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Amit Patel

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Amit is a voracious writer and reader with experience in developing content for different niches. A friendly and down-to-earth person with a sense of humor, he is keen on offering factual and informative insights in his writings. He loves researching new developments in the industry and putting them in layman’s terms.

Mortgage Rates Could Dip as Low as 4% as Economy Improves and Inflation Slows, Bringing Buyers Back to the Market, Says NAR Report

As the economy continues to improve, mortgage rates are expected to decline, potentially falling as low as 4% in the second half of 2023. The decelerating inflation rate is the key reason for this forecast, with consumer prices falling to their lowest level in 2022 at 7.1%. This downward trend is expected to continue, potentially bringing buyers back to the market.

One contributing factor to the continuing decline in inflation is the increasing rent that people pay and the equivalent rent owners would have paid. These measures have seen significant annual gains of 7.9% and 7.1%, respectively, due to a housing shortage and historically low rental vacancy rates. However, lagging data shows that the housing shortage is not as severe as previously thought, with the rental vacancy rate increasing from 5.8% to 6% in the third quarter of 2022.

In addition, multifamily housing starts hit their highest level in nearly 40 years, with apartment vacancy rates expected to rise further and rent growth slowing down. Overall, this will contribute to a further decline in consumer prices.

The National Association of Realtors (NAR) has advocated for converting vacant commercial space into residential units through funding and tax credit incentives. Furthermore, financial incentives to rehab dilapidated, abandoned homes in major cities will help increase housing supply and neighborhood safety.

While the job market remains strong, the first-time buyer share of home sales has remained low at only 28% in November. However, this figure is up from 26% in November 2021. According to NAR’s 2022 Profile of Home Buyers and Sellers, the annual share of first-time buyers was the lowest since NAR began tracking the data.

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India’s Residential Rental Market on the Rise as Bengaluru Leads with Double-Digit Growth, According to Anarock Report

According to a recent report by Anarock Research, India’s residential housing market is experiencing a surge, with housing prices soaring, unsold inventory shrinking, and rental rates on the rise in major cities. The report shows that the average rent costs have increased in double digits across most major cities since last year, with Bengaluru leading the pack.

The demand for rental property has been increasing since offices and schools reopened after the third Covid-19 wave, leading to residential rental values appreciating by nearly 25%. Anarock’s analysis included prime areas of the top seven cities, namely Delhi-NCR, Hyderabad, Chennai, Kolkata, Mumbai, Bengaluru, and Pune, for a 2BHK home of 1,000 sq. ft. area.

In Bengaluru, four prime areas, including Thanisandra Main Road and Marathahalli outer ring road, saw the highest year-on-year growth of 24% each in the January-March quarter. The report further reveals that other major cities, such as Mumbai, Thane, and NCR, also witnessed rental value growth of 10-17%.

The report also suggests that the housing market’s buoyancy is likely to continue, with new property launches, sales numbers, and lower inventory indicating a positive trend. However, analysts caution that impending global recession, continued inflation, and repo rate hikes could have a short-term impact on the housing sales market.

The report also highlights that the increased appetite for owning a dream house is being driven by millennials, with 61% of survey participants preferring to invest in real estate, out of which 52% were millennials.

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Maharashtra Tribunal Orders Developer to Pay Interest to Joint Property Buyers Denied Possession

The Maharashtra Real Estate Appellate Tribunal, Mumbai has provided a major relief to joint property buyers who had entered into an agreement for sale in 2006 to purchase an apartment in a Bandra-based project.

The developer had denied possession of the apartment, claiming that the project cost had escalated due to the cessation of construction work for 10 years. In response, the tribunal has ordered the developer to pay an interest of 2 per cent on the amount paid by the buyers, which is to be calculated from 2008 until the actual possession of the apartment. Additionally, the developer has been asked to pay Rs 20,000 to the buyers. The amount of interest can be adjusted at the time of possession against the balance amount to be paid by the homebuyers.

The project was issued a stop work notice by the Brihanmumbai Municipal Corporation in 2006 following directions of the forest conservator, as the land under the project was declared a forest. Despite the developer and other affected developers filing a plea in the Bombay High Court, no relief was granted, and they approached the Supreme Court. The apex court vacated the stay on the construction in 2014, and the developer resumed construction work in 2015-16. However, claiming that the price of the project had increased substantially due to the delay in construction, the developer asked the purchasers to pay an additional amount.

