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Buying a home while being single is a different proposition in comparison to buying one as a couple. A couple can work as a team, plan, identify, and finance the property together. The banks consider their joint income (if both are working) thereby increasing their Home Loan Eligibility. They get the chance to share the responsibility of paying the EMI (Equated Monthly Instalment).
Today, working women are more than capable of availing a home loan to purchase a property of their choice. But, for some women, housing finance can still seem improbable.
Arranging the down payment could be one of the most challenging tasks for a single woman who is planning to buy a property against the home loan. The best strategy for single women is to arrange the margin money well in advance by investing money in appropriate instruments for this objective. For example, if a person invests ₹ 15,000 in equity mutual fund SIP for five years and the fund gives a return of 12 per cent per annum; on maturity it will yield a corpus of ₹ 12.37 lakh which can be used to make the down payment when availing a home on loan.
Estimate your affordability by including other income sources and profits from investments, to accurately determine the home loan amount you can service without compromising on your monthly obligations. Talk to your friends and colleagues and scour the internet to select a credible lender who offers low home loan interest rates.
Always keep in mind that the stronger is your case, the fewer will be the bank’s conditions for sanctioning a home loan. It is always prudent to bring out your strong points while applying for a home loan. The proofs of salary increments, bonuses and reimbursements or promotion make your case stronger. A previous good repayment track of loans closed can also be presented to the lender to highlight your track record. Besides, if you choose a bank in which you have a running account, the lender will already have an idea of your credibility.
This aspect is common to both men as well as women. One should always have a contingency plan ready in case something goes wrong. You might lose your job and with that your regular source of income. Have a contingency fund that can handle your EMI for a period of at least six to eight months under such circumstances. You can also explore loan insurance products to take care of emergencies. Keep these points in mind before you plan to buy a home and approach a lender for a Home Loan.
Banks give a lot of importance to the credit score. It is very easy to build up a good credit score. Remember, you start on a clean slate in the initial stages. Getting a Credit Card in your name without a credit history is difficult. The best option is to go for the secured Credit Cards. Banks have products where they offer Credit Cards to their customers against their fixed deposit receipts.
Generally, lenders check your CIBIL score to determine your creditworthiness. A CIBIL score of 750 is desirable as it reflects a higher ability to service a home loan. Thus, when applying for a home loan for women, applicants should monitor their credit score by paying off the existing dues and maintaining a good debt-to-income ratio.
Women borrowers can enhance their home loan eligibility by applying with a co-applicant. You can apply for home loan with up to three earning members of your family. As the combined income will be higher, women applicants can secure a higher loan amount to make the house purchase. Furthermore, each co-applicant can also benefit from tax deductions.
The Government of India has announced various benefits to women homeowners and women Home Loan borrowers.
a) Concession in stamp duty by 1% to 2% (depending on the state you reside) to women provided you register the property in your name
b) Women can save up to 2,00,000 under Sec 24 and up to 1,50,000 under sec 80C of the Income Tax Act 1961 in the repayment of interest and the principal amount of the Home Loan respectively. In case, you are going for a second home in your name; there is no upper ceiling at all on the deduction you claim.
For female home loan
applicants, there are many banks that offer special discount on interest rates
lower by around 1 per cent. Several banks also waive any processing charge on
home loan during its offer period.
Banks allow home loans up to a tenure of 30 years, so for the single women, it is always better to consider a longer tenure when applying for the loan. Lower EMI obligation can help in reducing the EMI burden in the initial years and once repayment capacity improves, then the borrower can prepay EMIs to clear the loan quicker.
For first time home buyers, the government has announced Credit Linked Subsidy Scheme (CLSS) that allows them to get interest subsidy up to ₹ 2.35 lakh to ₹ 2.67 lakhs (as per the buyer category being EWS, LIG or MIG) This scheme gives preference to women, especially widows and single working women.
Usually, when you borrow a home loan, the amount does not cover additional costs like stamp duty, registration charge, loan processing fee, etc. since the lenders only provide the borrower with the home acquisition cost. Therefore, it is wiser to consider all the home loan fees and charges before settling for quick home loans to avoid a shortage of funds.
On the brighter side, though availing of home loans is difficult for single, working women, if they are able to meet the stiff terms and conditions, there also are benefits for such applicants. Many banks offer home loans at lower interest rate to woman applicants. For instance, public-sector lender State Bank of India’s Her Ghar scheme offers attractive interest rates and flexible repayment options to women. Apart from that, stamp duty charges are also lower for women. Do a proper research of the products especially designed for you and shortlist the one that best caters to your needs.