Dreaming of a house in 2024? Understandably! Owning a home is a major life goal for many, and the desire for stability and sanctuary is particularly strong in uncertain times. However, before you get swept away by the dream, it’s crucial to understand the realities of the home loan industry in 2024.
While 2024 might present challenges, it also offers opportunities for those who are prepared and informed. Don’t let your dream fade, but approach it with a realistic and strategic mindset.
Here’s an expert’s insights into the key trends and what you can expect:
Pramod Kathuria, founder and CEO of Easiloan said tier 2 and 3 cities are expected to see significant growth in home loan demand in 2024.
Among the factors, Kathuria sees that the growth will be driven by urbanisation, rising disposable incomes, increasing affordability compared to Tier-1 cities, and government initiatives like the Urban Infrastructure Development Fund.
Will Repo Rate Change In 2024?
For repo rate impact, he suggests a rise in the RBI’s key interest rate may lead to short-term postponement of home-buying decisions. However, the overall demand is expected to remain strong due to long-term factors like favorable demographics and rising aspirations.
Key Changes Expected in EMI and Housing in 2024:
EMI increase: Possible if repo rate hikes are passed on to borrowers.
Focus on sustainability: Growing interest in green and energy-efficient homes.
According to Kathuria, these are the top 5 things to know before taking a home loan:
- Eligibility: Assess your income, credit score, and down payment capacity.
- Interest Rate: Compare rates and choose fixed or floating based on your risk appetite.
- Loan Terms: Understand tenure, prepayment penalties, and processing fees.
- EMI Affordability: Ensure EMIs are within 30% of your gross income.
- Hidden Costs: Factor in stamp duty, registration charges, and insurance.
Key Documents for Home Loan:
- KYC documents
- Income proof (salary slips/ITR)
- Bank statements
- Property documents
- Employment proof
Home Loan: Self-funding vs. Loan Ratio:
Kathuria suggests ideally, you can aim for a higher self-funding ratio to reduce the loan amount, EMIs, and interest burden.
“A minimum of 15 to 20% self-funding is the general trend, however, we have bank schemes and tie-ups that provide funding upto 95% of the agreement value,” Kathuria added.
Home Loan: Fixed vs. Floating Interest Rates:
Fixed: Offers stability and predictability but may be higher than current floating rates.
Floating: Fluctuates with market changes, offering potential savings if rates fall but exposing you to risk if rates rise.
Key Trends and Observations in 2023:
Rising demand: Increased home loan inquiries and disbursements in Tier 2 and 3 cities.
Digitalisation: Increased adoption of online platforms for loan applications and processing.
With careful planning, informed decisions, and a bit of perseverance, your dream of owning a home can become a beautiful reality in 2024. So, keep dreaming, keep planning, and make the first step towards making your homeownership dream a reality!
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