Additional 1L deduction for Home Loan buyers!

Source: http://economictimes.indiatimes.com/news/economy/policy/budget-2013-home-loan-borrowers-allowed-additional-deduction-of-rs-1-lakh/articleshow/18725752.cms

Wait.. don't jump with joy if you are an existing home loan customer. 

The additional 1L deduction is applicable to only those who fullfil the following criterias

1. First time home loan

2. Loan amount not above 25L

3. Disbursement during the FY 2013-14

That means if you are an existing customer then forget about any benefit.
Switching to a new borrower will not help either as it will not be considered as a first time loan. (evil laugh)

Enjoy!

Shifted to Axis Bank Power Home Loan

Finally after much deliberations I have actually shifted my loan to Axis Bank. 
The terms of the loan are as below: 

1. Interest rate: 10.25% (Base Rate 10.00 + Spread 0.25)
2. Processing fee: Rs. 5620/-
3. Mortgage charges: ~Rs. 3900/-
4. Other charges: ~Rs. 1700/-
5. Loan tenure: 8 years

It feels good to be out of a discriminatory system (BPLR) and to have moved to the Base Rate. 

Have the rates increased after the prepayment penalty has been scrapped?

Almost a year ago, I had written that there was no reason for the banks to increase the interest rates in case the prepayment penalty was scrapped. 

Now nearly 10 months after the NHB and RBI told the NBFCs and Banks to stop charging for prepayment, not one bank dared to increase the interest rate. 

Right time to transfer your home loan

If you are burdened with a loan with very high interest rates, then this is the right time to lessen your burden i.e. transfer your loan to a competitive bank. 

Here are a few good options: 

1. SBI is a currently the number one institution in the home loan space. 
Features of the current offer: Processing fees is flat Rs. 1000. 
Lowest Interest rate of 10.25% (10 + 0.25)

2. Union Bank of India
Zero Processing fees
Interest Rate: 10.5% (The good thing about it is there is 0 spread. i.e. Interest rate = base rate)

3. Central Bank of India: Very similar to the Union Bank of India. Please check with the bank. 

Watch out for other banks for waiver of processing fees, and hefty discount in the spread, and in turn, the final interest rate. 

Warning: Only approach Banks.. and not other HFCs which are still lending based on the PLR. Ask them "Are you a Bank?"

SBI about to launch a great offer for BT!

http://www.moneycontrol.com/news/economy/sbi-to-cut-processingconversion-feeshome-loans_751201.html#toptag

It's expected that SBI is going to make an offer that you can't refuse. 
Highlights: 
Processing fees expected to be cut to Rs. 1000/- flat for any amount of loan. 
Lowest spread i.e. 0.25. Understand this component very seriously. A spread of 0.25 means you will not be discriminated in the interest rates compared to the then "new" customers by more than 0.25%. 

The festive season offer is expected to last for 3 months. Hurry.. SBI takes time to finish the procedure. I'm going to my SBI branch on Saturday!!

HDFC fined by consumer court!

In an interesting verdict, a Delhi consumer court has fined HDFC Ltd Rs. 25000 + Rs. 5000 for litigation charges. 


http://www.indianexpress.com/news/hdfc-told-by-consumer-forum-to-pay-rs-1.28l-to-customer/950115/


Moral of the story: Don't be afraid of the biggies. If you think someone is cheating you, file a consumer case!

Another burden on your new home loan!

Bad news for new home loan customers. 


http://business-standard.com/india/news/reserve-bank-puts-new-clamphome-loans/463845/


RBI has asked the banks not to consider stamp duty and registration charges while calculating the finance amount. 


Stamp duty is approx 4% of the property value while the registration charges are 1% (with 30k cap currently)


Be ready to take a hit of 5%; i.e. approx reduction in your property value while calculating the finance amount