December 14, 2016
When you find that house of your dreams, the first thing that springs to mind is to apply for home loan since it’s your ticket to funding the big purchase. But sometimes, loan applications get rejected for various reasons, among which the most common is a low CIBIL or credit score. It is major factor that determines your loan approval, loan amount and even rate of interest.
Why is high and low credit score important?
While a high credit score is viewed as a low probability of a default, a low credit score reflects the opposite, making financial institutions wary of the person applying for a home loan.
Credit score is a three digit number that ranges between 300 and 900. It reflects your creditworthiness as it is a summary of your payment history, outstanding balances, number of loans, total credit limit, credit utilization, every loan detail taken from different lenders. Higher credit scores are great for you if you are applying for a home loan. On an average, a credit score of 750 is great for borrowers as lenders find themselves at less risk. Moreover, at this score, you can get good deals on your home loan and better rates of interest.
Your credit score is impacted positively by:
● Consistent payment of loan EMIs
● Credit card bill payments on time
● No over-leveraging
● Payment of credit card bills in full as opposed to minimum due amount each time
● Good financial records
● Many types of credits, especially unsecured personal loans in family
● Good utilization of credit limit on cards
Your credit score is impacted negatively by:
● A lot of credit report enquiries by banks and financial institutions
● Dishonoured or bounced cheques
● Loan repayment irregularity
● Defaults on credit repayments and even defaulting as a guarantor
● Late payments on credit cards or making part payments consistently
● Number of unsecured credit (multiple personal loans)
● Numerous applications for unsecured loan, especially when rejected
● Going beyond the approved credit limit and even high utilization of it
Other than these, your credit score can also be impacted negatively when banks or financial institutions you are dealing with make errors in their records. Hence, it’s important that you keep checking whether or not your banks are submitting the right information. It comes really handy if you request and maintain a copy of your credit history personally as compared to a financial institution doing that for you.
, Home Loan
, Interest Rates
December 13, 2016
CIBIL Score is a crucial aspect in determining your home loan eligibility. Every time you apply for home loan, your lender checks this score for approving/disapproving your application. It is a summary of your credit history as per your credit behaviour. It depends on the following factors:
Past payments: All your previous payments, whether on time or delayed, are recorded with CIBIL. Consistency in making payments is considered good whereas more recent delays are seen negatively.
Settlements, defaults and write-offs: Multiple write-offs, defaults on previous loans and more recent write-offs (as opposed to older ones) have negative effects on your credit score. Defaults and delays on secured loans are worse than on unsecured loans.
Credit as proportion of income: The higher the loan balance you have, the lower your credit score will be. Less loan balance shows smart credit utilization on your part.
Credit cards: If you have high credit card balances, your credit score will be low. Consistency in repaying credit card debts improves the score. Credit cards (unsecured loans) are viewed negatively by lenders as compared to secured loans.
Different ranges of CIBIL Score
Every person with a financial history has a CIBIL score and it can range anywhere between 300 and 900, with 900 being the highest. A person can also have a score of 0 or -1, which means that they have no credit history in terms of loans and credit cards. So to get the credit history started, you must have at least one credit card or applied for a loan. Here is a breakup of CIBIL scores and what it means:
- 550 – 650: It is a fair score and accepted by many lenders. This score shows that you have been quite regular with your repayments, other than a few exceptions. Most lenders trust borrowers with this score and approve their home loans but usually with a higher interest rates.
- 300 – 550: This is the worst score anybody can have and it means that you have been defaulting on your payments. With such a score, getting credit is extremely difficult.
- 650 – 750: For home loan eligibility, this score is very promising. And if you have this credit score, you will not face any issue regarding approval of application.
- 750 – 900: It is the best possible score anybody can have and it indicates your expertise at managing your finances. Lenders will approve even a larger loan amount to you at great rates when you apply for home loan.
, Home Loan
, Interest Rates
June 2, 2015
At present, owning a house has become a lot easier than before because of the prevalence of companies that offer loans with flexible terms and payment programs. Therefore, you can purchase your dream house just as long as you push the right buttons and make the right moves.
