Home Loan Tips For Single Working Women

Affordability

The first step in buying a house is factoring in the affordability. Ideally, the home loan EMI should not exceed more than 35%-40% of the net salary. Banks typically sanction up to 80% of the cost of the house; 90% in case of loan below 25 Lacs. But, banks don’t finance stamp duty and registration charges and hence one should have enough finances to sort out additional expenses which have been mentioned below:

• a) Margin money (difference between the current value of asset and the loan amount sanctioned) which can be upto 20%
• b) Processing fees amounting to 1% to 2% of the loan amount
• c) Stamp duty respective to each state
• d) Registration charges to the extent of 1%

Saving for Down Payment

Saving 20,000 on a monthly basis for 5 years in a SIP offering a return of 10% leads to savings of around 15.61 Lakhs. Saving a similar sum in a RD in a bank @ 7.5% will yield 14.60 Lakhs. These savings can be used as margin money and to handle the additional expenses. It can not be stressed enough that before one plans to buy a house one must always build a stable and secure financial portfolio. For instance, if someone wants to invest in a Ashiana property worth Rs. 36 lacs, she would only have to pay Rs. 6-7 lacs as down payment.

Building Credit Score

Credit Score is pivotal regarding any interaction with banks. It is almost like your character certificate so it has to be impeccable. Everyone has debit cards and credit cards attached to their bank accounts these days so any defaults on payments will negatively impact the credit score. One should regularly pay the due amounts and within a year or two one will develop a good credit history. Specific NBFCs also give EMI cards based on income and repaying capacity. Timely repayment of EMIs will build a solid credit score.

Take Advantage of the Government Benefits

Govt. of India in its endeavour to encourage and empower female buyers, has announced various schemes which directly benefit women looking to buy homes or availing home loans.

a)Concession in stamp duty by 1% to 2% (respective to each state) to women provided property is registered in their name.

b)The Govt. has recently implemented the 80EEA Act which states that if a man or a woman buys a house worth Rs. 45 lacs or less in the financial year of April 2019-March 2020, additional deduction of Rs. 1.5 lacs can be availed.

Explore Women-friendly Schemes

Banks have realised the potential of female buyers and hence have developed Home Loan products exclusively for them. As an aware buyer, one should gather as much information about the products available through various banks because that will help in comparing and choosing the most suitable one. The products offer relaxation in eligibility criteria and interest rates which are less by about 0.15% in comparison to regular rates. The difference might appear negligible but the savings can be more than 1.25 Lacs over a 30-year period. The Credit-Linked Subsidy Scheme (CLSS) allows interest subsidy from 2.35 Lakhs to 2.67 Lakhs depending on the economic category. Such programs aims to benefit women beneficiaries especially single working women and widows.

Prepare for Emergencies

One should always have a Plan B ready in case of contingencies like layoffs, accidents, major illness etc. Have a contingency fund that can handle EMI for a period of at least six to eight months to avoid unnecessary stress and problems. Loan insurance products can also be explored to take care of emergencies.

The world is her oyster. There’s literally nothing a woman can’t do. She either finds a way or makes a new one. Encouraging female home buyers and making the entire process hassle free for them at the ground level will motivate other women to follow suit and take more constructive decisions. However, the current scenario in India may not be as rosy as it seems but with more women taking charge, even the real estate industry which has predominantly been a male dominated territory will see positive changes in the near future. The number of women joining the real estate workforce is also another positive indication of good times to come. Change will come only with time, acceptance and encouragement. And it will come for sure as it is the only constant thing in life.