The homebuyers declined to pay the additional cost and demanded interest along with compensation for the delay in handing over the possession of the apartment. The appellate tribunal dismissed the developer’s plea, stating that it was the responsibility of the developer to have a clear title of the land before starting work and that the delay caused was beyond its control.

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Indian Prime Minister Narendra Modi to inaugurate projects worth over Rs. 27,000 crores

Prime Minister Narendra Modi is all set to embark on a two-day tour of Madhya Pradesh, Kerala, Dadra and Nagar Haveli and Daman and Diu on April 24 and 25. During his visit, he will inaugurate and lay foundation stones of projects worth more than Rs. 27,000 crores, which are expected to promote economic growth and development in these regions.

On April 24, PM Modi will participate in the National Panchayati Raj Day celebrations at Rewa, Madhya Pradesh, where he will inaugurate an integrated eGramSwaraj and GeM portal for public procurement at the Panchayat level. He will also lay the foundation stone and dedicate it to the nation’s projects worth around Rs.19,000 crores, including roads and highways, water supply and irrigation, and renewable energy projects.

On the second day of his tour, PM Modi will flag off the Vande Bharat Express at Thiruvananthapuram Central Railway Station in Kerala. He will also lay the foundation stone and dedicate to the nation’s development projects worth more than Rs. 3,200 crores, including a new IT building, a petrochemical complex, and a hospital. Additionally, he will visit the NAMO Medical Education & Research Institute and lay the foundation stone and dedicate to the nation various development projects worth more than Rs. 4,850 crores at Silvassa, Dadra and Nagar Haveli. Later in the day, he will inaugurate the Devka Seafront at Daman, which is expected to boost tourism in the region.

Through the inauguration and initiation of several development projects worth over Rs. 27,000 crores, the prime minister’s visit to these four states is aimed at boosting the infrastructure and economy of these regions. The projects are part of the government’s efforts to build world-class infrastructure, create jobs, and improve the standard of living of the people.

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Maharashtra’s MahaRERA imposes fines on 12 developers for advertising projects without registration numbers

 

MUMBAI: The Maharashtra Real Estate Regulatory Authority (MahaRERA) has imposed fines amounting to Rs 5.8 lakh on 12 developers who advertised their projects in newspapers without mentioning their registration numbers.

MahaRERA has issued show cause notices to the promoters of 54 projects in the state after taking cognizance of the advertisements. The authority will now also monitor project advertisements on social media platforms and penalize developers who advertise without MahaRERA registration numbers.

The fines imposed on the 12 developers vary according to the size and cost of the advertisement issued in the newspapers. One developer was fined Rs10,000 for mentioning the registration number in a small font. Among the 12 developers, one is from Mumbai, while the others are from Pune, Nashik, and Aurangabad. Interestingly, 11 of these developers had MahaRERA registration numbers but did not mention them in their advertisements.

MahaRERA heard 15 of the 54 projects in the first phase and took action against 12 projects. According to the Real Estate Act, any project with a land area of more than 500 square meters or eight flats must be registered with MahaRERA, and the registration number must be mentioned in any advertisement of the project.

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Section 115H of the Income Tax Act

Based on the taxpayers’ residency status, India’s income tax laws differ. As a result, the laws for resident and non-resident Indians differ. The income tax also outlines the consequences in the event that an NRI’s residency status changes to the resident during an assessment year. NRIs often aren’t permitted to receive tax benefits under Chapter XII-A of the Income Tax Act. But, it does in the event of a change in residence. Herein lies the significance of Section 115H.

What is Section 115H?

Taxpayers who were NRIs the previous year but became Indian residents this fiscal year are subject to the provisions of this section. According to the clause, these taxpayers must provide a declaration to the assessment officer outlining these facts when they file their ITRs. The provisions of this section continue to be applied to assess the tax burden of such a taxpayer up until his assets are converted to money value.

Section 115H reads, “Where a person, who was a non-resident Indian in any previous year, becomes assessable as a resident in India in respect of the total income of any subsequent year, he may furnish to the Assessing Officer a declaration in writing, along with his return of income under Section 139 for the assessment year for which he is so assessable, to the effect that the provisions of this chapter shall continue to apply to him in relation to the investment income derived from any foreign exchange asset, being an asset of the nature referred to in sub-clause (ii) or sub-clause (iii) or sub-clause (iv) or sub-clause (v) of clause (f) of section 115C ”.

