Property developers see an upswing in demand for houses as home loan rates are expected to come down after the Reserve Bank cut repo rate today by 100 basis points.

"The cut in repo rate should reflect in lowering of home loan rates. People should be able to buy homes at a cheaper rate, only then we can sell more homes," said Rajeev Talwar, group executive director of DLF.

Added Sanjay Chandra, managing director of Unitech, "Repo rate will make bankers revise mortgage rates, which will improve affordability of houses and boost home sales," Chandra said.

Over the last nine months, RBI has raised the repo rate by 125 basis points to tame the rising inflation. In turn, commercial banks have raised their consumer loan rates by 50-100 basis points. Thus, on an average, the monthly installment on a Rs 10 lakh loan for 20 yrs has risen over 50 per cent to Rs.12,740 on a 14.25 per cent interest rate from Rs 8,060 (7.5 per cent interest rate) five yrs ago.

Due to high interest rates, property sales have halved from the beginning of the current yr, blocking the source of funds for developers.

Rohtas Goel, CMD, Omaxe, said he expects home loan interest rates to fall. "The cut will make funds cheaper for banks which may in turn decrease the interest rates. "he said.

                                                                                                Courtesy:- BS - 21st Oct. 2008

ALTHOUGH BANKS HAVE CHOSEN TO LAUNCH OFFERS IN THE FESTIVAL SEASON, EXPERTS FEEL SLUGGISH LOAN GROWTH HAS PROMPTED THEM TO GO THE EXTRA MILE

Prospective home loan borrowers have something to cheer about in this festive season. Housing finance players are out to woo them by lowering lending rates. They have all geared up to cash the increased flow of money in people’s pockets in the next two months or so.

Housing Development Finance Corporation (HDFC) has lowered its floating interest rates on new home loans by 0.75 percentage points to 10.50% for a limited period. State Bank of India (SBI), too, announced similar concessions for fresh home loan borrowers in Kolkata. SBI is offering the scheme only at its home mela held in Kolkata.

The country’s largest bank is offering 10.50% interest for loans above Rs 5 lakh in case of approved housing projects. In all other cases, the bank will charge 10.75% from borrowers in Kolkata. These rates are available for loans beyond a five-year term.

The latest in the bandwagon is Allahabad Bank. The Kolkata-based bank has reduced interest rates on fresh housing loans by 0.50-0.75 percentage points for the next three months starting from October 1. For loans below Rs 20 lakh, Allahabad Bank will charge a 9.75% rate for maturity up to five years, 10.25% for maturity above five years and up to 10 years, 10.50% for maturity above 10 years up to 15 years and 11% for maturity above 15 years and up to 25 years.

The reduction in interest rates for fresh borrowers, however, does not apply to existing floating rate home loan customers.

Incidentally, Bank of Baroda (BoB) lowered its rates in the first week of September itself, well before the onset of the festive season. It cut rates by up to 0.50 percentage points. Union Bank of India has recently reduced the rate by 0.25 percentage points across all maturity buckets. Both BoB and Union Bank have reduced their rates for an unspecified period.

A senior official with SBI said the move to lower home loan rates is to target the large pool of middle-class borrowers. “The lowering of rates would lure fresh borrowers when they have additional flow of cash in hand,” he said.

Although banks and other housing finance players have chosen the festive season to push their home loan products, industry observers say that the sluggish home loan growth since April has prompted them to go the extra mile to mobilise new home loan customers. The banks’ home loan books have grown less than 5%, as opposed to 25-30% growth seen in the last few years.

Interestingly, ICICI Bank has so far kept its home loan rates unchanged. The country’s largest housing finance company HDFC, announced the `special’ 10.50% rate for new customers willing to avail of home loans at the floating rate of interest. The offer is valid for all loans disbursed on or before October 31, 2007.

NEW OFFERS

• HDFC has lowered floating interest rates on new home loans by 0.75 percentage points to 10.50% for a limited period
• State Bank of India, too, announced similar concessions for fresh home loan borrowers in Kolkata
• Allahabad Bank has reduced interest rates on fresh housing loans by 0.50-0.75 percentage points for the next three months starting from October 1
• Bank of Baroda lowered its rates in the first week of September itself, well before the onset of the festive season
• Union Bank of India has recently reduced the rate by 0.25 percentage points across all maturity buckets. Both BoB & Union Bank have reduced rates for unspecified period
• The banks’ home loan books have grown less than 5%, as opposed to 25-30% growth seen in the last few years
• ICICI Bank has so far kept its home loan rates unchanged

SAFEGUARD YOUR HOME

ET Realty offers some advice on what you should not do while renovating your house

A doctor always advises ' prevention is better than cure', it is the same for the safety of the structure of your own house.

Even though, undoubtedly, there are many solutions and remedies to repair a damaged structure, we must understand the importance of respecting the existing structure, nurturing it and maintaining it for the safe and happy use of your own space. Generally RCC structures do not collapse like a pack of cards because they are designed for minimum one and half times prescribed and allowable loads. Here are some minimum ' don'ts ' of certain critical elements of structures in interiors which must be adhered to while carrying out any interior renovations:

RCC Works:
Reinforced cement concrete beams and columns are the most common structural membrane of any building. Do not ever chase concrete or cut the steel - leave aside removing or reducing the size of these membranes.

Why? All RCC membranes are designed with concrete cover to protect steel. While chasing it is likely to damage the cover over reinforcement, which may result into corrosion of bars and slowly develop cracks and weaken the structure.

