Rupee slide: Should NRIs buy houses in India now?

With the rupee touching all time lows against the dollar, it appears to be a great time for Non Resident Indians (NRIs) to remit funds to India for investment. And for most NRIs, the preferred asset class continues to be real estate. But with the India story looking a little bleak, is property a good investment right now?

The answer is yes, provided you are patient and cautious. "There has been price correction in India to a certain extent and developers are sitting on huge inventory. However, I estimate that the entire correction will take up to 2 years. So NRIs must be particular in their investments and pick and choose after due research," says Pankaj Kapoor, Founder and Managing Director at Liases Foras Real Estate Rating & Research Pvt Ltd.

So if you are ready to take that challenging road, here are a few tips to help you along the way.

Top locations and price points

"In the last few months, we have witnessed good closures specifically emerging from NRIs in cities where value deals are available - namely cities like Bangalore, Hyderabad, Chennai and Pune. Demand in the mid-income and budget segments is robust across cities where job creation is the key driver. In light of the rupee's depreciation, we are confident that the IT/ITeS sector will generate further job creation and strengthen the confidence of employees from this sector who are aspiring to buy first or second homes," says Om Ahuja - CEO - Residential Services, Jones Lang LaSalle India.

Kapoor adds, "In the Mumbai Metropolitan Region and the National Capital Region, the secondary market is appearing very attractive. Investors are exiting these markets and in the past 15 days, prices have corrected up to 25% in some of the cities. So this might be a good time to pick up investor's stock. Apart from these two key regions, properties in cities like Hyderabad and Kochi are undervalued and it may be a good time to look at these places."

According to Ahuja, the segment where good demand is being witnessed is in the price range of Rs 60 lakh to Rs 1.5 crore.

Investment time horizon and returns

Here is where investors need to be patient. "I think the price correction is going to go on for another 2 years," Kapoor explains, "which means investors should expect their asset value to remain more or less flat over the next two years."

Ahuja expects potential returns from current levels to be 10-20% annualized returns over 6-8 years in Bangalore, Chennai, Pune, Gurgaon and Navi Mumbai and 20-30% in Hyderabad.

Tips to buy the right property

Buying property in a market like this can be quite challenging. So here are some parameters that you should look at:

i. Rental yield

Rental yield is nothing but the annual rent divided by the property value. "Often, buyers tend to ignore rental yield and instead focus only on capital appreciation. However, rental yield is a very important parameter as it represents productivity of the price. When you buy a property, make sure that you can get a rental yield of at least 3.5-4%. An yield of less than that means the property is overvalued," Kapoor explains.

ii. Months of inventory

Months of inventory is specific to a particular project and is the amount of time the developer takes to sell all available units at the current price.

"An efficient market maintains 8-10 months of inventory. A longer time means that units are not selling at current price and a price correction may happen. Today, Mumbai and NCR carry 44 months of inventory on an average while Bangalore carries 12 months. So this is another aspect you can check to see how inventory is moving," says Kapoor.

iii. Location

"Right now, a lot of investors are exiting the market so NRIs might find many investor held property up for sale. However, a lot of these investor properties may be in uninhabited markets where the investor may have purchased the property thinking that the area would develop but expected development may not have happened. NRIs need to be wary of such locations," Kapoor explains.

iv. Developer track record

"Developers' track record in terms of delivery and quality must be verified before investing. Ensure that all approvals in place. Attractive advertisements with celebrity endorsements and futuristic promises should not be the only factor for shortlisting the project for investment. NRIs very often get carried away with good sales pitches and so-called 'premium projects'. NRIs should also be very cautious when it comes to investing with developers who are over leveraged and carry risk of project not getting completed on time," Ahuja cautions.

Infact, Kapoor suggests that now may not be a good time to opt for launch properties. "Instead, opting for secondary properties might be a good option at this point. Buying secondary properties has its own advantages. Apart from being well priced, there is no execution risk as the property is already completed. Further, there is no service tax so NRIs can save on that as well," he says.

To sum up

So while there are buying opportunities in the current market, experts suggest that NRIs tread with caution. Don't jump on deals but do a thorough research before investing.

source:- http://articles.economictimes.indiatimes.com/2013-09-06/news/41835246_1_nris-rental-yield-job-creation

Know About the Most Expensive Houses in the World

Human beings have been living in the comfort of their houses since the late Neolithic Era. They have used it for starting their daily activities, safety, relaxation, and family union. The home is also the silent spectator of happy times and bad moments in a person or family's life. Somehow, your residence becomes a part of you, and stores many sweet and unpleasant memories of your life.