“And if he does so, the provisions of this chapter shall continue to apply to him in relation to such income for that assessment year and for every subsequent assessment year until the transfer or conversion (otherwise than by transfer) into money of such assets,” it adds.

Benefits of Section 115H

In accordance with this clause, NRIs are eligible for a 20% tax credit on investment income as well as a 10% tax break on dividend income and long-term capital gains from certain assets. However, only income from foreign exchange assets is covered by the advantages under Section 115H. Even when deposits are moved from one bank account to another while maintaining their status as convertible foreign exchange, the preferential tax rates still apply.

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What is Section 112A of the Income Tax Act?

The Finance Act of 2018 created Section 112A, which is concerned with tax on long-term capital gains from the sale of listed equity shares, equity-oriented mutual fund units, and business trust units. For gains over the threshold limit of Rs 1 lakh, the long-term capital gains tax rate that is applicable to these listed securities is 10%.

For providing scrip-by-scrip information about these listed securities sold in a fiscal year, the Income Tax Return (ITR) form includes Schedule 112A. Taxpayers who have long-term capital gains under Section 112A are required to fill out Schedule 112A with specific information.

Previously, Section 10(38) allowed for the exemption of capital gains from the sales of units of mutual funds, business trusts, and listed equity shares. Schedule 112A was added to tax gains that had previously been exempt until FY 2017–18 (AY 2018–19) and Section 10(38) was eliminated.

Conditions for Capital Gains Taxation under Section 112A

According to Section 112A, only long-term capital gains are subject to tax. When utilizing Section 112A’s tax benefits for capital gains, the following requirements must be met.

  • The long-term capital assets must be securities.
  • The sale must be of listed equity shares, mutual fund units and units of business trust.
  • Transactions relating to the purchase and sale of equity shares are subject to Securities Transaction Tax (STT). In case of equity mutual fund units or business trust, the transactions of the sale are liable to STT.
  • Deductions as per Chapter VI-A cannot be availed in respect of such gains.
  • A rebate under Section 87A cannot be claimed from such gains.

Long-term capital gains under Section 112A

To qualify for long-term capital gain, the securities must be held for more than a year. The applicable tax rate is 10% above the set income tax exemption threshold of Rs 1 lakh. In other words, the long-term capital gains under Section 112A are only subject to 10% taxation above Rs 1 Lakh, plus any applicable education surcharge.

For instance, a taxpayer has annual long-term capital gains of Rs. 1.70 lakh under Section 112A. 10% of Rs 70,000 (1,70,000 – 1,00,000) is the tax that will be charged.

When a resident individual’s or HUF’s total income falls below the basic exemption threshold after deducting long-term capital gains, the long-term capital gains are reduced by that amount.

Example:

Assume that a taxpayer has total income of Rs. 4,00,000 and has net long-term capital gains of Rs. 2,000 under Section 112A. After deducting capital gains, the remaining income is Rs. 2,00,000, which is less than the threshold for basic exemption. The fundamental exemption threshold is Rs. 2,50,000.

Rs 50,000 (Rs 2,50,000 – Rs 2,00,000) will be the amount by which the reduced net income falls short of the basic exemption limit. As a result, the long-term capital gains will be taxed at Rs. 1,50,000 (Rs. 2,00,000 – Rs. 50,000).

How to offset a long-term capital loss under Section 112A?

Long-term capital loss is the term used to describe the loss, if any, on the sale of long-term listed equity shares or units. According to Section 112A, the assessee may offset the loss against long-term capital gains. One may offset losses from gains in case pof losses incurred from some securities on others. Net gains are subject to taxation if total earnings surpass Rs 1,000,000. For a period of eight years following the assessment year in which the loss occurs, one may carry forward a long-term capital loss that cannot be offset.

Section 112A grandfathering provisions 

The Finance Act of 2018 included grandfathering provisions that exempted long-term capital gains earned until January 31, 2018. To determine the cost of acquisition for specified securities purchased prior to February 1, 2018, we first take the lower of the fair market value as of January 31, 2018, and the sale consideration. The result will be compared to the purchase price, and the higher of the two will be taken into account.

