Structured Schemes Hit the Mumbai Property Market

Home Buyers in Mumbai, Thane and Navi Mumbai have never had better days, the market is ripe with Structured Schemes. Every few days you see large advertisements and hoardings with 10-20-10, 25-75, 20-80, 10-90-10 and even 5-90-5 schemes.

These schemes are to lure the fencer sitter buyer to get him out with a minimum down payment from his own side which typically means no hit to the Buyers Liquidity and much safer transactions because the Banks are involved in the transactions.

We have been reiterating this again and again, that one must take even the smallest exposure of a Bank Loan, as the Bank does the due diligence for the property and since the payment to the Banks are construction linked, the accountability quotient is far higher.

These schemes are actually a boon for the Buyer because he does not have to shell out a lot of cash from his own pocket and hence the ROI is far higher. Also, for home buyers who are presently on lease, get a lot of respite as they are able to continue staying in the rented flat in case the scheme provisions for interest bearing by the developer.

One has to understand all these schemes thoroughly and read the fine print and then take a call. A lot of time it is also seen, that the Developer has offered the Structured Scheme but he has raised the prices and then you should ask for both the Structured Scheme and Construction Linked Plan (CLP) to ascertain the difference in the pricing and the scheme benefits.

For any further understanding on these Structured Schemes, please call me on 9820030685 – ssadh@mumbaipropertyexchange.com

Construction Linked 20:80 Schemes back in the Market

The 20:80 Subvention Schemes are back in the market with a full force with Top Builders wanting traction in the Projects. It is a win win situation for all, but this time purely the consumer is the winner, if the Developer has not put the entire burden on the Client.

Till Mid 2013, the 20:80 subvention scheme meant that the Developers could get 80% of the Total Consideration Value of each flat sold funded in advance from the Bank and the developer would service the Pre-EMI till Possession or till the time he has opted for. The RBI put a stop to this, seeing irregularity and the risks involved if the Developer would take all the money upfront and leverage against other property funding etc.

The Home Buyers were at an absolute benefit in such schemes and since the time it stopped, the Mumbai Property Market saw less traction.

In December 2014, suddenly, we see an increased Traction in the Property Market owing to the New 20:70, 25:75 and 30:70 Schemes. The Banks who are funding these projects are working strictly as per the RBI Policies, where in they will give to the Developer funding which is Construction Linked. They will only be able to get funds from the Bank once they complete a slab and mostly Top Developers qualify for most of these schemes.

This is again very good for Home Buyers or Investors as by putting their own 20 to 30% amount they are not investing any more and then the rest of EMI starts at the time of Possession. At the time of Possession, one can close the loan and pay with own funding depending on each individuals needs.

Also, the Buyers Risk for delayed possession gets mitigated under such schemes.

As per an estimate there are currently 15-20 such schemes in the market. Please feel free to call us or mail us for more information.

Author – Sandeep Sadh – Mumbai Property Exchange Pvt Ltd.

Must Take Bank Loan for Buying Property

For any Home Buyer or Investor, a Property Transaction is one of the most costliest thing he or she acquires.  I very often say to my clients, a good real estate investment is like a Son of the Family as a good property gives you constant lease rental returns and capital appreciation.

Now, coming back to my Title – Must take Bank Loan for Buying Property.

Why do i say this, i say this, because, i feel very comfortable when a Bank is involved in a transaction and they do their paper work along with the Buyers Lawyers or in the event the Buyer has introduced a Lawyer in the deal, then at least the back up Bank is there to take care of the preliminary paper work, without which they wont give a loan.

Even if the loan is for a small amount, it is always advisable to get a Bank Loan. You may also get a small Tax deduction and your documents are in safe custody of the Bank and you are not worrying about having them at Home or Locker.

Sandeep Sadh

CEO – Mumbai Property Exchange.com