A sweet home is also a dream for many, and a part of their struggles in life to earn sufficient money to build a roof over their head someday in the near future. But, for many, owning a grandeur luxury house is a status symbol inconsistent to their massive popularity, celebrity status, and immense wealth. They spend a fortune in building or buying a high rise condominium, beach home, mansion, penthouse, vast ranch, palace or grand estate. These luxury residences have few exceptional qualities and specialties such as the best location and neighborhood, finish and decor, amenities, size and views, and architectural significance and grandeur among others.

Owning a lush and plush house may be a dream for many, but there are also millionaires and billionaires who spend millions to build it. People look with awe at their architectural splendors, massive sizes, and amenities. Forbes 29th March, 2013 list "The World's Most Expensive Billionaire Homes" features 20 most expensive houses in the world and the top 5 from the list are as under:

1. Antilia, Mumbai, India
2. Villa Leopolda, Villefranche-sur-Mer, France
3. Fair Field, Sagaponack, New York
4. One Hyde Park Penthouse, London, U.K.
5. Hearst Mansion, Beverly Hills,

Antila is owned by Mukesh Ambani, who is worth $21.5 billion. The massive twenty-seven stories skyscraper residence is spread in the 400,000-square foot, and consists of a 'health' level, three helicopter pads, and six underground levels of parking. Ambani spent more than $1 billion for its construction.

Villa Leopolda is located in the town of Villefranche-sur-Mer on the French Riviera, France, and owned by Lily Safra, whose net worth is $1.2 billion. The Villa is spread in 20-acre and valued at $750 million (500 million euro).

Fair Field estate is situated in Sagaponack, New York and owned by Ira Rennert, whose net worth is estimated at $6.5 billion. The estate is spread on 63 acres and named after adjacent Fairfield Pond. It is valued about $248 million and consists of 39-bathrooms, 29-bedrooms, three swimming pools, squash and tennis courts.

Kensington Palace Gardens, London, U.K is owned by the Indian born steel magnate Lakshmi Mittal, who is worth $16.5 billion. The purchase price at the time of buying in 2008 was $222 million.

One Hyde Park, London, U.K is owned by Rinat Akhmetov, Ukraine's richest man with net worth of $15.4 billion. In 2011, the sale price of the house was $221 million. The place is spread in 25,000-square feet, and features 24-hour hotel concierge service and bullet proof glass.

Forbes list also include other most expensive and equally famous homes in the world including Blossom Estate, Palm Beach in Florida, Xanadu 2.0, Seattle in Washington, Mountain Home Road in Woodside, California, Further Lane de Menil in East Hampton, New York, Silicon Valley Mansion in Los Altos Hills, California, and Broken O Ranch in Augusta, Montana. All these magnificent houses are owned by billionaires and worth millions. These billionaire's residences also display owner's affluence, tastes for comfortable living, superior status, and lavish lifestyle.

You can browse most expensive houses on the Celeb Worth most expensive page. In addition to houses, the archive will also provide you information on most expensive shoe brands, coffins, cruise ships, pokemon cards, and private jet - Airbus A380.

Article Source: http://EzineArticles.com/7977612

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Real Estate Articles - Does Buying Property Secures Your Future - Amazines.com Article Search Engine Residential Proeprty, Flats, Apartments in Gurgaon

Articles on property on rent finding the perfect rental property

Finding the perfect rental property is a herculean task especially when you are looking it as an investment option. It is daunting for first time investors and therefore one should be extremely cautious while taking a property investment decision. One step wrong and there goes your dreams obliterated. The idea is not to scare you but to help you search the best one.

Where? How? What?When?

Where is a big question that comes to your mind first when your give property investment a thought. Well, talking about the major cities in India we find Gurgaon as one of the suitable destinations. Gurgaon needs no introduction when we talk about development of residential or commercial projects. The other way of saying the same can be that rapid commercial development has influenced growth of residential projects in Gurgaon. A majority of real estate investors have set Gurgaon as their first preference when it comes to investment in real estate. It definitely is one of the most desirable places. There are constructions of all types happening in Gurgaon. Years back the area was famous for farm houses. It is still one of the favoured spot but now residential and commercial properties are in high demand. You will find a lot of properties on rent in Gurgaon. So the question of WHERE to find the right property ends here.