One way to achieve this is to apply for a home loan, because with this you can avail the necessary funding that comes with fixed interest rates andhas no ongoing fees. That’s value for money that you can never get elsewhere.
How do you avail the right home loan that will go well with your financial status? Read on and find out.
First, you should find a lender that offershome loans. The good news is: this is relatively easy because of the number of reputable companies out there that offer them. Plus, you can achieve this without leaving the comforts of your home because you can find a lender by doing an Internet search. You can look for building societies, like NPBS, talk to their loan officerto see if their home loan programs complement your needs, preference, and budget. Aside from the said institution, there is a wide array of companies out there that can help you avail your dream house.
Alternatively, you can check local bank and credit union websites to find out if they offer such program. If a local bank or credit union that is based in your area offers one, grab the opportunity and contact their loan officer. They’re generally more than willing to answer your queries and offer sound advice.
Once you’ve found a lender, you’ll have to study the application process. In general, this aspect is easy, but it may take some time. You’ll have to give your personal information and hand over paperwork that confirm your employment status and monthly income. After sending your application, company loan officer will check the authenticity of the documents and decide if your application will be approved or not.
If your loan application becomes approved, make sure to scrupulously review the terms and conditions before signing up. There are several factors that you need to consider and these include the interest rates, monthly payments, and penalties, among others. If you feel that they will not have a negative impact on your financial status, then sign the dotted line and avail your dream house.
Owning a house nowadays is a lot easier that it was, say, 10 or 20 years ago and you simply need to do your homework beforehand to avail the right loan that will not mess up your budget and credit rating. Afterwards, you can avail your dream home in no time at all.
Don’t overlook the precautionary measures that were elaborated above because neglecting this aspect may wreak havoc to your finances and bury you with debt. So, follow them and obtain your dream house and achieve financial stability in the process.
, personal finance
May 31, 2015
Generally it is hard to upgrade from a 1 BHK apartment to a higher BHK apartment but these days due to availability of real estate portals and real estate agents you can easily look for a 2 BHK apartment. Upgrading takes up a lot of energy and gives lot of stress and tension. These types of situations only come up at certain times in life and people are totally clueless about it. Modifying your house ordinarily happens when your family is extended or when you need more room for your storage or simply when you have some extra money to splurge on yourself and your family. Going from a 1 BHK to a 2 BHK will mostly be double the expenditure than the first one. As we all can imagine by the name only that from 1 Bedroom to 2 bedrooms you will have more space to keep all your things but there will be a rise in the costs that will take to maintain the house or the additional room. If you are in the search for a 2 BHK flat for rent in Kolkata or any other city then you can easily look for one on the real estate portal.
Here are some of the things that will increase your cost if you upgrade from a 1 BHK to 2 BHK:
- Cost of the house: if you are buying a new house completely then that’s going to cost you double just because you are asking for an additional room. The rates for 2 BHK apartments are nearly touching the sky because of the high demand for them. Hence it extremely hard to find a good 2 BHK for rent in Kolkata or 2 BHK on rent in Mumbai. The other reason being that these cities come off as the prime cities and hence you will have difficulty finding apartments but if you keep a careful eye on the apartments and all the changes in the city then you are sure to succeed.
- Maintenance: it doesn’t matter if you have a servant who does all your house work or if you do it yourself, the efforts to maintain a 2 BHK house is going to be enormous and hence even if you don’t have a house servant you will eventually have one. The home servants/maids ask for more money when there are more rooms in the houses and hence the salary that you paid to your previous servant won’t be what you will be paying to your new one. Moreover doing a normal pest control of your house and other things will also cost you more.
- Security: now that you have 2 rooms the security of the second room will be an additional cost for you. If you believe in fitting CCTV cameras at your place or just normal safety measure then you will pay extra for that.
- Decorating the room: decorating the room and adding furniture to the room is sure to be an additional cost to you. Also looking after the extra room will be asking for some money.
