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Home Loans For Single Moms: How To Buy A House As A Single Mother In India

22Feb2019
Home Loans For Single Moms: How To Buy A House As A Single Mother In India
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Buying a house as a single woman in India? Learn how to get home loans for single women and become a single woman homeowner.

Are you a single mother who dreams of owning your own home?  If you do, you’re definitely not alone. In the past, buying a home as a single woman was unimaginable in India.

But with the growing incidence of divorce, the number of single women owning homes has increased and single women homeownership is growing. In this article, we show you how to buy a house as a single mom in India.

How Can A Single Mom Buy A House In India?

Many single women and moms mistakenly believe that they cannot afford the cost of a new home.  Yes, there are really some who may be unable to afford the cost of a new home, but, for others, it is actually a lot easier than it appears.

Keeping in mind the increasing purchasing power of working women in India, a number of financial institutions now offer home loan programs for single mothers.

The first step in buying a new home involves examining where you would like to reside.  This is important as it gives you an idea as to what the average asking price for homes is.

This average asking price can give you an idea as to the amount of money that you would need to have. Since different areas of the country have different real estate market conditions, this should be one of your very first steps.

Once you decide where you would like to live, you can go about finding a home to buy, as well as get financing for that home. There is no dearth of help for single moms to buy a house in India.

Speaking of financing, there are many women who mistakenly believe that they need to have money, upfront, to buy a home.  That is not the truth. You can avail of government help for single moms to buy a house through standardized banks and financial institutions.

In fact, most people use home loans, provided by banks, to afford the cost of a home.  If you have yet to consider getting a home loan for your new home purchase, this is the time to do so.

Although a home loan can help you afford the cost of a new home, financial lenders will first require a down payment.  This down payment varies from lender to lender.

For many potential single female homeowners, this is where the problem comes in. If you’re wondering how you can come up with the money needed for a down payment, continue reading.

Today, a number of financial institutions offer home loans for single women and moms. HDFC offers home loans at lower interest rates for Indian women, while SBI has a special home loan for women called SBI Her Ghar.

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SBI Her Ghar: Home Loan For Female Home Buyers

The Indian government’s home loans for single mothers are provided through nationalized banks like State Bank Of India (SBI) that are known to be trustworthy, have the lowest interest rates in the market and also charge the lowest processing charges.

SBI’s Her Ghar home loan scheme was designed to make every woman, the owner of a house. You can avail lower interest rates, along with other benefits when buying a house as a single woman.

Their single mother home loans are designed to encourage women to own property, with the greater objective of empowering women.

The eligibility criteria for the SBI Her Ghar housing loan for women is that a woman must be the sole applicant or the first co-applicant.

This home loan for women offers women applicants, or first co-applicants, a concessional interest rate and a hassle-free home loan application process.

You will also benefit from their flexible repayment options as the maximum repayment tenure for SBI home loans is 30 years or up to the age of 70 years of the borrower, whichever is early.

As security for the loan to buy a house, single moms will have to provide an equitable mortgage of the property. The better your financial status, the more likely it is that you will be able to avail of single mother loans.

Apart from that, you need to meet certain conditions as a first-time female home buyer:

  • You must be an Indian resident
  • You must be at least 18 years old as on the date of sanction and not more than 70 years.
  • You must have a regular income and a good credit rating.

Single female home buyers will also require the following documents:

  • Three passport-sized photos
  • Completed loan application
  • PAN card
  • Identity proof like driving license/ passport/ voter ID (photocopies)
  • Residential proof like electricity bill, telephone bill, etc.
  • Bank account statement or passbook for the past 6 months
  • Liability statements and personal assets
  • Signature identification from the current bankers

As a single, female, first-time home buyer in India, these home loans for single women make it possible to give your kids the lifestyle they are used to.

How To Save For The Down Payment On Your Home Loan

One of the easiest ways for you to save money for a new home down payment is by reducing or completely eliminating all of your unnecessary purchases.

These may include a coffee, soda, or other snacks at work, dining out, a full cable television package, and so forth.

Unfortunately, many individuals do not realize the importance of eliminating their extravagances, when looking to save money to buy a new home. Yes, you may only be able to save Rs 1000 or 5000 a week, but it is important to remember that money can add up over time.

Another way that many wannabe single woman homeowners work to come up with the down payment needed to buy a home is by requesting additional hours at work or finding a work-from-home job.

While doing so may result in you having less free time with your family, it is a sacrifice that many women are willing to make.