How comes next? Though the most preferred technique is to go for a real estate expert but we suggest you to search for a rental property on your own. Explore the potential area and learn about the pros and cons of the area on your own. Having an agent can bring unnecessary pressure to buy before you have found a property that suits you. The most important thing is to have an unbiased approach to the rental properties within your investing range. Of course after you are done with your homework you can go and seek advice of the expert too. There is no harm in seeking a second opinion. So we guess “how” will not bother you anymore.

What? Couple of things to keep in mind while planning to go for a rental property. The first one is the Neighbourhood. A good neighbourhood will only add to the value of your property and you will easily get tenants for it. Second point is safety. Even if you get the best rates to invest in , you must check the security measures there. A safe house is better that a lavish one. Amenities are the next most sought after things when one plans to choose an accommodation. Nearby recreational areas, malls, food courts, cafeterias and hospitals and all the other perks attract tenants. Besides these back up facility, resident welfare associations and other such needs can also be given a thought.

Now when to buy a property that can be put on rent?

Our answer to the question is that when you feel that you are financially secure then. If you talk about Gurgaon, the past trends reflect that this place is a goldmine. So buying a flat for renting purposes in Gurgaon is anytime profitable. The demand supply graph in terms of Properties on rent in Gurgaon is always linear and on rise. Don’t forget to check out do a market research before you plan the deal. The real picture is always better.

So whenever you plan to invest in a rental property you must ask yourselves the questions above and do footwork and research before closing the deal. It is not just about buying a rental property but it is about investment in the right direction to have maximum annual returns. We suggest you to choose the rental property with a thought that you will reside in it and believe us you will never go wrong.

source:- http://www.amazines.com/article_detail.cfm/5791100?articleid=5791100&title=rent%2Ca%2Cflat%2Cin%2Cgurgaon%2Crental%2Cproperties%2Cin%2Cgurgaon%2Cproperties%2Con%2Crent%2Cin%2Cgurgaon%2Crental%2Cproperties%2Cin%2Cgurgaon%2Cproperties%2Con%2Crent%2Cin%2Cgurgaon

Residential Property in Gurgaon

Sudden Burst of Residential Activity in an Overlooked Slice of TriBeCa

The area of lower Broadway south of Canal Street in Manhattan has long been characterized by nondescript discount stores and lunchtime counters packed with city workers. It has been mostly ignored by the wave of gentrification to the west that has flooded TriBeCa over the last decade, bringing with it baby carriages, designer boutiques and restaurants.

“Along Broadway has always been the funkier part of TriBeCa where you can still find artists,” said Erik Torkells, the editor of the Tribeca Citizen, a neighborhood Web site. “People call it Chibeca because of its proximity to Chinatown.”

This may be about to change. On a four-block stretch of Broadway, between Worth and Walker Streets, nine new residential projects are in the works, bringing more than 430 new condominium units to the area. The burst in activity is largely because of a booming condominium market and insatiable demand for downtown luxury apartments that is rapidly encroaching on commercial spaces and transforming old office towers.

In the second quarter this year, the average condominium price in TriBeCa reached $1,583 a square foot, nearly 17 percent higher than the $1,354 a square foot posted last year during the similar period, according to data from the appraisal firm Miller Samuel. The median sales price in the neighborhood was $2.75 million in the second quarter, a significant premium over the $1.25 million for all of Manhattan, according to the firm. Land prices for development sites have followed, averaging as much as $500 a buildable square foot in TriBeCa, up from just $300 a buildable square foot two years ago, brokers said.

“With prices approaching $2,000 a square foot or better in TriBeCa, it is encouraging the expansion of the core of the neighborhood to adjacent areas like Broadway,” said Daniel Fasulo, a managing director at Real Capital Analytics, a research firm. “The amount of deal-making in the neighborhood is astounding.”

By the start of winter, the first buyers will move in to 93 Worth Street, a 92-unit condominium that features a dog-washing station and a roof-deck terrace. The 18-story building has had swift demand from buyers, with just nine apartments remaining, including four penthouses that are yet to be put on the market. The average sale price is $1,700 a square foot, according to Eldad Blaustein, the chief executive of IGI USA, the building’s developer.

