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ICICI Bank, one of the leading home loan providers, has come out with a unique product for home loans. Under this scheme, the customer will be given a 1% cashback on every equated monthly instalment (EMI) she pays for the entire tenor of the home loan. The offer is available for both floating and renewable fixed home rates.

Timeline for cashback:
The cashback will start accruing from the first EMI month and will get credited into the customer’s account after the completion of the 36th EMI month. Subsequently, the 1% cashback will get accumulated every EMI month and will get credited into the customer’s account after every 12th EMI month. Customers can choose to avail the cashback either in the form of credit to their ICICI Bank account or in the form of adjustment against principal outstanding.

Procedural formalities: 
The customer will have to open a savings account with ICICI Bank and activate the auto debit facility for your home loan to the account to avail this offer. Once EMI starts getting deducted from customers ICICI account, every EMI will be taken into account for the cashback offer. For instance, if one takes a Rs.25 lakh loan for 20 years, the total cost of loan will be Rs.59,02,580 (loan cost of Rs.58,90,080 plus processing fee of 0.50% of the loan amount). Through the cashback of 1% for the entire loan amount, one will save Rs.58,900. Now if one takes the option of adjustment against principal outstanding, your tenor will go down by six to seven months.

Catch:
If you miss paying an EMI during the first 36 months, you will be eligible for the cashback benefit for that particular period if you pay the overdue EMIs before the 36th month. For instance, if you miss the EMI in the 30th month and pay EMIs for the 30th and 31st months together in the 31st month, at the end of 36 months, you will get cash back. However, if you miss paying the EMIs in the last three months—34th, 35th and 36th months—you will not be eligible for the cashback offer for the entire period of 36 months even if you pay all the dues after say the 38th month. Similarly, during the 12-month cycles after the 36-month cycle ends, if you miss an EMI, you will not get the cashback offer for the preceding months, if you are unable to pay it before the stipulated period of 12 months. For instance, if you miss paying the EMI in the 11th and 12th month in a 12-month cycle, you will not get the cashback benefit for the preceding 10 months. The cashback computation will start after you pay all the dues.

Most banks offer almost same interest rate on home loans. However, through this product from ICICI, one can reduce the tenure of the home loans by few months. One needs to ensure that one is discipline in paying EMIs though.


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Real estate has proven to be one of the best investments in India in the last decade or so, especially in Metros like Delhi NCR and Mumbai. Due to the scarcity of fresh real estate projects in Delhi, the surrounding areas like Gurgaon, Noida and Faridabad has prospered along with Delhi.

In the last 5 years, prices in Noida have increased substantially, giving very handsome returns to investors - almost 4-5 times the initial investment in some real estate segments like projects on Noida expressway.

In the last 2 years alone, prices of the plots on the Noida expressway like those of Jaypee Group have increased 2.5 times. Two years back, the price of the plot was around Rs 35,000 per square yard and now it is around Rs 85,000 per square yard.

Investments in apartments, though have not given such returns. However, they are still significant compared to stock market or fixed income instruments like fixed deposits. Two years back, the price of the apartment was around Rs 3,000 per square feet and now it is around Rs 4,500 per square feet. The returns may not be in the same league as investment in plot, but it is still very high, especially, since the investors do not need to put the entire amount initially - they usually take 60% to 80% of amount as home loan from a bank.

Now, the important question - Does it still make sense for a new investor to invest in real estate on Noida expressway?

Many analysts think that the centre of Noida is shifting to Noida expressway as most of the companies like Accenture, HCL, Steria etc have moved their offices on Noida expressway. Also, most of the new residential projects by top developers are being planned and constructed on the expressway. Real estate space in Delhi has got either exhausted in most locations or is way too expensive for most companies. IT companies are looking to move in SEZ zones to avail tax benefit which are being planned in Gurgaon and Noida. People still continue to move to Metros as most of the development is happening in big cities. Delhi has got expanded to "Delhi NCR" or Delhi National Capital Region which constitutes Gurgaon, Noida and Faridabad. This trend will continue and more small places will get included in Delhi NCR - the next in line being Manesar and Greater Noida. So, the future of real estate investments on Noida expressway looks great. Even if there is a slowdown and recession as many predict, it is likely to hold the prices of real estate projects on Noida expressway. There is limited downside and very good upside.


