Buying a home is akin to marking one's imprint on a parcel of land and having an enclave of serenity in the rush hour of life. It's for this reason that possessing a home of one's own remains a top priority for most people irrespective of their other aspirations. With readily available financing schemes and home loan interest rates being really low, buying a home is now easier than ever before, but a lot of people are deterred by the high prices.
Financial constraints are no longer a hindrance in attaining the dream of buying a house thanks to the various affordable housing schemes launched by the Indian government. These schemes incentivize homebuying by subsidizing interest on home loans. For a lot of reasons, applying for these schemes is a really good move. For those buying a home for the first-time, availing government housing schemes is a smart move. Here's why:
Since government housing schemes are directed towards a particular goal and societal upliftment and not seeking soaring returns on investment, house prices in government schemes like PMAY are lower as compared to the market prices. If the prices are deemed high, it will defeat their original purpose of affordable housing for all. Location that is selected for government subsidized housing projects isn’t owned by any private developer, which gives a freehand to government-run authorities to develop the area, provide all amenities and ensure connectivity.
One of the most obvious advantages of availing government housing schemes is the subsidy that's provided on the home loan interest rate. This eases a big burden of the buyer as the EMI amount is reduced quite significantly. Anyone who is a first-time home buyer and fulfils other eligibility criteria can apply for a government scheme.
Under the PMAY, the interest rate subsidy can get more than 5% over a 20-year loan duration. Apart from the direct schemes, the government has been proactive in taking other measures that will boost the growth prospects of the real-estate market and benefit both the developers as well as buyers. Home loan interest rate is currently the lowest in over two decades.
It's for a reason that the housing market is considered one of the safest investments for long-term returns. Unlike the volatility of the stock market or commodity trading, the value of a property usually appreciates. The only tangles in the housing market are the delay in project completion or similar legal hassles. With the government being the backer, there's no risk at all when it comes to clearing norms or other legal procedures. Thus, the buyer can almost be guaranteed the project would be completed timely. The stability and high trust due to government's backing makes it a safe investment option as well. Furthermore, the timeline for long-term capital gains has been cut from three years to two. So, anyone buying an affordable home for the purpose of medium-term investment, can sell it after two years and avail long-term capital gains.
In case you need to buy a house for residing and not just as an investment, the best aspect about government housing schemes is the minimal delay in completion of the project and handing out possession to buyers. In the case of private housing societies, there can be inordinate delays due to a number of reasons which can get frustrating for home buyers, but they aren’t in a position to do anything except waiting. Many times, this happens either due to some crisis in money fluidity, promoters pulling out, or land disputes.
It's actually a misconception that government subsidized housing schemes are intended only for the poor, underprivileged and marginalized strata of the society. In fact, these schemes are for a wide range of people across demography, occupations, income groups and class. From the Economically Weaker Sections (EWS) to the lower- and middle-income groups, all can apply for these schemes and get subsidy on home loan interest rates.
Government housing schemes offer a range of advantages for first-time homebuyers. Be it subsidized interest rate, good location, timely possession of property, and being safe and reliable by the courtesy of government backing, it's the best housing deal anyone who's eager to buy a first house can look at. If you have made up your mind about availing a government housing scheme for your dream home, check out the attractive home loan offers at Finserv MARKETS. Housing loan interest rate on these loans is attractive and comes with flexible repayment options.