“This is a brand-new Broadway corridor,” said Doron Zwickel, an associate real estate broker at Core, which is marketing the building. “Historically, this hasn’t been prime TriBeCa, but it is becoming more desirable.”

One draw has actually been that the building is outside the core of the neighborhood, and not in the flood zone that saw so much damage during Hurricane Sandy last year. “After the storm, we got a lot of interest from people close to the water who wanted to be in the neighborhood but didn’t want to have the risks,” Mr. Zwickel said.

On Leonard Street one block to the south, two buildings are rising: 350 Broadway, a 12-story former office tower, is being converted into a 66-unit condominium. Bizzi & Partners Development, which built the Setai Fifth Avenue in Midtown, began sales in July, and the building, called 101 Leonard, is more than 60 percent sold. At 346 Broadway, the Miami-based developer Don Peebles is planning a $350 million renovation to convert the building, which was used by the New York City Criminal Court, into roughly 200 condominium units and a hotel. It acquired the 13-story building in March from the City of New York for $160 million.

At Broadway and Franklin Street, the developer El Ad is planning the Franklin, a 53-unit condo complex with amenities like a children’s playroom and a rooftop pool. The building has gone through a number of failed conversion plans, perhaps most notoriously in 2006, when the Dutch architect Ben van Berkel designed a 20-story apartment building, with glass elevators and a facade of black metal bands. Those plans fell apart during the recession, and El Ad eventually acquired the site.
The Franklin “is the fastest-selling building I’ve ever had,” said Richard Cantor, a principal at the brokerage firm Cantor Pecorella, which is overseeing the marketing. Since sales began in May, 48 of the 53 apartments are in contract. Originally, the units were priced at $1,350 a square foot, but they were later raised to $1,550 and then $1,650. “Now, by the time we sell out, the prices will be closer to $1,800 a foot; we just sold the largest penthouse for $10 million, or just under $2,700 a foot,” Mr. Cantor said.

There are also a number of small boutique buildings in the works. The Keystone Group acquired 391 Broadway, a commercial building, eight months ago and is converting it into four residential floor-through lofts with retail space on the ground floor. “With TriBeCa the way it is, there is not enough product for all of the demand, so the neighborhood keeps being pushed eastward,” said Daniel Martin, a managing director at Keystone Group. It hopes to complete the project by May.

At 372 Broadway, which is being renamed 6 Cortlandt Alley for the street it abuts, developers are getting approvals to build a five-unit condominium, with sales beginning in the spring. At 361 Broadway, the Japanese architect Shigeru Ban is designing 13 condominium units, including a set of glass duplex penthouses that will be affixed atop the six-story cast-iron building. The plans were approved last year, and construction is set to begin as early as next month, said Dean Maltz, the building’s executive architect based in New York.

Another possible development could come at 360 Broadway, where the real estate investor Waterbridge Capital recently acquired the building for $23 million. Calls to the chief executive, Joel Schreiber, were not returned.

“I’ve done a number of sales on the SoHo side of Broadway, and it seems to me a very natural progression to develop the area below Canal Street,” said Susan Wires, a broker at the brokerage firm Stribling & Associates, which is marketing 6 Cortlandt Alley with her partner, Leila Yusuf. “So many of the buildings that are coming to this area are large-scale, but ours will be really intimate and boutique, something that is missing in the marketplace right now.”

With such a strong condominium market, the land prices for development sites have also skyrocketed. “If you compare where prices are today from 2010, it has gone way up,” said Nick Petkoff, the director of sales at the brokerage firm Massey Knakal Realty Services.

When Mr. Blaustein acquired 93 Worth Street in 2010, for example, he paid roughly $300 a buildable square foot. “Now, if you are buying buildings to convert, they are costing $500 to $550 a square foot,” he said. “We would love to buy more buildings in the neighborhood, but the competition has become fierce.”

The demand for development sites is a key reason that the owners of 396 Broadway have put the vacant building on the market for $37 million, rather then push ahead with plans to convert it into a 50-unit rental building. “We have approved plans for a residential conversion, and an alternative plan for a hotel,” said Gene Kaufman, the project’s architect. “But the owners right now see that the property is a lot more valuable than it once was, and so it is reasonable that they pause and rethink it, given that the circumstances have improved for the better.”

