Advantages of CLSS Scheme for Home Buyers in 2019

In an effort to make housing affordable to the people living in India, the government launched a scheme under the Pradhan Mantri Awaas Yojana in June 2015. It came to existence as the Credit Linked Subsidy Scheme. In it, the government pays a part of the home loan interest as subsidy, to ease the financial burden on the borrower. As of 2018, almost 2.75 Lakh people have taken advantage of this scheme in question.

The PMAY CLSS can help you build or purchase your dream home too. However, here is a brief look at how the scheme affects your loan interests, depending on the annual income of your family.

Income Slab and Subsidy on Interest

1. Economically Weaker Section (EWS) - If the annual household income of your family is less than Rs. 3 Lakh, the government categorises your family as EWS. As such, you can enjoy interest subsidy of 6.50% on home loans under PMAY.
2. Low Income Group (LIG) – The government classifies you as LIG if the average annual income in your family is more than Rs. 3 Lakh, but less than Rs. 6 Lakh. Families in the LIG group can avail the same 6.50% subsidy offered to those EWS.
3. Middle Income Group I (MIG I) – You belong to this group if your family earns between Rs. 6 Lakh and Rs. 12 Lakh. For families in this group, the Credit Linked Subsidy Scheme offers a 4% subsidy on home loan interest payable.
4. Middle Income Group II (MIG II) – If you earn between Rs. 12 Lakh and Rs. 18 Lakh in a year, your family falls under MIG II. For these people, the subsidy stands at 3%.

Now that you know the different income slabs eligible for a subsidy, you might wonder how the scheme works. Here is a detailed example to help you understand the benefits of this scheme on home loans.

Suppose, you belong to MIG I and you opt for a home loan of Rs. 9 Lakh at 8.5% for 20 years. At this interest rate, you would incur a monthly EMI of Rs. 7810. During the entire tenor of 20 years, you will end up paying Rs. 9,74,498. Now, after considering the 4% subsidy, net present value or NPV for the said home loan comes to Rs. 2,65,000.



Under this credit linked subsidy scheme, you do not have to pay interest on your principal loan amount but on the amount resulting from subtracting the NPV from the principal, which in this case is Rs. 6,65,000. Therefore, your EMI would reduce to Rs. 5771 and, at the end of 20 years, you end up saving Rs. 2,54,453 in interest payments on your loan.

Benefits of the Scheme

The price of land and property is skyrocketing in India. At such a time, people belonging to weaker financial strata of society have no hope of affordable housing. With the help of this subsidy scheme, such individuals can now look afford a residence at par with average living standards. Here are some benefits of availing such subsidised home loans –

Reduces Financial Liability - Since this subsidy scheme reduces the EMI payments for a home loan, it, in general, helps reduce financial burden. With such a subsidy, repaying the loan becomes easier and more convenient.

All Reputed Lenders support the PMAY CLSS Scheme - You do not need to find a separate financing company to avail a home loan with subsidy. If you match the eligibility criteria, any reputed lender will allow you to utilise the benefits of PMAY scheme in India.

Points to Remember for Availing Subsidy on Home Loans

This scheme is available only to first-time homeowners. Therefore, if you already own a property and want to purchase a new house, you cannot avail the subsidy on a loan to purchase the new property. However, such a person can still avail a subsidised home loan for the purpose of renovation or improvement of his/her owned property.

You still need to furnish all documents required for home loans to your lender and meet the specific eligibility criteria for the same.

To avail the subsidy on the loan, you must meet the carpet area criteria based on whether you belong to EWS, LIG or MIG groups. If the property you are buying surpasses the maximum carpet area allowed for your economic group, you will forfeit the subsidy.

Subsidy on home loans can save a considerable amount of your finances. However, you must check all terms and conditions for the scheme before the loan application to ensure that you qualify and benefit for the same.

You’ve Got Options—How to Pay for Your New Home

One of the major components of the American Dream is owning a home. However, purchasing a home can be a challenge for many adults. There are so many strategies and rules that it may seem impossible to figure out. Luckily, if you’re ready to buy your new home, you have options to choose a payment plan that works best for you.

Save up the 20 percent Down Payment

Most personal finance gurus recommend saving up 20 percent for the down payment before making the purchase. This strategy comes with some great benefits. First, you’ll automatically have some equity built up, so it’s unlikely you’ll go under on your loan. 