With an increased workload at work or an online work at home job where you only work ten hours a week, you may be able to quickly come up with the down payment needed to acquire a home loan.

For many women, homeownership is an issue that they deal with, in their life.  The approaches here are just a few of the many ways that you can go about getting the home of your dreams.

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The Importance of Women In Home Ownership

“As a rule, I don’t consider a purchase inquiry as legitimate unless the lady of the house in attendance.” This is an actual quote made by one of the leading real estate firms.

Such a statement speaks volumes and deserves an in-depth analysis. It reflects the sentiments of almost all experienced property consultants.

The plain fact is – when it comes to choosing and buying a home, a man’s ‘natural’ authority and predominance takes the back seat. Let’s review a few more statements made by real estate agents from across the city:

  • “The man of the house may wield the money… but when it comes to buying a residence, it is his wife who decides when and where to spend it.”
  • “Homes are made by women, not men. Every male knows this, and defers to the judgment of the woman in his life in such matters.”
  • “I don’t see a sale happening unless the client’s wife has approved and endorsed it.”
  • Take it any way you want, but the fact remains that most property dealers – be it builders, agents or marketing executives – do not take inquiries made solely by men seriously.

For many years men have had the final say in most matters – but not in issues of buying a home. “Actually, it is nothing but simple, basic psychology,” says one of the above-quoted sources.”

Women have a genetically encoded gift for homemaking and much better perspective about what should be included or excluded. A man depends on the woman to make his home comfortable and suitable for family life.

There is, of course, more than just psychology attached to this. There are very practical considerations to it, too. A property dealer will only see a final deal coming up when a woman is present because:

  • It is the woman who spends the most time in a residence.
  • It is the woman who has a deep, practical knowledge of what is and isn’t required in a home.
  • It is the woman who can instinctively judge whether or not a residence’s price fits into the family budget.

Home Buying Factors That Women Excel At

In their eagerness to buy a home, many men overlook a number of factors that women are more likely to pay attention to, such as:

  • The suitability of the neighbourhood
  • Required room space for children.
  • Safety factors concerning present or future children and elderly family members.
  • The availability of vegetables, groceries and other necessities of life.
  • Availability of storage space in the form of lofts, closets etc. in kitchens and bedrooms.
  • Health factors (hygiene of immediate surroundings, proper drainage, means of garbage disposal, noise levels, etc.)
  • Future maintenance costs.

“When a man walks into my office unattended by a by his wife, mother or sister, I know that this is probably not a serious prospect,” says an independent real estate broker.

“It is man’s nature to make pointless, non-serious inquiries, but a woman usually means business when it comes to the investigation of residential options.”

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The Indian Woman’s Guide To Buying A Home

A decade ago, an Indian woman independent and capable enough to buy her own home was a rare case. However, things have changed today, according to Kishor Pate, Chairman & Managing Director of Amit Enterprises Housing Ltd.

The contemporary Indian woman tends to be very well educated, has a good job with excellent career growth prospects, and even holds important government or corporate leadership posts.

In any case, today’s Indian women certainly have the ability and confidence to craft their own lives and are very much able to fulfil their dream of owning a home regardless of whether they are married or not.

In fact, buying a home is fast beginning to figure as a bigger priority for many Indian women than marriage. This is not surprising, since a self-owned home is correctly seen as the #1 security anchor in India – and the best foundation from which to make long-term life decisions.

In fact, even married Indian women today are more often than not active financial partners in their families. Apart from being earning members, they also have a complete grasp of the family’s current and future financial abilities.

Developers are very aware that the woman plays a leading role in a family’s home purchase decisions. Also, homes are made by women, not men. Every man knows this and will defer to the judgment of the woman in his life in matters of buying a home.

Women have a genetically encoded gift for homemaking and much better perspective about what should be included or excluded. A man depends on the woman to make his home comfortable and suitable for family life.

Still, buying a home is not just a matter of instincts and good taste, but also one for adequate planning and foresight. For Indian women thinking of buying a home, either for themselves or for their family, here are some points to consider.

1. Prepare For The Initial Costs

First-time home buyers tend to save a considerable while to get a sizable down payment together. However, keep in mind that property purchase involves several other initial expenses such as stamp duty and registration costs, utility connection charges and insurance and taxes.

Apart from your down payment on a home (or your contribution towards a home loan), you need to have an additional fund of at least 6 to 7% of the base cost of the property available. If a broker’s services are used, even a negotiated fee will amount to a significant sum.