But while there has been many residential developments, retail activity in the neighborhood remains lackluster. “Retail hasn’t happened yet, it is all very embryonic,” said Roger E. Eulau, an executive managing director at the Lansco Corporation, a retail brokerage firm. Rents are around $100 to $150 a square foot, compared with as much as $1,000 a square foot on Broadway in SoHo, he said.

Still, “we feel that Broadway is going to be a natural gateway that links the Fulton Street Transit hub and the World Trade Center to SoHo, it is a natural thoroughfare for retail,” said Mr. Martin of the Keystone Group. “We are very bullish about this neighborhood’s future.”

source:- http://www.nytimes.com/2013/08/28/realestate/commercial/a-sudden-burst-of-residential-activity-in-tribeca.html?pagewanted=2&_r=0

http://www.sreindia.in/subvention-scheme-gurgaon.php

Credai against linking of home loans to construction stages

MUMBAI: Criticising the Reserve Bank's decision to link disbursal of home loans to stages of construction, real estate apex body Credai said the move will harm developer sentiment and disturb business plans.

RBI today asked banks to link the disbursal of home loans to stages of construction to protect the interests of buyers and contain the fallout of "innovative" housing financing schemes.

It has directed banks that upfront disbursal "should not be made in cases of incomplete/under-construction/ green field housing projects".

Confederation of Real Estate Developers' Associations chairman Lalit Kumar Jain said: "Housing finance institutions or banks normally safeguard their interest while devising such instruments. Abruptly issuing such circulars, advising bank against established practices only harm the sentiment and disrupts business plans. This will create setback for projects, affecting the end consumers."

The notification follows the introduction by some banks of "innovative housing loan schemes" in association with developers or builders, where upfront disbursal of housing loans is made to builders without being linked to the various stages of construction.

Also, under such schemes, the interest/EMI on the housing loan availed of by the individual borrower is serviced by the builder during the construction period. These loan products, the RBI said, are popularly known by names such as 80:20 and 75:25 schemes.

RBI said such home loan products are likely to expose banks and their borrowers to additional risks.

"RBI should have consulted stakeholders before issuing such circulars on disbanding current practices. In the past, the RBI circulars have resulted in reversal of good market sentiments affecting economy and concerning housing sector," he added.

source:- http://economictimes.indiatimes.com/markets/real-estate/news/credai-against-linking-of-home-loans-to-construction-stages/articleshow/22264351.cms

CCEA clears 2 proposals for housing for the poor

NEW DELHI: Government today cleared two proposals for providing affordable housing to the urban poor and provide them with self-employment and skilled wage employment opportunities to help reduce poverty. 

The Cabinet Committee on Economic Affairs(CCEA) today approved the launch of Rajiv Awas Yojana (RAY) as a centrally- sponsored scheme (CSS) to be implemented in mission mode during 2013-2022 and also continuation of Affordable Housing in Partnership Scheme (AHP) as part of RAY with amendments. 

The CCEA also approved the proposal for restructuring of the centrally-sponsored scheme of Swarna Jayanti Shahari Rozgar Yojana (SJSRY) in the 12th Plan and as the National Urban Livelihoods Mission (NULM) with an allocation of about Rs 6,405 crore. 

The NULM Mission is to reduce poverty and vulnerability of urban poor households by enabling them to access gainful self-employment and skilled wage employment opportunities, resulting in an appreciable improvement in their livelihoods on a sustainable basis through building strong grassroot-level institutions of the poor. 

The mission would also aim at providing shelter equipped with essential services to the urban homeless in a phased manner. It will also address livelihood concerns of urban street vendors by facilitating access to suitable spaces, institutional credit, social security and skills to urban street vendors for accessing emerging market opportunities. 

It was decided to continue the Interest Subsidy Scheme for Housing the Urban Poor and rechristen it as the Rajiv Rinn Yojana. This will be implemented as a stand-alone central sector scheme. The Planning Commission has allocated Rs 32,230 crore for RAY during the 12th Plan. 

The RAY will provide support to states/union territories and central government agencies for providing housing, including rental and transit housing, development/improvement of basic civic and social infrastructure and operation and maintenance of assets created under the scheme. RAY will cover all cities and towns, the selection of which will be made by the states in consultation with the Centre.

sourcehttp://economictimes.indiatimes.com/news/economy/policy/ccea-clears-2-proposals-for-housing-for-the-poor/articleshow/22267193.cms

New supplies, resellers to bring down home prices

BANGALORE/MUMBAI: If you have been waiting to buy a home, this could be your chance for some bargain hunting as nearly five lakh apartments are expected to be delivered this year, shaking up an already oversupplied home market and forcing investors to sell them in a hurry.