Another great benefit of taking out a conventional loan with a 20 percent down payment is the ability to avoid private mortgage insurance. Usually, if you’ve paid less than 20 percent, lenders require that you pay for PMI. 

Depending upon the price of the home, PMI can cost hundreds each month. The biggest negative associated with a 20 percent down payment is the length of time it can take to save it, but many consider the wait worth it.

Save up and Pay Cash

Another option for paying for your new home is saving up cash to pay for it in full. This will help you avoid debt, but it will likely tie up wealth that could otherwise be invested in more liquid investments. 

Having a paid-off home will greatly improve your monthly cash flow. This option will be more achievable in many areas of the Midwest. It will be very difficult for people looking to buy real estate on the coasts where housing costs are higher.

Fixed vs Adjustable Mortgages

Mortgages with adjustable rates tend to come with lower interest rates. These lower rates can make it easier for prospective homeowners to get into a new home. However, they can be adjusted upward, and your mortgage payments will be adjusted accordingly. The principal and interest portion of a fixed-rate mortgage will stay relatively steady over time.

Mortgage Programs

The US government provides incentives for new homeowners. Mortgage programs through the USDA, the VA, the FHA, and some companies who work with them can give you mortgages with no or very low down payment requirements. These can allow you to get into a house quickly without saving up tens of thousands of dollars. 

Likely, you’ll have to pay for insurance on these. If there’s a downturn in your local market, it could become difficult to sell a home without going into the hole because you’ll be less likely to have equity built up.

If you’re looking to get into a home of your own, you have options. Whether you have no money to put down or you can pay the full price in cash, it’s possible to get into your first home as long as you have reasonable credit. Regardless of the option you choose, you’ll want to perform due diligence to make it less likely you’ll wind up underwater on your purchase.

How Much Car Can You Can Afford on a Budget

Buying a car is a big step. Motor vehicles are expensive, and they require a lot of responsibility to operate safely. However, the car buying process itself can be very confusing. There are many choices on the market. 

There are coupes, sedans, minivans, SUVs, crossovers, and more to choose from. Deciding on just what kind of vehicle you want to buy can be tough. Just how much car do you really need and can afford on your budget?

Your Basic Needs for the Car

Everyone needs a car for a reason. Some need one to commute to work. Others need one to drive their kids to and from soccer practice. Consider what your bare minimum needs are for a vehicle. This includes the number of seats you need. If you have a spouse, three children and your parents living with you, obviously a car with four seats is not going to suffice.

Used Vs. New

One of the more significant decisions you will have to make is deciding between buying a new car and buying a used one. There are trade-offs for both choices. Older cars are definitely less expensive. However, more modern vehicles are likely to run better and require fewer repairs.

Buying Used Parts

Buying a fixer-upper can be a way to save money. If you are a gearhead or know someone that can work on the car for you, you’ll save even more. There are ways you can save money if you need to perform repairs on a used vehicle. 



For one, used parts are certainly cheaper than new parts from the manufacturer. Buying used Ford Mustang parts, for example, can make the sports car more affordable.

Insurance

You also have to consider the different factors that go into the exact total price to own a car. This includes insurance. Specific vehicles are much more expensive to insure. Others require less in premiums. Obviously, a European sports car will be more costly to insure than an American sedan.

Fuel Economy

Lastly, another thing you need to consider when deciding if a car is within your budget is just how much gas it will require. This is a substantial hidden cost you must find. SUVs, for example, tend to be gas guzzlers. 

Smaller cars, on the other hand, will be much more fuel-efficient. Similar sized models from different manufacturers may also have different gas mileage for both highway and city driving. Try to make a lot of direct comparisons.

Overall, what kind of car you can afford depends on a lot of different factors. There are also several different strategies you can use to save money. Consider all these factors when deciding if a vehicle is within your budget or not.

4 Tips to Lower Your Car Insurance Before Your Next Payment

Car insurance can be a major monthly expense, and many drivers spend way too much on their premiums. Luckily, with a few simple tips and tricks, you might be able to lower your insurance rates by hundreds of dollars a year.

Increase Your Deductible

One of the quickest and easiest ways to reduce your monthly premiums is to ask for a higher deductible. The deductible is the amount that you pay before your insurance coverage kicks in, and many drivers increase that amount when they haven’t been involved in a collision in a few years. 