Example: Section 112A capital gains calculation

A

B

C

D

E

F

Sale price

Cost

FMV

Lower of A and C

Acquisition cost: Higher of B and D

Capital gain

Rs 3,00,000

Rs 50,000

Rs 1,50,000

Rs 1,50,000

Rs 1,50,000

Rs 1,50,000

Rs 4,00,000

Rs 1,00,000

Rs 2,00,000

Rs 2,00,000

Rs 2,00,000

Rs 2,00,000

Rs 3,00,000

Rs 75,000

Rs 1,50,000

Rs 1,50,000

Rs 1,50,000

Rs 1,50,000

Rs 1,00,000

Rs 1,20,000

Rs 1,50,000

Rs 1,00,000

Rs 1,20,000

(Rs 20,000)

Rs 1,00,000

Rs 1,50,000

Rs 1,80,000

Rs 1,00,000

Rs 1,50,000

(Rs 50,000)

Rs 1,00,000

Rs 1,70,000

Rs 1,60,000

Rs 1,00,000

Rs 1,70,000

(Rs 70,000)

Rs 1,300,000

Rs 6,65,000

Rs 9,90,000

Rs 8,00,000

Rs 9,40,000

Rs 3,60,000

According to the example, the taxpayer can use the grandfathering mechanism to arrive at long-term capital gain taxable, which is Rs 3,60,000, by offsetting losses from gains. Only gains exceeding Rs 1,00,000, or Rs 2,60,000, are subject to taxation.

Fair Market Value

  • The highest price for a security quoted on a reputable stock exchange is referred to as the security’s fair market value (FMV), or listed securities.
  • If there hasn’t been any trading in the security on January 31, 2018, the FMV will be the highest price the security has ever been quoted at on a day that was immediately prior to January 31, 2018, when it had traded on the recognized stock exchange. 
  • In the case of unlisted units as of January 31, 2018, the FMV is the net asset value of the units as of that date.
  • FMV = Purchase Cost * Cost Inflation Index for FY 2017–18 / Cost Inflation Index of the year of the purchase or FY 2001–02. This formula applies to equity shares listed after January 31, 2018, or acquired through a merger or other transfer in accordance with Section 47.

How do I file an ITR under Section 112A of the Income Tax Act?

Schedule 112A, which permits an assessee, where grandfathering provisions are applicable, to report long-term capital gains by scrip, is included in the ITR filing for AY 2020–21. The required scrip-specific information will include the scrip name, ISIN code, quantity of sold units or shares, sale price, purchase cost, and FMV as of January 31, 2018. Where the grandfathering provisions are in effect, these specifics are necessary to determine the long-term capital gains’ correct value.

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Understanding Hypothecation: Everything You Need to Know

In India, goods that are financed by banks are frequently hypothecated to the bank as security or collateral until the loan is repaid by the borrower. When a debtor wants to get a loan, they can hypothecate and use a specific asset or piece of property as security or collateral. It can lower mortgage costs and interest and make it easier for people to get loans who might not have the best credit histories. This article covers all the necessary information about hypothecation. This article is for you if you wonder if hypothecation is the best way to get financing for your project.

What is hypothecation?

In general, the term “hypothecation” refers to a fixed or floating charge that a security provider creates in favor of a lender on specific kinds of movable and immovable property, whether they are existing or future assets, without actually giving the lender possession of the underlying asset. Hypothecation is involved when a piece of property is given as loan collateral. The asset’s owner does not forfeit any of the income it generates, including ownership rights, title, or possession. However, the lender has the right to seize the asset if the conditions of the agreement are not met.

For instance, a rental property might be hypothecated as security for a mortgage that a bank issues. While the property is still being used as collateral, the bank has no rights to any rental income that accrues. If the landlord does not repay the loan, however, the bank may seize the property.

By putting up other assets as collateral, you can allay the worries of your lender and get your mortgage approved. Whether you are entering into a hypothecation agreement for commercial or residential investments, you do accept the possibility of losing your piece of collateral. As a result, if you are unable to pay back your lender, you must be ready to lose the asset.

When do hypothecation agreements come into play? 

