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Right on the money

Posted on Oct 13, 2016
Pune

Are planning to make prepayment of your home loan? Here are some tips.

Here are some simple ways to generate funds for a part prepayment on your home loan that will help you bring down the overall cost of the finance. You can either reduce the EMI or tenure of your loan. A part prepayment on a home loan helps in reducing the interest burden and thereby the overall cost of the property. The prepayment amount directly reduces the principal component of your home loan. Hence, even a small prepayment amount paid during the initial period of the home loan tenure makes a lot of difference in the total cost of the loan.

However, while planning a prepayment on your home loan, it is very important to ensure that there is no other instrument in the market that guarantees a higher rate of return than your home loan interest rate. If there is such an instrument, it will be better to invest your surplus funds in that instrument rather than in a part prepayment on your home loan.

In case you are planning to make a part prepayment, it is advisable to first discuss it with your bank. A bank does not charge a prepayment charge penalty if you make the prepayment from your own resources. However, some lenders impose a limit on the frequency as well as minimum maximum amount they allow as a prepayment. Usually, lenders accept a part prepayment once in a quarter and the minimum amount should be equal to one month's EMI. Some lenders limit the prepayment amount to a maximum of 25 percent of the home loan balance at the beginning of the financial year.

Generating funds from investment portfolio

An investment portfolio is a collection of multiple investment instruments. Every instrument is unique with respect to its connection with the market condition and therefore one invests in various investment instruments according to the needs of their life and allocates the funds accordingly. You can generate funds by booking profits or liquidating some of the underperforming investments to make a part prepayment on your home loan account.

Some common options in an investment portfolio:

Tax-savings instruments

Tax-saving instruments include various schemes and debt instruments such as provident fund, NSC, infrastructure bonds etc. Usually, the tax-saving instruments have a lock-in period of 3-5 years. You can use the maturity realisation of your tax-saving instruments to make a part prepayment in your home loan.

Small savings

It is not easy to have a chunk of surplus funds for a part prepayment when a home loan EMI is running. However, financial planners suggest you plan for some small savings regularly which can be accumulated and used to make a part prepayment once or twice a year.

Insurance instruments

The main purpose of an insurance policy is to provide life risk cover. These instruments are available in term plans, endowment plans as well as money back plans. Any periodic one-time fund received from insurance investments can be used for making a part prepayment on the home loan.

Debt instruments

The debt-based instruments include deposit schemes, debt mutual funds etc. The returns on a debt instrument are going down due to a reducing trend in interest rates. However, debt-based investments are needed to provide for in case of an emergency need. It is not advisable to reduce or use these contingency funds.

However, any extra funds beyond your target level from this kitty can be used to make a part prepayment on your home loan.

Equity-based instruments

Equity-based investments are direct investments in stocks or indirect investments by way of equity-based mutual funds. Usually, equity and equity based funds pay periodic dividends. You can also look at booking profits or part profits in funds or stocks that are performing well and exit from under-performing stocks or funds. These amounts can be pooled together to make a part prepayment.

Liquidating unused assets

You can dispose off your unused assets to accumulate smaller funds which can be used to make a part prepayment on your home loan. These unused assets can be unusable vehicles, appliances, jewellery etc.

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How startups are changing trends in commercial real estate

Posted on Jun 22, 2016
Umpteen start-ups are coming up in India each day, which is naturally the best time for real estate to rejoice. Be it big or small, most of the start-ups do look out for office spaces sooner or later. These emerging business enterprises have immense potential and who knows how big they can grow in next to no time. Who would have thought of Flipkart ...
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Mhada allots possession to 255 slum dwelers in their new flats in Dharavi

Posted on May 06, 2016
Maharashtra Housing and Area Development Board finally allots homes to the slum dwellers of Dharavi, who were eligible for the allotment of flats. Mhada was been allotted redevelopment of Dharavis Sector No. 5 and had to handover the flats to the eligible owners through lottery draw.On February 17, it allocated 266 through draw of lots. This was f ...
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Documents to be Checked before purchasing flat in Navi Mumbai

Posted on May 06, 2016
By Accommodation Times News ServicesCheck out before purchasing a flat in Navi MumbaiCase A:  Where the Party outrightly purchasesFlat /Home  from CIDCOAllotment Letter from CIDCONOC from CIDCO .Receipt of payments made to CIDCO.No Valuation Report required.No Title Clearance/Search Report neededCase B : Where CIDCO has given Land to indi ...
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Hike in property tax capped at 20%

Posted on May 06, 2016
BangaloreThe BBMP on April 28 partially rolled back the property tax hike it had effected, capping the increase at 20% for residential properties and 25% for non-residential properties.The civic body said it took the measure following revelations that the hike had, in some instances, touched 40% for residential buildings and 50% for commercial prop ...
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Anandiben Patel wants 300 “smart” villages to be developed in Gujarat

Posted on May 06, 2016
On 57th Foundation Day, Gujarat Chief Minister Anandiben Patel said her government has decided to make 300 villages across the state self-reliant on the lines of smart cities.“Now that the concept of Smart Cities has reached Smart Villages, the government decided to make 300 villages self-reliant, clean and hygienic during this year,” she said in a ...
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Ravi Group launches new project ‘Gaurav Excellency’

