By  Jayant S. Ajinkya

  So, with the property prices bottomed out, attractive cost of construction, and housing loans at their cheapest and the unprecedented income tax sops offered by the Union Budget and housing loans at their cheapest, you have finally understood that if you invest your rent in a bank deposit every month, you may be able to own two houses at the end. Hence, wisely you decide to leave your rented home and settle for a permanent solution – Your Own Home. A little house well filled, a little land well tilled, a little wife well willed are great riches of your own – Anon. It is buy now or repent. But if you do not plan well you will end up as a loser, unless you are one of those lucky ones who can stump up hard cash as full payment for the house.

• Take a loan from LIC, under which a life insurance policy is accepted as a collateral security. The proceeds of the policy can be adjusted towards the housing loan. To enjoy this loan facility many people even go in for additional life insurance. However, do remember that in case of death, the amount due to your family will be reduced by the loans  you may have taken. So, it is vital you use the loan money productively otherwise you are reducing the protection available  for your dependents. LIC offers various schemes viz: Griha Jyoti, Griha Shobha, Griha Laxmi, Griha Tara, Griha Sudhar, Griha Prakash. The rate of interest varies from 12 per cent to 13.3 per cent.

•   With the advent of GIC Housing Finance which is promoted by General Insurance Corporation and its subsidiaries along with UTI, ICICI, IFCI, HDFC AND SBI schemes under individual loans category to Indian as well as NRIs is made available. Each individual borrower is extended the benefit of accidental death insurance cover free of cost to the extent of loan outstanding as on first of January each year. This is a unique feature offered by the company.

•   Dewan Housing Finance Companies and Private Property Developers recognized by the National Housing Bank (NHB) has a presence in 28 cities besides Mumbai. The others include Sundaram Home Finance, Maharishi Housing and Weizmann Homes, Shelters of Citibank, etc.

• You can also visit your nearest bank. Some banks like BOI, SBI, BOB, Punjab National Bank, Allahabad Bank offer home loans. According to recent reports: The Calcutta based Allahabad Bank, during the last two years launched a slew of retail banking products, including housing loans. The Bank has opened 57 retail banking boutiques to market these products in a focused manner. The Bank has disbursed Rs. 100 crore in  a period of 100 days from these boutiques in its retail banking products. In a period of six months, the Bank has added more than 25,000 new customers to its fold. The bank has also delegated officers to serve customers and even adopt a door-to-door campaign if need be.

  Applicants if salaried, should have minimum of 7 years of service left for retirement and if self-employed should be more than 58 years. Depending on the age and income of the borrower, repayment of loan is made over a period ranging from 5-15 years. Loans are repayable in Equated Monthly Installments (EMI) comprising of principal and interest.

How to use your own money?

  Though it may sound ideal, this is what most of us may not have in adequate measure. Also, it is best advisable to invest personal money in long term investment schemes. 

* Remember, when you are 35 to 40 years of age, you still have time to start all over again if need be. You can afford to lose what you have and start from scratch. But once you are 40, you should avoid major risks and mistakes. It is better to be conservative in financial matters after 40 or so. So the right time to invest is between 25-40 years. 

The author is a leading financial consultant. For further queries please contact: J S Ajinkya  Trading and Financial Services Pvt Ltd. E-mail: jsatrade@jsatrade.com. 

A house is one of the things you passionately want to own. Your own  world, a place that welcomes you at the end of each hard day.