The women of today are progressive and dynamic. They do not shy away from any challenges or responsibilities and are confident in making decisions for their career and investments. The fact that investments in the real estate sector are male bastion does not hold good anymore. Today more and more women are actively buying homes, both for a living and as an investment.
On the occasion of International Women’s Day, we bring out this primer to help women know their privileges; and challenges that they might face so that they can be better equipped while buying a home.
The privileges
There are certain privileges offered to women by the Government, financial institutions, and real estate developers. These include:
Lower rate of interest
While availing a home loan, the rate of interest is a significant factor that decides the EMI you pay. Home loans fall under the category of priority lending, hence has a lower rate of interest compared to other loans. Interestingly, women further get a discount on these interest rates to the tune of 5-10 basis points. As home loans are big-ticket and long-term loans, a small reduction on the interest rates also ensures big savings over the tenure of the loan.
For example, HDFC offers its women customers a rebate of 0.05% across home loans of all amounts.
Quicker approval of home loan application
It is seen that when a woman is the primary applicant of a home loan, approval comes through faster. Though lending institutions do their part of due diligence of the loan application concerning income, credit score, and other criteria, woman applicants are perceived to be less risky. Hence, their loan applications see a lower turnaround time.
Benefits under PMAY
Pradhan Mantri Awaz Yojana is a scheme under which the Government aims to enable all citizens of the country to own a home of their own by 2022. To this effect, the Credit-Linked Subsidy Scheme was introduced based on the criteria of income.
In the Category of Economically Weaker Sections (EWS) and Low-Income Group, the house bought or constructed has to be mandatorily registered under the name of the female head of the household, either individually or jointly with the other male member like her husband.
Lower stamp duty
Registration of a home is a legal requirement, which entails payment of stamp duty. As stamp duty is a state subject, it can range anywhere between 4-10% of the registered value of the property. This can prove to be a significant burden on the homeowners.
However, some states like Delhi charge a lower amount of stamp duty when the buyers are women. Generally charged stamp duty is 6%, while women pay only 4%. Do check your state rules beforehand to make sure that you get these benefits.
Builder benefits
Often builders also announce special privileges for women buyers like discounts, vouchers, etc. Though these may seem enticing, we would advise not to base the buying decision solely on these offers.
Challenges faced by women
It is not a bed of roses each time for women. They do have to bear with specific challenges while buying a home.
Co-application of loans
While men have the liberty to apply for loans with their brothers or parents as their co-applicants, women do not have that privilege. Though there are no laid down rules that support this, however, lenders generally do not approve such loan applications.
Only unmarried women can have their parents as co-applicants, married women co-applying with their mother /father do end up getting their applications rejected.
Issues of security and safety
Women prefer properties with a high amount of safety and security. It may so turn out that these kinds of properties come priced more expensive than the others.
All said and done; we are happy to see that women are taking an interest in making real estate investments. However, we would advise them to act with a lot of caution and thoroughly check all required documents before deciding to buy a home.