The borrower and lender have a written agreement, not just a verbal one, regarding the hypothecation. Instead, it is accomplished through a document known as a hypothecation deed. A hypothecation agreement or letter outlines the conditions of the hypothecation and specifies the rights and liabilities of the parties to the agreement. In India, hypothecation is most frequently used to finance cars and motorcycles as well as commercial real estate. Hypothecation is frequently used when a debt needs to be secured and the creditor needs to reduce his risk by asking for some sort of security or collateral. Hypothecation is also widely used in consumer and business finance, as well as in the financial and investment industries. 

Hypothecation in investing

Hypothecation is extensively used for real estate investments. Commercial real estate investments frequently necessitate additional collateral from lenders. Because the loan payment is dependent on the success of a commercial business, these types of investments and properties can pose a higher risk. Depending on the perceived value of the investment location or type of property, the lender may request collateral with a higher monetary value. There are several reasons why you should use a hypothecation agreement rather than other types of agreements. The following are some of the reasons:

1. Reduction of down payment

A borrower’s down payment can be reduced by hypothecating an asset because the borrower is pledging a high-value asset to guarantee his loan, as opposed to a traditional mortgage, which uses loan-to-value ratios and credit score to vet a borrower. As a result, borrowers who choose to hypothecate an asset to secure a loan may be eligible for lower down payments, making it easier to secure financing.

2. Retain the title

Borrowers can keep the title, or total ownership rights, of their hypothecated assets. You don’t need to be concerned about a third party having the title to your asset if you are confident that you will be able to repay your loan.

3. Greater security for lenders

In high-risk loans, hypothecation gives lenders security, particularly in commercial mortgages where the loan payment is based on the success of a business.

Differences between pledges, mortgages, and hypothecations

A charge is created against the security of movable assets through hypothecation. The borrower still has ownership of the security. If the borrower defaults, the lender (the party to whom the goods or security have been hypothecated) will have to first take possession of the security before selling it. For instance, even though the borrower still owns the car or vehicle, the bank or financier is given hypothecation rights over it. In the event of a default by the borrower, the bank will take possession of the vehicle after following all legal procedures. Hypothecation typically includes loans against stock and debtors as well. Borrowers occasionally sell goods that have been hypothecated to banks without permission, in which case the banks may convert the goods into a pledge.

Pledge is used when the lender (pledgee) takes actual possession of assets (such as a certificate or goods). Pledge is a movable security, and the lender (the pledgee) retains possession of the security. In this case, the pledgee retains ownership of the goods until the borrower, fully pays the debt. The pledgee has the right to sell the goods in his possession in order to recoup any unpaid dues in the event that the borrower defaults. Loans against gold or jewelry, advances against stock or goods, advances against National Saving Certificates, etc. are a few examples of pledging.

A mortgage is an immovable security, which can be land, a building, a factory, or godown, or anything else that is permanently fastened to something else that is attached to the earth. The borrower usually retains possession of the security in the mortgage. Hypothecation is a movable security (e.g., stocks, accounts receivable, small machines, etc.), and the borrower retains possession of the security. Similar to the tenure of a vehicle, the tenure of hypothecation is typically shorter than the tenure of home mortgage loans and is renewable after a year or half-year. Mortgage loans typically have a tenure of 10 to 20 years, which is longer than loans against hypothecation.

Indian laws covering hypothecation

In the past, hypothecation was largely based on usage and practice and was not specifically defined by Indian law for a significant amount of time. Hypothecation is now referred to as “a charge in or upon any movable property, existing or future, created by a borrower in favor of a secured creditor without delivery of the movable property to such creditor, as a security for financial assistance, and includes floating charge and crystallization into fixed charge on movable property,” according to the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interests Act (SARFAESI).

Formalities for the creation of hypothecation

In a hypothecation, the security provider signs a “deed of hypothecation” in the favour of lender. The charge created by the hypothecation deed is governed by the terms of the document, which detail the powers and provisions protecting the lender’s interest. The hypothecation of a motor vehicle must be noted on the motor vehicle’s registration certificate.

Other requirements for hypothecation include payment of appropriate Stamp Duties based on state rates and, in the case of corporations, filing with ROC. It is mandatory to file creation, modification, or satisfaction of security interest in hypothecation of plant and machinery, stocks, book debts, and receivables after 2016 and the formation of CERSAI (under SARFAESI), the Central Registry of Securitisation and Asset Construction and Security Interest of India, a government body set up for such purpose.

