Deciding a property investment is one of the most crucial decisions of one’s life. So it becomes imperative to make sure it is done as wisely as possible. Property purchase majorly involves legal documentation and bank loan proceedings.
Consult the banks to know your loan sanction limit that is decided based on your income limit. Consider your income-expenditure ratio before your decide upon the EMIs.
As a general rule, the EMI for all the loans you have taken and going to take should not exceed 40 per cent of your income.This is when you have saved 3-6 months gross income for any emergency purposes.
Hence if your income is 1 lakh per month, your combined EMI for all the loans you have taken should not exceed Rs 40,000 per month.
The interest rate varies from bank to bank and now after NBFCs started competitive rates, you have more choices.
In this context, you should also check other fees such as processing fee, documentation fee, and prepayment penalty (if, any) associated with the home loan. At the same time do your research on the best option that banks offer.
Home loan is a huge amount and hence even a difference of 0.5% can make big difference in pay-outs.
You should also get the maximum tax benefit from your home loan. See if you can make your spouse a co-applicant and avail the tax benefits. You will simply double the tax benefits if there are two co-applicants.
The most important part of a real estate piece is location. Even if you have to pay a little extra, you should do it. The most important aspect of the right location is the future prospect of big constructions such as mall, IT Park, company, SEZ, airport, railway lines, or any other commercial space.Apart from this, the points to consider in any location are the following:
Availability of civic amenities such as power, water, roads
Closeness to main road, markets etc.
Possibility of renting out your home
Buying a property undeniably occupies a prime position on the India ‘dream list’. So it does not matter which part of the world an Indian decides to live in; a home in India is simply a must. And the Indian laws, over the years, have made this a fairly easy job. The Reserve Bank of India governs such transactions and they fall under the purview of the Foreign Exchange Management Act (FEMA).
Here we give you a lowdown on all that you need to know if you are an NRI wanting to buy a property in India. Since property purchases are governed by FEMA, we need to go by the definition of NRI as stated in FEMA. According to FEMA, an NRI is a citizen of India who is residing outside India.
Now let us understand the rules and implications: