RERA Act has become effective from May 1, 2017 after a long and tiring struggle. Everywhere people are talking about it but as an individual, you would be interested in knowing the benefits it will bring. You must know that the implementation of this Act, would bring a bunch of advantages for home loan borrowers. So, what exactly is this RERA Act all about and how is this going to help you buy your dream home? Well, here are some of the important changes that you can witness after RERA Act implementation.
Q. How RERA would bring transparency in the real estate deals?
A. Real Estate (Regulation and Development) Act, 2016 (RERA) was a long-awaited consumer-friendly Real Estate Act which is surely going to bring transparency in the real estate deals. Under this Act, there is a provision of mandatory registration and requirement of keeping 70% of the project money into an escrow account. Also, the advance booking amount, which the buyers pay to the developers before signing the registered sale agreement, is not supposed to exceed 10% of the property cost. According to analysts, the real estate sector will be able to attract higher institutional funding as the Act will bring in much-desired transparency as a result of which the sector contributes about 9% of India's gross domestic product hence boosting the buyer confidence. Now the developers need to pay an interest rate of 2 percentage points above State Bank of India's lending rate if the project is not delivered on time.
Q. Post RERA, will it be easier to get loans?
A. After the implementation of RERA Act, borrowers can expect a smooth loan journey as lenders will now be confident about providing loans to you as the date of completion would be pre-decided failing to which will lead to a higher return rate. Since there will be clarity about the construction cost and project completion, it will be quite easier for a home loan borrower to get a home loan.
Q. Can you expect negotiation when it comes to financing?
A. As you can see, the home loan rates have come down to 8.30% per annum. Now, even if the inflation has increased, the eligibility of buying a property has also gone up. With RERA Act, the delayed possessions will surely get out of the way which will, of course, be a benefit for homebuyers. The borrowers can now be confident about their deal and can negotiate with the lenders on the finance amount. The authority to take action against the delay from the developer's side would give the buyers a concession. In short, it is a win-win situation for home buyers. Isn't it great?
Q. What about the land purchase loans? Can you expect lenders to be to less reluctant after RERA?
A. RERA will change the functioning of Indian real estate for sure. Unlike the past, the lenders have got the option to trust the developers and the home buyers. Since there will be a proper legal documentation of the property, the lenders will obviously find it less reluctant to provide loans. So, if you have been finding it difficult to get a loan for the land purchase, RERA Act has definitely brought in a good news for you.
Q. What is the best thing about RERA Act?
A. The lending rates are now down to 8.30% per annum across major banks across all banks. With RERA coming in, home loan customers have got the official rights to take charge of their property from the beginning itself in the form of documents. This Act has brought in relief for the borrowers and has definitely affected the fraud business going on in the real estate market from quite a long time now. Now, you can be confident that once you have bought a home, it is going to be yours within the set time. Unlike before when one property was sold to many, from now onwards, there is going to be a single owner of the property.
Thus, you can see RERA has brought in the privilege to home loan borrowers as there will now be relief in the loan dealings. So, if you have also been facing delayed possession, this Act is surely an angel for you!
Srishti Singh holds a significant experience in writing about Real Estate Regulatory Authority (RERA). She has written RERA act with best of her knowledge so as to help the consumer make the right choice. For More Information Visit Here: WWW.WISHFIN.COM