Home loan

The rain is a welcome respite from the sweltering heat of the Indian summer. And while there’s not much in common with Home Loans and cloudy weather, it’s a surprisingly beneficial time to avail of a Home Loan.

But why?

Usually, a slowdown in property sales is common during this season. Many real estate developers and others who want to sell their old homes have to wait till the rains die out to get prospective customers. Those in urgent need of cash have to offer their properties at lower prices to attract buyers.

The rains compel most people to stay indoors. The traffic jams, puddles and mud dampen most people’s enthusiasm to go out during the rains. Unless it is unavoidable, why should you step outside and risk getting drenched and falling sick?

An Unfavourable Time for Many

Not just the rains, it is that time of the year, just before the start of the festive season, a period that is considered inauspicious for launching any type of new venture or investing in properties. Most people prefer to wait till the festival season to buy homes. So, this is a slow period in real estate sales.

Attractive Offers

Real estate developers want to overcome the slow sales and improve their sales figures for this quarter.

This is a good season to get a house on bargain rates. So get out your umbrellas and raincoats, get in the car and endure the traffic jams to go and see the properties that you would like to buy. You can save money as developers and brokers are open to offering discounts and negotiating on the prices.

You also have a good chance of buying better residences that may otherwise not fall into your budget if you were to buy them at a different point of time.

Loans Become Easier to Get this Season

Financial institutions also have targets for their loans and other products during each quarter. The general slowdown in real estate sales also affects them, as there are less number of prospects for their Home Loans. So, banks and NBFCs relax some rules and become more pliable when negotiating with willing Home Loan applicants during the rains. This is a good time to apply for Home Loan.

Banks may offer you better terms in tenures, cut back on processing fees and offer other benefits during the monsoon. Lenders may not generally come up with open monsoon offers, but when you approach them for loans, you can find that they are more willing to meet you halfway than at other times.

Assessing the Locality

During the rains, any defects in the roads and in communication facilities are more easily revealed. Bad roads lead to waterlogging and serious traffic jams. Bad telecommunication connections mean that during the rains, your mobile and internet networks slow down and suffer from other problems. So, this is a good time to assess whether the area your prospective house is located in has good infrastructure.

Assessing the Construction Quality

The monsoons reveal flaws in construction like leakages, seepages, bad drainage facilities and other problems. Even under-construction properties can reveal some flaws. Completed flats and villas, and resale houses are best inspected during the rains. Damp walls, leakages, clogged pipes, and mud puddles are problems that will not be easy to detect during other seasons. You can then look for other better constructed houses.

If you like the house or apartment in spite of these defects, you can use these flaws as negotiation points with sellers. You can insist that developers give you a better price to compensate for the infrastructure and construction flaws.

Possibility of Interest Rate Cuts on Home Loans

Good rains translate into increase in agricultural output. A good harvest means an increase in the availability of grains and vegetables which can bring down the price of food items significantly. This will lead to reduction in inflation as the price of food items accounts for almost half of the Consumer Price Index.

This can lead to repo rate cuts, the benefit of which is generally passed on to the bank’s customers. So, the rains are good news for those who are looking to apply for Home Loan now or in the near future.

Once you have paid off a good few EMIs after calculating using home loan calculator on your Home Loan, you can cash-in on the claim you now have on a percentage of the property. In addition, real estate properties generally appreciate in value over a time period. You can use these to get a Home Loan top up. This is a loan that you can avail after making a few EMI payments. It comes at lower interest rate than unsecured loans like Personal Loans and can be used for any purpose like furnishing and decorating your home, investing in growth funds, or buying new appliances for your home.