A Borrower’s Checklist for a Home Loan in a Metro City of India
A house in a metropolitan city in India is a dream for every person from tier 2, tier 3 cities, and the countryside. Traditional metro cities in India are Delhi, Mumbai, Kolkata, and Chennai.
An increase in population, urbanization, purchasing power index, etc., have blossomed several new and upcoming metro cities. A new breed of cities that roughly fits into the definition of metro cities are Bengaluru, Hyderabad, Ahmedabad, Surat, Pune, Nagpur, etc.
Several satellite cities have sprung up around metro cities such as Gurugram and Noida around Delhi, Navi Mumbai near Mumbai.
A home in a metro city is a symbol of social upliftment and psychological superiority. Metro cities are expensive. On average you need to pay between ten thousand to fifteen thousand rupees a month for a decent home.
If you bought or construct a home, there will be more than a lakh rupee of saving per year that can be paid as EMIs for a home loan.
Approach a loan distributor or a bank and apply for a home loan for an abode in one of the metro cities in India. Before filling application and applying, you must prepare a checklist and be ready with all the information & required documents
We will begin the blog with the definition of a metro city in India and continue with the borrower’s checklist for a hassle-free home loan application and processing.
What is Metropolitan City in India?
The Census Commission of India has defined the metropolitan city as a city with a population of more than ten lakhs. In addition, a city with more than one crore population is known as a megacity.
Delhi, Mumbai, Chennai, and Kolkata can be considered megacities as per the definition. In 2014, prominent Tier 2 cities Pune, Hyderabad, Bengaluru, and Ahmedabad have morphed into the list of metro cities.
Checklist for Borrowers
Priority Sector Lending
Reserve Bank of India gave a much-required impetus for homebuyers in metro cities through priority sector lending. According to the guidelines, home loans of up to 35 lakhs will be counted as priority sector lending.
Banks and Loan distributors offer cheaper home loan interest rates for PSL. The move came as a support for people looking for a low-cost home in metro cities.
RBI clarified further that the overall cost of the property in the metropolitan city should not exceed forty-five lakhs for being considered as PSL.
Contact your lender and ask about property eligibility for priority sector lending. This is a vital point to check because you could get attractive interest rates under PSL.
Pros and Cons of owning a home in a Metro city of India
Pros of a home in a Metro City
- A home in a metro will save your rent and living costs. Take a home loan from a reputable loan distributor and pay EMI with the saving on the rent.
- Indian real estate is booming, and metro cities are expanding from all corners. Delhi NCR includes cities such as Noida, Greater Noida, Ghaziabad, Gurugram, Faridabad, etc., and Mumbai Metropolitan Area includes Thane, Kalyan, Navi Mumbai, and others.
- This expansion will boost your property value. So, it is advisable to select the best location in the metro and initiate a home loan application at the earliest to reap the maximum benefits of real estate’s favourable momentum.
- You will find the latest and best technological, educational, and career opportunities in a metro city. Businesses and educational institutes set their offices, factories, and campus first in big cities of any country. So, if you take a home loan for buying or building a home in a metro city, you are going to enjoy the best living style, education, and everything.
Cons of a home in a Metro City
- The Government of India and RBI are taking necessary steps to make housing affordable for everyone through PMAY House loans, Priority Sector Lending, and other schemes.
- The people who are not eligible for these schemes face higher interest rates for home loans in India.
- Longer loan tenure and higher interest rates cause more payment than the original loan amount.
- Cost of living and pollution are few problems that also need to consider before applying for a home loan to make a dream abode in your favorite metro city of India.
Standard Things to Consider in the Checklist
There are certain things to consider for home loans, irrespective of cities and villages.
Credit score
Maintain a healthy credit score between 700 to 800. A good credit score improves your chances of home loan approval.
Long-term Financial Planning
Home loan tenure extends up to thirty years. The EMIs for home loans are a long-term financial commitment. Consider your source of income, arrange scope for margin money, emergency fund, etc., avoid any financial surprises during the advanced phase of the home loan tenure.
Liabilities and Commitments
We all have liabilities and responsibilities of different nature. At the time of application, consider all the probable expenses in future such as weddings, education, medical emergencies, etc.
Home Loan Comparison
Never go for the first bank or loan distributor you come across on the web, through a network
or social channels. Use online platforms for comparing several home loan offers and decide the best one as per your requirements & budget.
Concluding Thoughts
A house in a metro is an achievement for most of us in India. But do not decide in hurry for a home loan.
Refer to the passage, consider all the points, and after complete satisfaction, go to the house loan application stage. Keep all the documents at hand for faster form submission.