Hence if you are planning to upgrade to a 2 BHK house then be sure that you know all this points and you take decision only after evaluating and thinking over each and every point. If the upgrading is done with lot of thought then you might be able to eliminate some cost. Hence purchasing a permanent house try living in a 2 BHK flat for rent in Kolkata.
, Home Improvement
, real estate
April 7, 2015
Due to the sudden recovery in the housing market across the United States of America, prices in many markets have shot up. According to reports by Realty Trac, the median sales price of the single-family homes and condominiums had reached their highest level since September, 2008. Appreciation of price and the tempting number of foreclosures created frenzy among the real estate investors who were willing to pay cash and this in turn made it tougher for the traditional buyers to compete with them. However, experts are of the opinion that 2015 will be marked due to rejuvenation of normalcy and balance for the entire real estate markets throughout the nation. It has been a tough time for the buyers but it is certainly going to be easy in 2015.
The chief economist of Redfin.com, Nela Richardson agrees that it has been a pretty clear pattern that the activity among the investors has been shrinking with time. Nowadays, investors are only interested in places where they can buy low and sell high. The growth in price is slowing down dramatically and hence they are not able to sell at a much higher price than what they buy. Investment properties will be less interesting in 2014 and will continue throughout 2015.
Real estate trends to watch out for in 2015
If you’re an investor or a buyer, you should be aware of the bigger picture and before taking any step into the market, you need to know the trends that you should watch out for. Below listed are some of the real estate market trends that you should be aware of in 2015.
1. An improved market for all buyers: For all the middle-class homebuyers within the US, 2015 is indeed going to be a rather better year than 2014 as more inventory will be coming into the market, as per chief economist Jed Kolko. As the appreciation of home prices are predicted to flatten out, the present owners will have enough incentive to sell off their properties before the prices dip down yet again. In fact, the median sales price for single household homes was $217,400 in 2014, which was up from 2013 when the median sales price was only $196,300, as per the National Association of Realtors. For the buyers, the good news is that there are lots of people who have got back above water.
2. Interest rates on mortgages will stay pretty low: An ace mortgage broker sees an indeed prosperous and flourishing 2015 and due to that he plans to increase his number of mortgage officers. What is the key reason behind this? Well, the interest rates are going to stay pretty low simply due to the locational chaos and unrest and this will in turn keep inflation under control and will also lower oil prices. More and more buyers will be starting soon with buying homes in 2015. The interest rates were already low in 2014 but in 2015 the lower rates would translate to higher number of home sales.
3. The changing age game: The millenials are even bigger cohorts than their so-called baby boomers generation. As the tendency among the millenials to procrastinate homeownership and rent longer will directly affect the apartment sector, survey interviewees also studied that the investors should take into account the housing preference of millenials that could change in 2020s. Looking beyond the millenials, this report also predicts further changes in the industry which results in the emergence of the smaller Generation Z.
4. Relationship of real estate & technology will intensify: We all are aware of the fact that no particular form of real estate is excluded from the expansion of technology. Technology is the main factor that is evoking chance in space use, locations and other demand levels. Now that the entire industry is going online and there is increasing birth of e-commerce websites, the love-hate relationship between technology and real estate will definitely intensify.
Top 10 global real estate markets to invest your dollars in 2015
Now that you know the real estate trends that you should watch out for, you should also know the top 10 markets where you can invest your dollars. Here are the names:
1. Williamsburg, New York
2. Tokyo Toyosu – Kachidoki bay
3. Barangaroo, Sydney
4. 16th arrondissement in Paris
5. Cape Town Central Business District
6. Kowloon West in Hong Kong
7. Tiong Bahru in Singapore
8. Runda and Gigiri in Nairobi
9. Victoria Park, London and
10. Business Bay in Dubai.
So, if you have your dollars invested in credit card debt, student loan debt, and non-profit debt consolidation companies or in auto loans, make sure you invest some of your dollars in the real estate industry in 2015. You can definitely reap good returns this year.
, real estate