Not having the required capital to cover all of the initial costs can prove to be a dampener on home purchase plans. It is not necessary to have the entire corpus in one’s savings account since personal loans are always an option. However, women who are just starting out in their careers should not allow themselves to fall too deep into a credit trap.

If they avail of a personal loan to cover the initial costs of a home purchase, it should be to the minimum possible extent so that repayment does not become an issue on top of servicing the home loan. It is always best to use free and clear capital as far as possible.

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2. Be Confident About Monthly Outgoings

Anyone eyeing a property purchase should first figure out the monthly mortgage and whether they will be able to afford it. Online mortgage calculators can be helpful, but they will only tell you the value of the principal and associated interests.

There are other monthly expenses involved in homeownership, and these include insurances, taxes, maintenance charges, utility charges, etc. For working single women, it is important that all these amounts put together do not exceed 35 to 40% of their net income.

Do not neglect to figure out your overall cost of living before deciding on how big a home loan you can safely service, and keep in mind that property is not the only investment you should make towards your ongoing financial security. You should also put at least 10% of your monthly income into a retirement plan.

Often, the full implications of having over-committed on a home loan do not dawn on the borrower until the home loan has been serviced for a few months. By then, it is too late to modify the financial plan. When it comes to a home purchase, every financial angle must be examined well in advance.

It is very advisable to use the services of an experienced financial planner or rely on the informed advice of a family member, friend or colleague who is experienced in such matters. The process of buying a dream home should not turn into an unexpected nightmare at any point.

3. Be Realistic And Maintain Forward Focus

Homeownership is a great step ahead in a woman’s life, and towards independence in your retirement age. But your first home is not necessarily the only home you will ever buy.

Remember that you can always upgrade in the future if required or desired, so there is absolutely no need to buy the biggest-possible flat now. Never compromise your current financial viability by buying a needlessly expensive home.

The home you live in today does by no means have to be the one you will be living in when you retire. When it comes to real estate, it is always a good thing to upgrade as financial ability improves, but this process can and should be planned out over the entire course of one’s working life.

For a woman who is at the outset of her career, nothing is more important than financial stability on every front. To plan for upgrading to a bigger and better home further down the line, it is very advisable to invest (and stay invested) in fixed deposits or mutual funds which deliver more returns than savings accounts.

Direct stock market speculation into single company stocks and bonds as a potential source of real estate funding should be avoided, as such investments are not sufficiently diversified to offer a safety net in case a company experiences a downturn.

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4. Shop Around Extensively For Home Loans

When it comes to choosing the right lender, do not go by the recommendations of friends or relatives alone. Do extensive research on the several different lending institutions available to you.

Ideally, you should get pre-approved for a home loan and the interest rate should be the most competitive. Remember that as an Indian woman, you are entitled to ask for a lower rate of interest on a home loan – be sure to insist on this benefit.

The home loan market in India is currently very competitive, and banks are falling over themselves to attract customers. This is a fact that can and must be taken advantage of.

A woman who is shopping around for a home loan should make specific inquiries about special interest rates and other incentives that a bank is offering to women borrowers. Asking the right kinds of questions will also establish you as an informed borrower and encourage the bank to offer you the best possible structuring.

Never take the first thing that is offered to you – most banks have a considerable margin of flexibility to accommodate borrowers who know what they want and are determined to get it. If you are married, the ideal scenario is to take a joint loan with your spouse. This is also the arrangement that banks prefer most since it reduces their risk.

5. Be Sure Of The Developer’s Credibility

Every day brings new stories about buyers who have been hoodwinked by unreliable developers. Either the project has been unreasonably delayed, has never even taken off or the delivered property (or amenities and facilities) are grossly different from what was initially promised.

Do not fall into such a trap – no woman looking for the security of homeownership should have to deal with such a setback. Make sure the developer has a strong reputation on the market by doing multiple checks with reliable agents, the home loan company and also on the Internet.

It is highly advisable to patronize only established developers with a readily verifiable track record for timely completions and 100% adherence to the agreements they make with their customers.

We hope you found this home buying help for single moms useful. Do share your own experience as a single woman first-time home buyer in the comments below.

Author Bio:

Priya Florence Shah is the Group Editor at SHEROES and author of Devi2Diva, an emotional self-care book for women.

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Home Loans For Single Moms - How To Buy A House As A Single Mother In India

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