Posted on May 05, 2016
Real estate developer Ravi Group has announced the launch of its project ‘Gaurav Excellency at Mira road. The project is located at the accurate permutation of serenity and convenience, over a spread of approximately 25acres of land with 2acres of recreational land.It offers 1, 2 and 3 BHK apartments with high-end amenities like E-deck, jogging tr ...
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Unsold inventory in real estate increases by 31%: Report

Posted on May 05, 2016
As many as 84,915 flats find no takers in Greater Mumbai, while in MMR the figure is a whopping 2.26 lakhThere are around 2.26 lakh apartments in Mumbai Metropolitan Region and around 85,000 flats in the Greater Bombay that have remained unsold in 2015-16, said Mumbai-based property research firm Liases Foras.According to developers, the input cost ...
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5 things to keep in mind before buying a house in India

Posted on May 05, 2016
Be careful before you start feeling at home.Buying a home in India can be a daunting task. Right from the house searching process for finalising the house to finance and registering it, home purchasers might end up feeling exhausted.At times, a couple of properties grab your attention in the first look and you feel: Yes, this is home.You may get em ...
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Sales of affordable, small, homes thrive despite muted consumer sentiment

Posted on May 05, 2016
Mumbai: Apartments costing up to Rs.50 lakh saw brisk sales in the last financial year even as overall sales remained muted, real estate research firm Liases Foras said.In 2015-16, sales of so-called affordable houses priced below Rs.25 lakh rose 46% from a year ago in the top eight cities, including Mumbai, Delhi and Bengaluru, a Liases Foras repo ...
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40 cities to be ed in second round for smart city project

Posted on May 03, 2016
Forty cities will be selected for the second phase of the Smart City Mission, which is likely to be announced by June, told by Rajya Sabha.The first batch of 20 cities, including Bhubaneshwar, Pune, Ahmedabad, Chennai, Bhopal and NDMC area of Delhi, were selected for Narendra Modi governments flagship smart city project in January.“It is expected ...
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PNB Housing launches 'Unnati' loan scheme for low income group

Posted on May 03, 2016
In a bid to target the customers from middle and lower income strata, housing finance major PNB Housing today launched a scheme, 'Unnati Home Loans'.The scheme would enable the customers realize their dream of owning a home at affordable Equated Monthly Installments (EMIs).Commenting on the occasion, Sanjay Gupta, MD, PNB Housing said, "Unnati is a ...
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Tax bonanza: Why it’s the right time to buy a house

Posted on May 03, 2016
The government has rolled out various tax incentives for investors in a house propertyEvery Indian desires owning a home. It is triggered by not only the capital appreciation expected in the years to come and the steady rental income, but also the satisfaction that comes with owning a house.The government also promotes investment in house propertie ...
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The bestselling residential projects of 2015-16

Posted on May 02, 2016
Bengaluru: Even in a slow real estate market scenario, when sales have been tepid and property prices in correction mode, top developers seem to have sold their premium and luxury projects in a better ration than the others in the last financial year. Wealthy homebuyers paid a premium for homes that were sold by large, branded realty firms, for the ...
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Mumbai: Thanks to Goregaon flyover, Oshiwara to become Western Railway's 37th station

Posted on May 02, 2016
Its not just road commuters who will reap the benefit of the newly opened Mrinal Gore flyover, which connects the east and west sides of Goregaon. Thanks to the bridge, the long awaited Oshiwara railway station is also expected to open in six months, spelling easier travel for rail commuters as well.The Oshiwara station has been on hold for years ...
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Housing.com appoints Dilip Tuli as Senior VP

Posted on May 02, 2016
Real estate platform, Housing.com, has appointed former KPMG Director Dilip Tuli as Senior Vice President - Strategy & New Business Initiatives to assist with strategy and oversee new business initiatives, such as transaction facilitation and fulfilment services.Tulis appointment follows closely on the heels of the recent addition of Vineet Si ...
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Your checklist for buying a home

Posted on Apr 28, 2016
Everybody around you is either planning to invest in a property or has already done so. You might have been holding back waiting for the right property at the right price developed by the right person. While there are many parameters by which you can judge a right property, how do you go about selecting the builder?Here is something you should know ...
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Demand for housing loan up by 21%

Posted on Apr 28, 2016
Increase in affordability, investment by non-Gujaratis in real estate and rise in number of affordable housing projects have propelled demand for home loans in third quarter of the current fiscal. In October-December quarter in 2015-16, 21 per cent more beneficiaries procured housing loans from banks across the state in comparison to the same perio ...
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Ambli locality grows skywards

Posted on Apr 28, 2016
Vertical structures are filling its landscape in the city, the Next Gen property destination.Unlike the other city areas, the once deserted Ambli locality is taking giant strides in construction as buildings continue to rise vertically. A number of residential as well as commercial schemes are lined up for completion with project activities on in f ...
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Property registrations up in Coimbatore

Posted on Apr 28, 2016
Summary: It indicates revival in real estate and property sectorsThe number of property registrations in Coimbatore in the last one year indicates revival in the real estate and property sectors. In terms of revenue, though the realisation is lower than the target, it is more than last year in Coimbatore and Coimbatore zone. According to JLL India, ...
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