How is hypothecation removed?

You can get rid of the hypothecation by repaying the entire loan amount. The bank will issue you a No Objection Certificate (NOC). This document will state that there are no outstanding dues. For the registration and insurance to be changed to your name rather than the bank’s, you can submit the copies to the Regional Transport Authority and the insurance provider.

Conclusion

By offering movable security as collateral, the borrower can raise money through hypothecation. Since the possession typically stays with the borrower, he or she can still use it. Because it gives the lender some security, the bank or financer will offer this loan (hypothecation) at a rate that is lower than an unsecured loan. However, the lender assumes some risk because there’s a chance the borrower will sometimes sell the hypothecated asset without telling them. The lender must conduct routine inspections, and the parties must include the necessary clauses in the hypothecation agreement to give both the borrower and the lender substantial protection.

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Nuveen Invests $30 Million for 30% Stake in Aviom India Housing Finance

Nuveen, an American investment manager, has invested $30 million in Aviom India Housing Finance for a 30% stake in the mortgage lender. The investment was made through a combination of primary and secondary market deals, with the primary investment size being $20 million. The deal was concluded on Wednesday.

Existing investor Gojo & Co and Capital 4 Development Asia Fund Cooperatief UA partly offloaded their holding, with Aviom’s managing director Kajal Ilmi refusing to comment on the valuation of her company and the shareholding structure post infusion.

According to people in the know, the promoter’s holding in the company comes down to 32% from 39%, while Gojo’s stake is reduced to 19% from 39%. C4D’s stake is reduced to 9% from 13%, and Sabre Partners AIF Trust’s current holding is 3%. The balance is held by other minority shareholders.

Aviom provides loans in the range of Rs 1 lakh to Rs 5 lakh for house construction, extension, and renovation. The New Delhi-based company has a network of 120 branches in 12 states, including Rajasthan, Madhya Pradesh, Uttar Pradesh, Punjab, Uttarakhand, Karnataka, Telangana, Andhra Pradesh, Tamil Nadu, Maharashtra, Gujarat, and Haryana.

The equity infusion would help Aviom extend financial assistance to over 60,000 families additionally in FY24 by disbursing around Rs 1200 crore, said Kajal Ilmi. She also added that the new equity investment would propel Aviom to grow 6x by 2026, and over the next six months, Aviom looks to increase its monthly disbursement to Rs 150 crore and will also add 50 more branches to its existing network.

Stephen Lee, senior director & head of Asia for Nuveen’s Private Equity Impact Investing team, said that Aviom and its leadership have disrupted micro-mortgage lending in India by catering to a hitherto underserved segment. “Nuveen seeks out innovative companies with transformative business models that solve real-world problems,” he said.

The lender has Rs 1050 crore of assets under management at present and a live customer base of around 50,000. It is also in the process of mobilizing Rs 1200 crore of debt. “We are in advanced stage of discussions with HDFC Bank, State Bank of India, DFC US, Blue Orchard, IIX Singapore fund, Japanese ASEAN Women Empowerment Fund for debt lines,” Ilmi said.

Home Loan Schemes of Bank of Maharashtra

You can apply for a home loan and select the best housing loan program for your needs with Bank of Maharashtra. For women and defense personnel, there is a 0.05% discount.

Interest Rate

7.80% p.a.

Processing Fee

Contact the bank

Prepayment Charges

Nil in case of floating home loan rates

Maximum Tenure

Up to 30 years

Rate Packages Available

Floating/Fixed

Interest Rate for Home Loans from Bank of Maharashtra in 2023

For loan up to Rs.30 lakh

 

CIBIL Score

Salaried

Non-Salaried

     

800 and above

8.00% p.a.

8.20% p.a.

750 to 799

8.40% p.a.

8.65% p.a.

700 to 749

8.70% p.a.

8.75% p.a.

650 to 699

9.00% p.a.

9.10% p.a.

600 to 649

9.05% p.a.

9.35% p.a.

Below 600

9.50% p.a.

9.85% p.a.

-1 to 5

8.90% p.a.

9.15% p.a.

