Is It the Right Time to Buy a House in India?

The home buying space is abuzz with activities again despite the economic lull and uncertainties caused by the Covid-19 pandemic. More and more Indians are now joining the spree to take advantage of low housing loan interest rates and discounts given by developers, which brings to question, is now a good time to get a home loan?

Here, let’s have a look, why the year 2023 presents a good opportunity to buy a home.

The home loan interest rates are at record low level: With the start of pandemic in 2020, Reserve Bank of India decreased the repo rate, the rate at which banks borrow from the RBI, on multiple occasions. This resulted in availability credit and home loan interest rates plummeting.

This means, you would end up spending less in total interest payable, thus reducing your total purchase cost. Thus, improving the housing loan eligibility for many users.

Attractive tax incentives from government: Apart from the tax benefits under different sections of Income Tax Act, 1961, you can get additional interest subsidy under government’s PMAY CLSS.

For instance, MIG-1- a person with household income ranging between Rs 6 lakh to Rs 12 lakh can get an interest subsidy of up to 4%.

Attractive valuation of property market: The real estate market in India is booming, with more and more projects being sanctioned for development each year. Despite the pandemic, the market rates of property haven’t dropped, thereby attesting the fact that property remains one of the best investment opportunities in India.

Better deals from developers: The property market is witnessing attractive offers from developers round the year, which was earlier available only during the lean period and festivals. Further, developers expected to offer good discounts during festive seasons, as well as add-on benefits, thus making the whole home buying experience amazing.

Buying a House Using a Home Loan

At present, the market is very attractive for home buyers and such opportunities and combinations of factors are rare in the housing market, where all the things are working in your favour, helping you to get your dream home at attractive rates.

Therefore, to check your eligibility to buy a new house through a home loan, you can use the home loan interest calculator.Using this calculator, you can determine whether you can afford the EMI or how much home loan you can afford with your present income level and finances.

However, you should know, due to the current economic situation, lenders are strictly verifying applicant’s loan eligibility and creditworthiness before approving each loan application.

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The following are some of the ways to enhance your home loan eligibility:

• Make large down payments: Large down payment means smaller loan amount, that also means smaller monthly EMI. It helps you to get attractive terms on the loan and improves your repayment capacity, thereby enabling you to improve your eligibility and get lower interest rates.
• Improve credit score: A credit score above 700 is preferred by lenders as it indicates the good credit profile of the borrower.
• Have a low debt-to-income ratio: It indicates the percentage of your income that goes toward servicing existing debt. Higher the percentage, lower will be your ability to service any new debt, and thus lower your eligibility for another loan.
• Choose longer loan repayment tenure: Going for a longer tenure helps to lower EMI, thus improving your chances of loan eligibility
• Select a good property: Properties which are being constructed by reputed builders, and which have all the required approvals from the local housing development authorities are preferred among lenders who provide home loans. Selecting properties in prime locations which indicate a growth in asset value is strongly advised.
• Add co-applicant: Adding a family member with a good credit score and stable income increases your loan eligibility significantly because EMI affordability will increase.

Final Words
Although buying a house in 2023 looks an attractive option, you should do it with great caution and only if your finances permit. Before selecting a property, it is advisable to research carefully about the house property and the project.