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State Bank of India (SBI), India's largest lender has decided to allow its customers to switch their existing loans  to lower rates. There is a small catch - the bank will charge a one-off fee of 1% of the outstanding loan amount for the switch over.

This is good news for large number of home loan borrowers whose home loans are linked to the prime lending rate which is around 14.75% at present. Currently the floating rate of bank is linked to the base rate which is ten per cent. SBI's current floating rates vary from 10.5 per cent for up to Rs 30 lakh loan, 10.75 per cent for between Rs 30 lakh and Rs 75 lakh, and 11 per cent for loans above Rs 75 lakh.

This will give an option to existing home loan borrowers who are on the prime lending rate to switch over to the new floating rates that are much lower than prime lending rates. There is no cap on the loan tenure or the amount of the loan to reprice loan to a lower rate nor there is any time limit for the switch over.

RBI had earlier prompted banks to remove the pre-payment penalty. There were lot of borrowers who were making inquiries about shifting their loans to other banks. Hence, SBI took this decision to retain existing customers by helping them lowering their interest burden, which will in turn help the bank avoid possible delinquencies.

HDFC is also planning a similar move and is likely to announce this in the coming few weeks.


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Available for rent:

Type of property: Office Space
Area: 385 Sq. Ft.
Floor No: 6th
Building: Hemkund Chambers
Location: 6, Nehru Place, New Delhi - 110019
Owner Name: Mr. Surinder
Owner contact details: 9810580244
Owner Email Id: bhasinsk46@gmail.com

Fully furnished with Desks, Cabinets, AC, Chairs etc so can move in asap. Contact Mr. Surinder for rent price.


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The Reserve Bank of India (RBI) raised its key lending rate yet again by another quarter percentage point as it continues its fight against stubborn inflation while equally being concerned about slowdown in the Indian economy.

The central bank hiked the repurchase rate, or repo rate (at which it lends to banks) by 25 basis points (bps) to 8.50%. The reverse repo rate (at which the RBI absorbs money from banks) will now stand at 7.50%. The Cash Reserve Ratio (CRR) of scheduled banks has been left unchanged at 6% of their net demand and time liabilities.

Banks are expected to announce further hike in housing loan and car loan rates after this announcement.

RBI also deregulated the savings bank interest rate in the monetary review.

We hope this would be the last series of hike in lending rate. After this the RBI should either hold on to these rates or reduce it by 25 basis points. The key decision maker would be the inflation which is expected to cool down after this announcement and reduction in global commodity prices.


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Supreme Court has barred the sale of properties through general power of attorney (GPA) and sale agreements (SA). Registered sale deed will be the only valid instrument of transaction of property in the country. The rule comes into effect from 11 October, 2011. The Supreme Court ruled this ban to reduce cash transactions in real estate market and for bringing down the legal disputes in real estate market.

In 2004, the government had made registration of the sale agreement mandatory, requiring payment of 90% of stamp duty and corporation tax for a property transaction to be deemed complete. Therefore, the government will not gain additional revenue following the Supreme Court's order. The registrar's office also keeps track of sale agreements which shows all transactions related to a particular property. However, people were still engaging in sale pf properties through general power of attorney.

This order would impact lot of people and will bring down transactions in the real estate market in the short term. However, it may bring down legal disputes in the long term. Though, this verdict will cause anxiety to owners who have bought dispute free properties on general power of attorney and sale agreement simply because paperwork wasn't complete for a proper sale registration. Apartment owners in societies which have not got a completion certificate will find themselves on a tough spot because these flats cannot be converted into freehold. Even after regularization of some unauthorized colonies, a large number of properties are still owned through power of attorney because the authorities have never actively facilitated their conversion to freehold.

Also, bank loans will not be available for property transactions which take place through power of attorney. After this, there should be rise in the market value of freehold real estate while the price of leasehold properties shall go down.


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