When people were celebrating the arrival of a new decade, they had no idea what 2020 had in store for them. Just a few weeks later, millions were confined to their homes by a global pandemic.
The pandemic has disrupted almost every industry, including the banking and financial sectors. It is true that taking decisions in these times is difficult considering the confusion about ‘what lies ahead’.
But even in this turmoil, people living on rent currently are thinking about buying a home. The covid-19 crisis has indeed created a rift between landlords and tenants where unfortunately many tenants were asked to vacate their house. This has prompted people to consider buying their own home and look for easy and quick home loan options.
But the question is – is this the right time to take such a crucial step?
Well, the answer is, YES!
Let us look at the reasons why this may be a good time to apply for a home loan.
1. Stamp duty reduction by local government
Stamp duty is a transactional tax collected by the government of India on property purchases. Looking at the current situation,the Secretary for Housing and Urban Affairs has expressed his elation on stamp duty concession across the state of Maharashtra. He also advised other states to do the same in order to boost the demand for housing amidst the pandemic. The concession will be applicable to the registration of documents by 3 percent from September 1 to December 31st, 2020, and by 2 percent from January 1st, 2021 to March 2021. The concession in stamp duty will benefit the homebuyers to buy a home of their own.
2. RBI gives affordable housing, rural lending second boost
The central bank has offered Rs. 10,000 crore to the National Bank for Agriculture and Rural Development (Nabard) and the National Housing Bank (NHB) to boost rural lending and affordable housing.
The Reserve Bank of India has announced an additional liquidity facility by 5000 crores. Under this, mid-sized non-banking finance companies and micro-financial institutions, which extend small-sized loans to the poor, and housing finance companies focused on affordable lending are going to get liquidity assistance via Nabard and the NHB, respectively. These steps will help small businesses, MSMEs, lower-income groups to be benefited due to the increase of ways and means advances (WMA) limits.
3. Interest subsidy on home loans extended
The government has extended the credit-linked subsidy scheme (CLSS) for Middle Income Group (MIG) under the Pradhan Mantri Awas Yojna (PMAY) until March 2021. Under the scheme, middle-income homebuyers with an annual income of Rs 6-18 lakhs can avail the benefit of subsidized interest on their home loans.
4. Invest if you can
If you have an extra fund and little or no high-interest debt, and you need or raise your extra savings to finance long-term objectives such as retirement or buying a house 10 or 15 years down the road, don’t delay. It is certainly better to own your dream rather than holding on to cash and waiting for the best time.
5. Peace of mind of owning your own home
With your own home, you would not need to stress over insane requests of property managers or lease increments. You will actually want to live in your home with your terms and conditions. Additionally, paying EMI is path better than paying rent.
6. Its forced savings
A portion of your income each month will go to the principal of the loan. This shouldn’t be considered a cost but a savings plan. Think about it as paying yourself by building equity. This will be extremely useful when you are ready to retire.
With the above-mentioned reasons, it surely seems to be an ideal time to buy a new property. If you need any assistance in applying for a home loan, contact our team of experts today.