 

For loan above Rs.30 lakh

 

CIBIL Score

Salaried

Non-Salaried

     

800 and above

8.00% p.a.

8.20% p.a.

750 to 799

8.40% p.a.

8.65% p.a.

700 to 749

8.70% p.a.

8.85% p.a.

650 to 699

9.05% p.a.

9.20% p.a.

600 to 649

9.10% p.a.

9.50% p.a.

Below 600

9.70% p.a.

10.20% p.a.

-1 to 5

9.05% p.a.

9.50% p.a.

Housing Loan Repair and Top Up Loan Repair/Renovation

For loan up to Rs.30 lakh

CIBIL Score

Salaried

Non-Salaried

     

750 and above

9.20% p.a.

9.45% p.a.

7700 to 749

9.20% p.a.

9.55% p.a.

650 to 699

9.45% p.a.

9.70% p.a.

600 to 649

9.55% p.a.

9.80% p.a.

Below 600

9.95% p.a.

10.20% p.a.

-1 to 5

9.45% p.a.

9.70% p.a.

For loan above Rs.30 lakh up to Rs.75 lakh

CIBIL Score

Salaried

Non-Salaried

     

750 and above

9.20% p.a.

9.55% p.a.

7700 to 749

9.20% p.a.

9.60% p.a.

650 to 699

9.45% p.a.

9.80% p.a.

600 to 649

9.55% p.a.

9.85% p.a.

Below 600

9.95% p.a.

10.20% p.a.

-1 to 5

9.45% p.a.

9.80% p.a.

The Bank of Maharashtra provides home loans with attractive interest rates beginning at 7.80% per annum.

Bank of Maharashtra Home Loans Schemes

Bank of Maharashtra offers a variety of home loan programs to meet the needs of its clients. The bank offers the following types of home loans:

  1. Maha Super Housing Loan Scheme for Construction
    • To build or purchase a brand-new or pre-existing apartment or house that is less than 30 years old.
    • For the purpose of extending your current home.
  2. Renovation Housing Loan 
    • For new, independent borrowers, the program is available for repairing, altering, or renovating an existing home or apartment.
    • 100% of the actual loan amount for repairs, alterations, or renovations, up to a maximum of 25% of the property’s marketable value as determined by the most recent valuation report, which cannot be older than three months.
    • Loan tenure of up to 20 years.
  3.  

Interest Rate

8.70% to 9.70% p.a.

Processing Fee

Contact the bank

  1. Maha Super Home Loan for Building and Plot Purchase
    • For the purpose of buying land and construction on it.
    • Construction of the house on the plot within a period of three years.
    • 70% of the registered plot value is being financed with loans.
    • The price of the plot shouldn’t be higher than 75% of the total cost of building the house.
    • You can apply along with a co-applicant.
    • Loan term of up to 30 years for repayment.
    • Home loans with floating rates don’t have prepayment or foreclosure penalties.
    • Home loan balance transfers are possible.
    • Two EMIs are waived for home loan borrowers who have made regular payments for at least 20 years (only for new sanctions).
  2. Top-up Home Loan
    • Scheme for current Bank of Maharashtra home loan borrowers.
    • For takeover or balance transfer of home loan of other banks and an additional benefit of top-up loan for repairs/furnishing/renovation of your house. 
    • There is no upper age limit as long as the loan term does not exceed the loan maturity date of the mortgage being topped up. 
    • Existing customers should not have a Loan-to-Value (LTV) ratio of more than 75% or a loan amount equal to 100% of the estimated cost of repairing, furnishing, or renovating their home.
    • The maximum top-up loan under this scheme is up to the overall LTV is equivalent or less than 75% based on the most recent valuation report, which is not longer than three months or 100% of the estimated cost of repair/renovation/furnishing/extension of your house, whichever is lower.
  3. Maha Combo Home Loan Scheme 
    • combo loan for a car and a house.
    • Home loan for contruction, buying, or expanding a new or existing home or apartment.
    • vehicle loan for a new four-wheeler.
    • Those who have worked as permanent employees for one year in the current fiscal year in Central/State Government, PSUs, or reputable businesses are eligible.
    • Individuals in the business world who are self-employed and have two IT returns proving a consistent source of income are also eligible.
    • For salaried individuals, a housing loan amount of up to 60 times your gross salary or 75 times your net monthly salary, whichever is higher.
    • According to IT returns for self-employed people, housing loans can be up to five times the average income of the previous two years.
    • If you are a salaried person, you may borrow up to 24 times your net monthly salary as a car loan.
    • Up to two times the average annual income calculated using the most recent IT returns for the previous two years, or two times the gross taxable income.
    • Processing fees for combo loans of 0.15% of the loan amount, up to a maximum of Rs. 25,000.
    • processing fees waived for female borrowers.
  4. Loan Against Self-Occupied Property
    • offered to people who have a building or self-occupied, commercial property in their name for a minimum of one year.
    • Permanent employees of Central/State Government, PSUs (including schools, colleges, and educational institutions), reputable businesses, MNCs, professionals, and self-employed people with a minimum of two years’ experience are eligible.
    • Loans against privately owned property, vacant land, and rental property are prohibited.
    • For properties located in urban areas, the loan amount ranges from Rs. 2 lakh to Rs. 3 crore, while it is Rs. 1 crore for properties located in other centers.
  5. Loan Against Property
    • The annual income must be at least Rs. 5 lakh.
    • Security must be provided.
    • A loan of 1% of the loan sum plus GST is required.