"The widening demand supply gap will help prices fall further," says Pankaj Kapoor, managing director of Liases Foras, a property research firm, which supplies market data to banks and industry.

ET reported on Monday that property prices have begun to soften around the country and builders have started to offer discounts as high as 10% in some cases. According to the National Housing Bank's (NHB) residential housing index Residex, 22 of the 26 cities it tracks have seen a decline in home prices between 1% and 5% in the April to June quarter.

While builders under pressure have started offering discounts, an even better opportunity is emerging in the secondary-resale market where over-leveraged investors who had picked up properties over the last few years are willing to offload their inventory at discounts as high as 30%.

The advantage for a home buyer is that several of these apartments that investors are selling in cities like Gurgaon, Noida, Mumbai, Bangalore and others, will be delivered in 2013, so the wait for your dream home could become much shorter.

Many investors who are already sitting on ready-to-move-in properties are also exiting at discounts for want of funds and the fear of a further correction.

Amit Bansal, who runs a chemicals business and has been investing his business surplus into real estate, sold a 2,400 sq ft apartment in Emaar MGF's Palm Terraces Select on Golf Road Extension in Gurgaon for Rs 8,300 sq ft fearing a drop in prices in the current market. Just a few months back he was getting offers of Rs 8,600 per sq ft for the same apartment.

For the end-user who bought the apartment, the price was a decent bargain, of over 40%, considering the developer's price is around Rs 12,000 per sq ft. For Bansal too, it was a more than profitable exit as he had invested at a much lower price point.

In Mumbai, an investor is selling an apartment in a project called Dheeraj Celestial in Bandra for Rs 55,000 per sq ft while the builder is selling it at Rs 70,000 per sq ft.

In south Kolkata's Topsia First lane, Mohammad Rafique bought a 1,100 sq ft apartment for Rs 2,500 per sq ft in 2007. While the developer's rate is Rs 4,500 per sq ft in the same project today, Rafique sold it for Rs 4,000 per sq ft.

In search of liquidity, Prabhakar D, who bought a property in Channasandra in the eastern periphery of Bangalore, is selling an apartment that he got for Rs 36 lakh for Rs 50 lakh. The market price of the apartment is around Rs 70 lakh. "The response has been overwhelming," says Prabhakar.
Such investors abound in cities across the country. While some want to exit fearing a price correction, others are hoping to create some liquidity for their struggling businesses and this is where end users who are still on the lookout for their dream homes could find their golden opportunity. For the buyer, such a property where construction is halfway through or where possession is due in the next few months brings down the risk.

"Several investors who have stretched themselves too thin are in exit mode and discounts in such cases could range anywhere between 20% and 30%. As the desperation level of the seller increases, so does the discount," says Atul Marwaha, principal consultant at Prime Options, a Gurgaon-based real estate brokerage firm.

The bounce back after the downturn in 2008-09 saw investor activity in markets like Gurgaon, Noida, Mumbai, Bangalore and Chennai peak and several investors bought multiple properties, sometimes over-leveraging themselves. While property prices rose in the last two years and several locations saw appreciation upwards of 50%, with the tide turning in the last few months, these investors are feeling the pinch.

Abhay Khemka of Khemka Investments and Properties in Gurgaon says these investors are getting more desperate by the day. Brokers say end-users today are a cautious lot, considering the state of the economy.

source:- http://economictimes.indiatimes.com/markets/real-estate/realty-trends/new-supplies-resellers-to-bring-down-home-prices/articleshow/22273085.cms?curpg=2

What's the key to unlocking the door to your dream home?

Home ownership as the foundation of the American dream is built into our nation’s cultural DNA.

A recent survey from the National Association of Realtors (NAR) showed that owning a home is a high priority for 51 percent of renters. The idea of what a home is, however, varies widely from one person or family to the next. Some people want a traditional suburban home, surrounded by trees, in a quiet cul-de-sac, or perhaps they want a shingle-style house near the beach. Others may want a super-sleek modern condo in the red-hot center of their favorite city, while others want a cottage in the woods. Regardless of what their ideal home looks like, or where it’s located, the vast majority of people will need to borrow money in order to buy a home. In other words, they will need a mortgage.

