When it comes to buying a home the Indian market has been traditionally skewed to young families or single, well-paid men. In home loan schemes, banks have never given much weightage to women, single or married, as well as senior citizens because of their perceived lack of economic power. But times they are a-changing’. These days, there are home loan products specifically targeted at women and senior citizens that come with special rates.
Experts gauge that 30% of homebuyers in urban India today are women and that figure is only going to increase from now as more women take up jobs, continue to be independent after marriage, and retain economic freedom. Some of the most attractive home loan schemes are ‘Her Ghar’ from SBI, ‘Women Power’ from HDFC, and women borrower plans from ICICI. Here are some of the major benefits from special home loans tailored for women and senior citizens:
Tax deductions
Self-employed and salaried women currently enjoy special tax deductions of up to Rs 2 lakhs on the interest rate on the loan. If the co-owner or applicant is also a woman, then there are further reductions to be availed of.
Stamp duty
Many states, like Haryana for example, offer lower stamp duties for women applicants. Although the concessions are only about 1% to 2%, it amounts to quite a bit of savings for women in the long run.
Interest rates
Women also enjoy lower interest rates on loans than men, albeit by a nominal 0.05%. But even this slight difference in the interest rate can prove to be beneficial over a period of 20-30 years.
Higher acceptance rates
Women have the advantage of being perceived as less risky buyers and have a reputation for being more punctual on repayments compared to men. Thanks to this, women have a higher chance of their loan application being accepted by banks.
And now, what of senior citizens? For the longest time, senior citizens have been one of the weakest economic links in Indian society along with women. But in 2007, the Union Government introduced the ‘reverse mortgage’ loan in a bid to help the elderly lead an independent and dignified life.
Simply put, reverse mortgage loan enables people to receive a monthly inflow of funds against the mortgage of their homes. The bank will evaluate the home in question and arrive at its market value. This sum will then be paid out to the owners/borrowers over a long duration. If the owners/borrowers pass away or decide to sell the house, then the loan becomes immediately payable by the next of kin or the bank takes over the house and recovers the amount from the proceeds of the sale.
Although a fascinating concept, reverse mortgage loans did not achieve the popularity it was meant to for various reasons. The inordinate amount of paperwork involved, lack of aggressive advertisement and awareness of the product, and capping of the loan amount at a maximum of Rs 1 crore are some of the many causes for the product to remain relatively unknown.
Despite the drawbacks, at the end of the day, these special home loans are a boon for these sections of the Indian society.
More and more women are taking up jobs now a days and are getting financially independent.
Buying home or any asset for that matter makes woman financially and emotionally secured.
‘Her Ghar’ loan scheme from SBI is a good initiative. specially for single woman.