Bank of Maharashtra Home Loan EMI Calculator

Use the Bank of Maharashtra Home Loan EMI calculator to determine the Equated Monthly Instalment (EMI) due on your mortgage. The minimum EMI is Rs. 776 per lakh.

On the home loan EMI calculator, enter the necessary data, such as the interest rate, loan amount, loan tenure, and processing fee, and then click Calculate. You will be redirected to a new page where you can see how the total amount due is divided up along with the total amount of interest owed and the monthly installments (EMIs) due for the duration of the loan.

 

Home Loan Eligibility Criteria

Salaried

Self-Employed

• A permanent employment in the current Central/State Government/PSU/Reputable Private Sector Company for a minimum of one year.

• A maximum of 60 years old and a minimum age restriction of 21 years.

• Independent contractors, entrepreneurs, retirees (providing they have a pension account with the Bank of Maharashtra and enough disposable income), and farmers with a minimum irrigated land holding of 5 acres and enough disposable income.

• The age restriction is 60 years for everyone else and 21 years for doctors, architects, CAs, etc.

Required Documents for All Home Loan Applications with Bank of Maharashtra

The following paperwork must be submitted to Bank of Maharashtra in order to apply for a home loan:

For Salaried:

  • Proof of identity.
  • Proof of address.
  • PAN (Permanent Account Number) card copy.
  • Proof of income:
    • Last 1-year IT(Income Tax) Returns.
    • Form 16.
    • Last three months’ salary slips.
    • Last six months’ bank statement.

For Self-Employed:

  • Proof of identity.
  • Proof of address.
  • PAN card copy.
  • Proof of income:
    • Last two years IT returns.
    • Audited Balance Sheet.
    • Last 12 months bank statement.

For Agriculturalists:

  • You must submit an income certificate signed by a Tahsildar, Mandal Revenue Officer, or Revenue Department Officer with State Level Gazetted rank if you are not filing income tax returns.

Property Documents:

  • The buyer (loan applicant) and seller have a registered purchase agreement.
  • receipts from prior payments made to the seller.
  • A copy of the approved building plan or sanctioned plan.
  • detailed quote from the architect or engineer.
  • Developmental agreement.
  • Plan approved for the flat scheme.
  • Copies of the property’s title documents that the owner has:
    • Sale Deed/Partition Deed/Gift Deed/Lease Deed/Allotment Deed of the plot.
    • Property extract such as 7/12 extract or extract of property register card of city survey (Akhiv Patrika).
    • N.A. permission, if originally agricultural property.
    • Paid receipt of latest maintenance, water tax, municipal tax and any such taxes in the name of the loan applicant.
    • If the plot is owned by the society, No Objection Certificate (NOC) for the mortgage of plot and construction thereon.
    • Copy of Power of Attorney given by the landlord in favour of the developer or the builder.
    • Registered Agreement of sale conveying undivided share and stages of payment or Tripartite agreement.
    • Non encumbrance letter from co-operative society.
    • No Objection Certificate (NOC) from the society for a mortgage.
    • Non-encumbrance certificate, both before and after the sale (wherever applicable).

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