Those seeking a home in Delhi can get that in 2018 as the Delhi Development Authority (DDA) has grand plans in store for them. A few days back, the news of DDA coming with 21,000 flats in its upcoming housing scheme broke through. Suddenly, there was an euphoria around even as DDA revealed only a few details regarding the impending housing scheme.
The DDA flats, which are going to be located at Rohini, Dwarka, Siraspur, Narela, etc, would command a price anywhere between ₹7.5 lakh to ₹1.44 crore. In lieu of the price that the housing units are likely to have, you must be better prepared financially to experience a friendly repayment if you emerge as a winner in the draw. So, what are those adjustments or say homework you need to do before and after DDA Scheme 2018, which is likely to be launched in June this year.
Home Work Suggested Before DDA Scheme 2018
Here’s a list of work you need to do before DDA scheme kicks off.
Search DDA Property According to Your Budget
The first and foremost job is to pick a property according to your budget. So often, one deviates from this and pays the price in the long run. If you are earning say ₹50,000 per month, you can ill afford to buy a housing unit that would bring forth an EMI more than ₹30,000. Besides home, you have many responsibilities on your hand to shoulder out, right? So, pick a property and choose a home loan offer according to your income to be on the safe side. The offer should be interesting in terms of interest rates so as to reduce the quantum of EMI and interest over the loan tenure.
Save for Down Payment of Home Loan
Now as the launch and draw dates are quite a few days away, you better draw a strategy that would enable you to pay the sum of down payment. As you would know, a home loan is not financed fully. On a broader level, banks can lend you around 75%-90% of the cost of the property. The remaining 10%-25% would be recovered from your end as a lump sum. Generally, loans of up to ₹30 lakhs, ₹30-75 lakhs and above ₹75 lakhs are financed to the tune of 90%, 80% and 75%, respectively. Based on the price of the property, the down payment can be ascertained.
So, if you are looking for a DDA property worth ₹40 lakhs, the down payment is likely to be ₹8 lakhs. This can be reduced to a degree if you already have an existing relationship with the lender. At the same point, reducing the size of down payment can increase the quantum of loan and nterest liability. Here, lies your duty to check the savings you have generated over the years. The savings will greatly decide the down payment you can actually make. Keep in mind not to use the entire savings for down payment so as to meet the needs of contingency times, if they do arise.
What to do Post Emerging Draw Winner of DDA Housing Scheme 2018?
Homework does not end with the arrangement of down payment needs and the choice of property attuned to your budget. In fact, you need to maintain a discipline even after emerging a winner in the draw. Check out the points below which you need to tick.
Keep a Lid on Impulsive Spends
With a running home loan, you can’t afford the impulsive urge to disturb the balance of your finance. It makes many sitting on the piles of default which you won’t like to be in, right? A default means a negative impression that you create before the lenders. What that does is worsen your credit score and hinders the possibility of any credit in the future. So, spend on necessary stuff and remove the unnecessary ones from the list. This will help you maintain reasonable savings for a smooth repayment.
Look for Refinance
A home loan, as you would know, runs for as long as 20-30 years. Therefore, it’s advisable to be watchful and look to refinance if the opportunity does arise. Home loan interest rates are invariably floating in nature and so they are bound to change over time. After a point, you can switch your home loan portfolio to a lender offering a lower interest rate on refinance, which means taking a new loan to pay off the existing one. The outstanding balance of your existing loan will be taken over by the new lender, which will issue the banker’s cheque to the lender from where you want to switch your portfolio. However, a refinance is advisable only when the difference between the interest rates of the current and new lender is more than 1%.