There are many different types of mortgages, with various interest rates and terms. However, in practice, it comes down to making a monthly mortgage payment, which combines the principal (amount of the actual loan), interest, taxes and home insurance. In addition, the mortgage process also includes up-front fees and documents.

DOING YOUR 'HOME' WORK

While this process may seem overwhelming, according to TJ Freeborn, Mortgage Professional, Discover Home Loans, there are lots of on-line sources to help consumers understand their options. She says, “It’s smart for consumers to do their homework before they get started. Many people don’t. They should also talk with a trusted mortgage broker—either someone they know or a referral—to find out if they can get preapproved or prequalified and to find out how much house they can afford.”

To clarify, prequalification is the lender’s estimate of how much a consumer is eligible to borrow based on information about income, debt and other financial factors. It is not a guarantee. Preapproval is slightly different. It implies that a lender is ready to make a mortgage loan based on information and documentation.

THE NUTS AND BOLTS OF FINANCING

Ms. Freeborn cautions that “no major purchase takes place without due diligence” and the same holds true for getting a mortgage. One of the most important decisions is whether to get a fixed-rate or adjustable-rate mortgage (ARM). With a fixed-rate mortgage, monthly costs are fixed, whereas, with an ARM, the rate may change over time. An ARM generally starts with a lower rate than a fixed-rate mortgage, but it is designed to adjust periodically depending on market conditions. The initial term ranges from one to 10 years before the readjustments start. “It’s really important to know what your reset date is if you have an ARM. A mortgage broker can help walk you through what that reset could look like. ARMs are ideal for people who don’t plan to stay in a home long, especially if they plan to move out before the reset date,” says Ms. Freeborn.

It’s also important to know how much the entire loan will cost throughout the lifetime of the mortgage. The APR (annual percentage rate) represents the cost of the loan, including the interest rate and upfront fees.

Even though fixed-rate loans tend to have slightly higher interest rates, there is flexibility with terms. Again it comes back to the fact that the mortgage market is not one-size-fits-all. According to Ms. Freeborn, “In addition to 15- and 30-year terms for fixed-rate mortgages, conventional loans offer rates for 10- and 20-year periods as well.” She reiterates, “Every homeowner and every situation is unique.”

REFINANCING

When it comes to refinancing, the goal is to take an existing loan and refinance it into a lower interest rate or shorter loan term. Ms. Freeborn reminds consumers that you don’t have to refinance with the same person you got your mortgage from. A lot goes into choosing which person and institution to work with. Look for credible institutions with a good track record and reputation, and find out whether there are any rewards programs, such as a close-in-time guarantee for new mortgages, or in the case of refinancing, a welcome back bonus.

THE RIGHT TIME TO BUY IS NOW

Is there a right time to buy or refinance?  According to Frank Donnelly, Chairman, National Bankers Association, “A lot of times, people think that because rates have recently gone up that suddenly, it’s not a good time to buy, but the ability to lock in a 4.5 percent interest rate on a 30-year, fixed-rate mortgage is an incredible opportunity. I’ve talked to people who originally thought that their mortgage payments were high—and then 28 years later, the payment is the same and it seems low. Unlike insurance and taxes, fixed-rate mortgage payments are not subject to inflation.”

Freeborn also notes that compared with 10 years ago, interest rates are near historic lows. Cameron Findlay, Chief Economist, Discover Home Loans, says, “Ownership in terms of affordability remains exceptionally attractive influenced by monetary stimulus helping drive rates to their current levels, which remain relatively low despite the recent move higher; however, staring in 2014, expect affordability to be driven by stricter government regulations.” Freeborn is optimistic, and says, “No one has a crystal ball about where interest rates will go. It’s an imperfect science at best, but it’s still an excellent time to buy or refinance.

source:- http://us.mediaplanet.com/real-estate/whats-the-key-to-unlocking-the-door-to-your-dream-home

Eastern Freeway: Latest game-changer for Mumbai real estate

Ramesh Nair of Jones Lang LaSalle (JLL) India explains about positive impact of the Eastern Freeway. He elaborates on how property prices have seen a spike in areas which are in close proximity of the route.

