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GUIDELINES FOR APNA GHAR DESIREES ASSISTING HOME OWNER DESIREES.

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Presentation on theme: "GUIDELINES FOR APNA GHAR DESIREES ASSISTING HOME OWNER DESIREES."— Presentation transcript:

1 GUIDELINES FOR APNA GHAR DESIREES ASSISTING HOME OWNER DESIREES

2 REVIEW OF ELEN EDUCATION TRUST OBJECTIVES A: PRIMARY OBJECTIVES A1 - Promotion & encouragement of Renewable Energy. A2 - Free Education for Intelligent children whose parents are below the poverty line. A3 - Assisted Living For Autistic Adults and their families. A4 - Bright and Sunny 2 nd Innings for Senior Citizens B: SECONDARY OBJECTIVES B1 -Assist ex servicemen to rehabilitate. B2 - Assist Serving Personnel to make prudent investments.

3 PROCESS DESCRIPTION ELEN EDUCATION TRUST OBJECTIVES A1 - Renewable Energy – Design, Develop and Deploy. A2 - Intelligent Children – Provide opportunities by establishment of residential schools. A3 – ALFAA – Establish nodal centres for Autistic Adults. A4 - Bright and Sunny 2 nd Innings for Senior Citizens by participating in A2 & A3 Programs. B1 -Providing employment and other opportunities to ex- servicemen to supplement their pension. B2 - Assist serving personnel for taking a home loan while early in service as the single largest investment that can change their financial equation to reduce dependence on their pension on retirement..

4 SOME LOAN TERMS & DEFINITIONS Loan / Advance. This is an amount lent by a Lender to a Borrower to meet a financial gap. Loan Eligibility indicates how much loan one can get. Regular Housing Loans. Banks and Group Insurance Funds generally give loans to eligible borrowers. Margin Money. The borrower must make a down payment of 15% of the cost of property before loan is sanctioned. This is known as Margin Money. Gross Pay / Net Pay. Basic Pay + DA + Rank Pay + Military Service Pay is known as Gross Pay. Gross Pay minus deductions such as Provident Fund, AGIF contribution and repayment of other loans (like car loan, computer loan, etc) is Net Pay. Margin Money Gap. When the borrower does not have Margin Money, the difference between Liquid Cash held and mandated 15% is called Margin Money Gap. Funding Gap. When the cost of property is more than the amount of liquid cash + loan eligibility, the difference is known as Funding Gap. Special Loans. In some special cases, depending upon availability of funds and on special case to case basis, short term Margin Money Gap can be covered through structured Interest Free Loans from our Trust. Funding gap can also be covered on case to case basis by our Trust.

5 SOME MORE LOAN TERMS & DEFINITIONS EMI. Short for Equated Monthly Installments. This is the amount to be paid every month as repayment of loan for a fixed number of installments. The EMI comprises of two components; Principal (or Loan Amount) and Interest. Loan Eligibility. Loans are given by Group Insurance Funds / Banks based on REPAYMENT Capacity of borrower assessed as per their own internal policies and measured as follows: – Ability to repay the loan every month (EMI) from the salary without impinging on their essential and unavoidable living costs and is defined as an EMI Factor expressed as a percentage of pay. – Time available to repay the loan; generally based on Age / Retirement Date or both. EMI Factor. Generally banks assume that a person should be able to pay 45% of net pay for repayment of loan while AGIF considers 75% of net pay as repayment capacity. For example, if you are getting a Net Pay of Rs 1000/-, a bank will give a loan whose EMI is Rs 450/- per month, while if AGIF gives a loan, the EMI will be Rs 750/- per month. Thus for a 20 year term at 10% Rate of Interest, a bank will give a loan of Rs 46,631/- while AGIF will give a higher loan of Rs 77,718/- to the same person.

6 LOAN QUANTUM FOR SERVICE PERSONNEL House Building Advance. Upto a maximum of Rs 2,10,000/- from Govt of India to be repaid before retirement on comfortable lending terms. – Rate of interest is 11% for Rs 2.1 Lakhs and 8% for Rs 50,000/-. – Further reduction on rate of interest upto 3% on adoption of small family norms and insurance against calamities. Loan from Group Insurance Funds:- – Army Personnel : Upto Rs 25 Lakhs @ 9.5% based on payment capacity (max 75% of Take Home Pay as EMI) and based on residual service. Loan repayable before retirement. – Air Force Personnel : Upto Rs 15 Lakhs @ 8% and loan may be repaid upto 10 years after retirement. – Naval Personnel : Upto Rs 12 Lakhs @ 9% for Sailors and upto Rs 25 Lakhs for Officers to be repaid prior to retirement. Loan from Banks. Normally, banks lend between 45% to 60% of Net Pay as EMI upto 60 years of age. Structured / Special Loans. Arranged by ELEN Education Trust to cover Margin Money or Funding Gaps on case to case basis.

7 PROJECT VIABILITY Strategic Location. Should have good road, rail, air and metro rail communications. Local Demand. Should have local demand; to be gauged by number of units booked or sold in that project. Growth Around Area of Interest. Known Market drivers scheduled to arrive in that locality. Pricing. Availability within your budget and availability of easy loans. Facilities. Facilities and amenities that are critical and essential – Swimming Pool, Gymnasium, Walking Track, Shopping Arcade, Entertainment Centre, educational institutions, parking, good view, ECHS and CSD facilities.

8 FINANCIAL STRATEGY Take a Home Loan while you are still eligible. As your service and age increases, your loan potential reduces. If all Project Features Exist as given in previous slide, you will get good rental after possession to reduce your EMI burden. If all above facilities are out of reach in your own desired location, then BUY A HOME ELSEWHERE WHERE ALL THE ABOVE FEATURES ARE AVAILABLE – THEN SELL 5 YEARS LATER TO ACQUIRE FINANCIAL GAIN & APNA GHAR AT YOUR PLACE OF CHOICE. If you dont have adequate funds / loan potential (as you have reacted too late), buy a commercial space that will give good revenue and future income potential from the money you have. If you are weak today (as you did not plan earlier) Combine your Strength through Cooperative / Group Housing Schemes (ELEN Education Trust will help fund the project).

9 TIME & TIDE WAIT FOR NONE BUY A HOME TODAY WHEN YOU ARE ELIGIBLE FOR TAKING A HOME LOAN. If you dont have an APNA GHAR – After retirement you will have to move your home every 11 months if you stay in rented home – You will have to pay escalated rent by 10% to 15% every year. AIM FOR TWO HOMES WHILE IN SERVICE – One for Living and One for Rent Income.

10 HOW ELEN EDUCATION TRUST HELPS Review your financial situation and provide you with options that will positively change your financial future, for a quantum jump in your personal assets values. We help you in preparation of Loan Documents as per correct format and ensure all correct legal documents for purchase of real Assets or for renovation and modification of homes. We help cover gaps in funds for short periods from our Trust Corpus, or we will, after discussions, make available lenders at good rate of interest. We provide assessment of opportunities and give you intelligent time lines for purchase based on market conditions. We obtain for you lowest rates from a few developers and builders by stripping out broker commissions and further getting highly discounted rates. Negotiate with a few nationalized banks to extend special support to service personnel. We methods to reduce EMI burden by financial offerings. Our volunteers will manage rental of assets to reduce EMI burden / enable purchase of assets better than what one could have acquired otherwise.

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