Balconies:
Do not use enclosed balconies for kitchen, toilets, heavy storage, etc. Why? While balconies are permitted to be enclosed by BMC for habitable purposes, as per regulations they ought to be overhung or cantilevered. Adding additional load certainly adds stress to existing structural framework.

Toilets and Kitchen:
Avoid changing the location of toilets and kitchen. Why? All toilets and kitchens have common drainage and supply lines. These areas are also specifically waterproofed and likely to be overtly used. Any change in location damages the waterproofing and dampness or leakage within RCC membrane certainly corrodes the steel and weakens the concrete.

Chajjas and Planters:
Do not extend your interior space over planters and chajjas.

Why? Chajjas are designed to protect doors and windows from weather and planters are a so-called façade feature allowed by BMC. These are again cantilevered structures with no provisions of additional dead or live loads. Any stress on these cantilevered portions directly impacts the dynamics of surrounding beams and columns.

Pipe Shafts:
Do not extend your interior space and enclose any pipe shafts.

Why? Pipe shafts are meant to hide pipes and other utilities commonly laid in the building. It is illegal to enclose these common spaces. While BMC does not have any regulation on size and shape of these shafts and they are hollow, however, in recent times it is observed that it is tempting to enclose these shafts to enhance the size of your bathroom, kitchen, etc. where there is no structural provision.

Plinth:
Do not lower the existing plinth level.

Why? By lowering the plinth level, you may gain extra height but it is likely to damage plinth or tie beams, top of footings, and so on, which are at the very base of any structure. Lowering of the plinth also endangers water ingress into your building.

Concealed electric, plumbing and AC works:
Do not chase or cut a hole in any structural membrane to conceal electrical, plumbing or any utility services.

Why? For the same reasons as mentioned in the first item.

These are just few basics and most common abuses to RCC structures, which are observed in many buildings in our city.

Always use the best material you can afford.

Follow good building practice and insist on best workmanship and craftsmanship.

You must appoint a qualified interior designer or Architect and if in doubt, obtain additional advice from a structural consultant for major civil alterations.

Lastly, be vigilant to the smallest of cracks in the structure and attend to it urgently.

                                                                                                           Courtesy: ET dtd: August 10, 2007

FLOATING HOME LOAN: CHECK THE BENCHMARK RATE & RESET CLAUSE

1. If constructing on own land .
2. If the property is being purchased is in Cooperative Society
3. If a flat is purchased from the builder
4. Self-Employed/Businessmen
5. Salaried Individuals

1. Salary slip/Form 16 A.
2. A photocopy of the first and last pages of Ration card or copy of PAN/Telephone/Electricity bills.
3. A photocopy of Investments (FD Certificates, Shares, any fixed asset etc. or any other documents supporting the financial background of the borrower.
4. A photocopy of LIC policies with the latest premium payment receipts (if any).
5. Photographs (as applicable).
6. A photocopy of bank statement for the last six months.

Self-Employed/Businessmen

1. A brief introduction of Business/Profession.
2. Balance Sheet, Profit and Loss account and statement of income with Income Tax returns for the last 3 years certified by a CA.
3. A photocopy of Advance Tax payments (if applicable).
4. A photocopy of Registration Certificate of estatblishment under shops and Establishments Act/Factories Act.
5. A photocopy of Registration Certificate for deduction of Profession Tax (if applicable).
6. Bank statements of Current and Saving accounts for the last 6 months.
7. A photocopy of Certificate of Practice(if applicable).
8. A photocopy of any bank loan (if applicable).
9. A photocopy of the first and last pages of the Ration card or a copy of PAN/Telephone/Electricity Bills.
10. A photocopy of LIC policy (if applicable).
11. A photocopy of investments (FD Certificates, Shares, any other fixed asset).

For a builder Flat

1. Original copy of your agreement with the builder.
2. 7/12 extract or property register card of the land under construction.
3. Index II extract of your agreement with the builder.
4. Copy of N.A. permission for the land from the collector.
5. Search and title report (with the details of documents) for the last 30 years.
6. Development agreement between the owner of land and the builder.
7. Copy of order under the Urban land Ceiling Act.
8. Copy of building plans sanctioned by the competent authority.
9. Commencement certificate granted by Corporation / Nagar Palika.
10. Building completion certificate(if available).
11. The latest receipts of taxes paid.
12. Partnership deed or memorandum of association of the builders firm.

For a Cooperative Society Flat

1. Original share certificate of the Society.
2. Allotment letter from the society in your name.
3. Copy of the lease deed, if executed .
4. Certificate of the registration of the society.
5. Copy of the byelaws of the society.
6. No objection certificate from the society.
7. 7/12 extract or property register card in the society's name.
8. Copy of N.A permission for the land from the collector.
9. Search and title report(with the details of documents) for the last 30 years.
10. Copy of order under the Urban Land ceiling Act.
11. Copy of the building plans sanctioned by the competent authority.
12. Commencement certificate granted by Corporation / Nagar Palika.
13. The latest receipts of taxes paid.
14. Original Agreement to assign / Deed of assignment.

For a Flat Constructed on own Land

1. Original sale deed of land and extract of Index II.
2. Extract or property register card in his name.
3. Copy of N.A. permission for land from the collector.
4. Search and title report (with the details of documents) for the last 10 years.
5. Copy of order under Urban Land Ceiling Act.
6. Copy of the building plans sanctioned by the competent authority.
7. Building permission granted by Corporation / Nagar Palika.
8. The latest receipts of taxes paid.
9. Estimate of cost of construction certified by the architect.