Ramesh Nair
JLL India

With the development potential of Mumbai's Western Suburbs almost fully exploited, we are witnessing increased momentum in new developments in the Eastern Suburbs where land parcels are still available and prices more affordable.

As a result, the 16.8 kilometre-long Eastern Freeway that connects P. D'Mello Road in South Mumbai to the Eastern Express Highway at Ghatkopar has now sprung into sharp focus with developers.

Also read: Land Acquisition Bill: Here's how it will impact valuations

The implications in terms of demand, supply and price are considerable. We have seen a steady increase in inquiries for residential and commercial spaces close to the Eastern Freeway's entrance and exit ramps, and developers have begun marketing their projects with an emphasis on their proximity to this key arterial route.

In Chembur, property prices have risen by as much as 25 percent over the past two years primarily because of this area's advantageous juxtaposition to the Eastern Freeway. Also, markets such as Kanjurmarg, Kurla, Powai and Ghatkopar saw residential property prices rise by 32 percent, 29 percent, 27 percent and 23 percent respectively in 2012.

This year-on-year increase in prices is also attributable to reasons such as the increase in superior quality projects with innovative concepts in these areas. LBS Marg has seen the arrival of luxury hotels such as Radisson Blue by Rajesh Builders and Novotel by Nirmal Group.

In fact, the property market in the CBD - currently on a decline - will also get a fillip because of the drastically reduced inward-bound commuting time. Improved road connectivity between Thane-Navi Mumbai with the CBD will result in an increase of residential project launches for the same reason.

The completion of the Santacruz-Chembur Link Road will cause more traffic coming in from the North side of the secondary business district of Bandra Kurla Complex. This will trigger a fresh spate of developments in the catchment areas surrounding the alternate route to the Central Business District.

With the improved connectivity of the Eastern suburbs, we will see these areas gradually attracting the commercial space requirements previously aimed at other micro-markets as long as the rates remain favourable. Such a relocation trend has already been witnessed in SBD North from other markets. This trend will become even more visible once the current lease periods expire.

There will also be further eastward movement of real estate development into locations like Sewree. However, it is the areas closest to the Eastern Freeway's entry and exit ramps specifically, Orange Gate, Anik Junction, Chembur-Mankhurd Link Road and Panjarpol Link Road which will emerge as the stronger locations.

Thanks for the new impetus, the real estate markets in these areas, which see high residential property absorption, will also see greater demand and consequently upward pricing momentum.

Going forward, the prices in the Eastern Suburbs are expected to rise at the rate of10-12 percent year-on-year over the next two years. A number of developers launching new projects are using the development of the Eastern Freeway as a marketing tool by highlighting the reduced commuting time to South Mumbai from peripheral locations.

Over the mid-term, properties in Wadala will also see a marked increase in value due to the combined influence of the Eastern Freeway and the fact that the MMRDA is fast-tracking this area's development as a Business District.

In the long term, certain land parcels currently held by the Mumbai Port Trust could eventually be released for development. If and when this happens, the presence of the Eastern Freeway will ensure that these land parcels will attract considerable premiums.

There is also a possibility of many industrial units present in the catchment areas of the Eastern Freeway moving out, further augmenting the supply of prime property for commercial and residential development along the Eastern Freeway.

Micro-Market Impact:

• South Mumbai may witness a small jump in absorption, considering the improved accessibility. Close to 35,000 vehicles travel on the Eastern Freeway each day.

• Central Mumbai will witness some acceleration in supply and absorption, and a moderate jump in rental/capital values.

• BKC will see moderate impact, which could improve once the Santacruz-Chembur Link Road (SCLR) comes up.

• Andheri will show, if at all, a mild negative impact because the Eastern Suburbs would now compete with it as an option for real estate.

• The Western Suburbs will largely remain unaffected by the Eastern Freeway, but the contrast between Eastern Suburbs - where a number of infrastructure projects are being undertaken - and the crowded Western Suburbs might become more pronounced, resulting in price pressure in the Western Suburbs.

• The Eastern Suburbs will see the maximum impact, with a sizeable increase in supply, absorption and rental/capital values across all segments.

• The Thane-Navi Mumbai market will experience positive movements, primarily in the residential market, with a lag effect on the commercial market.


The author is the COO- operations at Jones Lang LaSalle India.

source:- http://www.moneycontrol.com/news/real-estate/eastern-freeway-latest-game-changer-for-mumbai-real-estate_943960.html