cautious thought, particularly when pay levels are falling, property costs are expected to stay humble and rental yields are on a decline. 

People need to understand that in the pandemic-led slowdown, it is important to hold on to liquidity and invest sensibly.

But, should I buy or rent a house?

For the people who have their jobs and pay levels intact, and who have been hoping to buy their own house for a long time, it is indeed a good time to purchase a home. 

If the price structure for the homes in the course of the last 4-5 years favors your choice, there are sufficient ready-to-move homes in the market. And the fact that buyers may hold the negotiating power in this market just makes it more tempting.

Well, it’s an ideal time for those who have been looking to buy a home for a long time. For the first time ever in the last 15 years, the real estate market has turned into a buyers’ favor. 

For the people with a few or more financial crises, they need to hold a choice to buy a home until they see an adjustment in their incomes.

With the economy under heavy stress, developing joblessness, and outward movement from urban areas, the rental rates, and property costs may continue to stay under tension.

Even if you can buy the house, thoughtful consideration is essential.

Here are some major benefits of buying a home right now…

• Low interest rates

This year, we saw the lowest repo rate. The move from the Reserve Bank of India made homebuyers to think strongly about the new home purchase as interest rates were brought down.

• Attractive schemes for homebuyers

In order to move fast, most real estate developers are bringing attractive offers on available inventory. Sales need to start again and hence, profitable payment plans, schemes, and discounts are being offered on flats and apartments. If you check around, many developers are also offering refundable booking amounts, cashback offers, free cancellation to help homebuyers. So, this could be a great time to strike a deal for a new home if you are willing to discuss it.

• Possible price rise in the future

As we mentioned earlier, property prices are stable right now. The slowdown caused by the COVID-19-led lockdown brought the real estate industry to pause. With everything reopening gradually, there can be an upward shift in property prices. So, if you invest right now, you can be lucky enough to reap the benefits of appreciated property prices in near future.

It is critical to take note that while those paying home loan EMI can guarantee an allowance of up to Rs. 2 lakh on the interest components of the home loan in a year.

For those who want to know the benefits of buying a property right now, you can read our article on the things you should know before buying a home in a pandemic.

Ideally, the COVID-19 pandemic is a once in a blue moon event and the benefits it brings for homebuyers are amazing. 

For some, renting might be a good decision, but buying a home right now will bring you more benefits in the future.

Home and hearth should be secured while chances are in one’s favor.

Advance payment is one of the crucial things a homebuyer comes across while striking a deal for a real estate property. Advance payment for the purchase of flat safeguards buyers’ interests.

The property comes with many other supplementary costs such as costs incurred towards legally transferring the asset to the name. A real estate developer may ask the buyer for advance payment in various forms.

So, what if a real estate developer asks the buyer for advance payment and what a buyer should know about such situations?

We are discussing these things through this article.

Kasturi Housing always safeguards the interests of a buyer and maintains complete visibility with property dealings.

Booking amount or token money

Many developers sometimes avoid discussing the terms of conditions of the property transaction unless they are aware of the genuine interest of the buyer. To make sure the buyer has serious intentions towards the property purchase, many times, sellers may ask for: 

• Goodwill deposit
• Booking amount
• Token money
• Bayana
• Earnest deposit. 

This is asked way before the actual deal is discussed.

All the above terms mean the same; advance payment. A buyer has to pay a certain amount to validate the intention to make the purchase. Typically, a seller may ask for an amount ranging from Rs. 50,000 to Rs. 1 lakh as a token amount.

Stamp Duty

Abided by law, a buyer has to pay the stamp duty while buying the property. But, one should not hurry while doing so. There can be a situation where you are not interested in a certain property, or even a seller backs out. In these cases, all your investment in stamp papers could go in vain. These legal documents are non-transferable and non-refundable. So, make a decision carefully.

Advance TDS payment

Since June 2013, the law states that a sale of property worth more than Rs. 50 lakhs in India, a tax of 1% has to be deducted on the total sale consideration before a buyer pays to the seller. 

The buyer has to deposit this 1% TDS to the Government along with the PAN of both the buyer and seller while submitting the Form 26QB. This ensures that the seller doesn’t avoid taxes on capital gains. This TDS on advance payment is a common thing these days but you should be consulting your financial advisor before making any payment.

Home loan advance payment

Attention pre-owned property buyers! Home loan advance payment could be risky.

An event could occur when the seller of the residential property has an ongoing home loan on the property, they would ask the new buyer to make advance payments, which could complete the sale with necessary documents required.

Here, the lender has to furnish a No Objection Certificate i.e. NOC saying the loan has been repaid and no pending charges are due on the property. It sounds so simple, but buyers should refrain from making such payments.

Some frequently asked questions

1. What is token money?

While purchasing the property, the token amount is paid when the buyer and seller are on a verbal agreement and want to move forward with the deal.

2. How much money should be paid as a token?

There are no firm rules about how much money should be paid as a token amount.

3. Can I buy the property with a running loan?

The property can be sold only after the existing owner repays the loan amount in full.

Want to know more about property deals and how to safeguard your intentions to buy a property?

• Home loans are at the lowest rates ever.
• This is the right time one needs to take advantage of a home loan interest rate reduction.

So, here’s everything you need to know about home loan benefits at lowered interest rates.

Everything around us is gradually opening up and we all are trying to get back to normal with necessary precautions. The Coronavirus led pandemic made Indian financial institutes to lower their home loan interest rates of record-breaking 15 years!

At a time when the economy is still trying to hit the mark and homebuyers are prioritizing job security, finance institutes in India – both public and private are worried about the consumer sentiments.

Both the attractive home loan interest rate reduction and stable property prices are attracting buyers to invest in properties, especially luxury homes (as investments).

Although everyone is discussing record low-interest rates, a new homebuyer needs to know the aspects of getting the most out of low home loan interest rates and thus we have tried to talk about these aspects with this article.

Are lower home loan interest rates available for all homebuyers?

Slashed home loan interest rates are introduced for new customers. In simple words, they are trying to sell a new product to new and fresh customers when there is stiff competition. This doesn’t mean that current customers of the banks cannot be benefitted from the new and lowered interest rates. Existing customers can easily avail of home loan benefits with low-interest rates too but there is a slightly different way for them.