You might also want to increase your deductible if you don’t drive very much and your risk of getting into an accident is relatively low.

Shop for a New Provider

If your current insurance provider refuses to alter your premiums, then you should consider shopping around for a new policy. Switching over to a new insurance company could end up saving you quite a bit of money every month, and those types of providers sometimes offer huge discounts to safe drivers. 




Before you choose a new provider, you should try to get quotes from at least three or four companies. Some providers might even match other quotes in order to get you to switch.

Negotiate a Better Rate

At least once or twice a year, you need to call your insurance provider to see if you can negotiate your premiums. As long as you are a safe driver and have a relatively clean record, you might be able to bring your premiums down with nothing more than a phone call. 

You can also call your provider and ask for a discount if your credit score has recently gone up. One of the biggest factors that insurance providers consider is a driver’s credit score, and bringing your score up by a few points could impact your rates.

Bundle Your Policies

Many large insurance companies offer a wide variety of policies, and you should see if your current provider gives discounts to those who bundle their insurance. Instead of insuring your home and car separately, you can lower the premiums by combining the two policies. 

You might also want to bundle your insurance if there are multiple drivers in your home who all have separate policies.

In addition to these few tips, you must also make sure that you purchase vehicles that are safe and secure. Your premiums might plummet if you invest in a reliable vehicle that is filled with modern security features.

Recently Diagnosed? 4 Tips for Securing Income While Getting Treatment

Getting a diagnosis of any kind can be difficult. It can signify the need for major changes as well. People who have medical conditions are in many cases unable to maintain their existing jobs. 

If you want to be able to get a steady income during your treatment course, then there are several things that can aid you in a big way. Make a point to explore all of your potential income pathways.

Seek Regular Medical Assistance

It’s crucial for people who have been diagnosed with illnesses of any kinds to seek routine attention from medical professionals. If you have just gotten a diagnosis, then you want to be able to prove it. 

You want to be able to prove that you’re getting treatment for it as well. This may make your journey to getting income go a lot more smoothly. It may minimize setbacks of all kinds.

Speak with a Workers Compensation Attorney

Workers’ compensation is the name of a kind of insurance that can accommodate individuals who have lost out on their wages due to medical conditions and injuries. If you want to get compensation after receiving a diagnosis, then it may help you significantly to set up an appointment with a lawyer. 

Speaking with a workers’ compensation attorney may help you figure out how you can acquire the financial protection you deserve.

Look into Organizations that Can Help You Temporarily

Going through medical treatment of any kind can be taxing. It can eat up so much energy. People who are in the midst of treatment understandably are unable to show up to work daily. 



That’s the reason that there are organizations that are often able to aid them. Research groups that may be able to provide you with financial assistance in your time of need.

Try out Crowdfunding

Getting workers’ compensation insurance is typically a process that requires some time. If you need income quickly, it may help you to test out the concept of crowdfunding. 

There are crowdfunding websites that can aid individuals who are going through medical treatment and who need to stay afloat for a while. It’s not uncommon for people who are going through taxing health concerns to turn to crowdfunding for medical bill coverage and beyond.

Getting a diagnosis can be emotionally draining. It can change your life dramatically, too. If you want to keep your life smooth and comfortable during treatment, then you need to focus on things that can keep your income flowing.

How to Ready Home for Short-Term Rentals

Short-term rental opportunities make it easy to generate a little extra income. Preparing a spare room, unused area, or even the whole home for a short-term rental can be an important undertaking. A clean, orderly, and comfortable household can help to ensure better reviews and more rental opportunities in the days ahead.

Deep Cleaning

The first step towards any make-ready is too deep to clean any room being rented, as well as any common areas. Frequent rentals can allow you to get away with only a single deep clean with some less intense cleaning in between each guest. For an initial rental or for the first rental in weeks or even months, it is always a good idea to scrub everything down fist.

Declutter the Environment

A cluttered environment can lead to many problems. Depriving a guest of the space, they need to unpack or get comfortable is rarely beneficial. Cluttered and disorganized environments can also increase the risk that something gets broken or becomes misplaced. 

Pairing a rental area down to just a few essentials is often the smartest move. If you are transforming or flipping a home basement, you will have a lot of big projects. Use garbage removal services to throw away all your junk and get your rental clean and clutter-free.

Make Sure Everything Works

From light switches and electrical outlets to bathroom fixtures and WiFi access, taking an extra minute to ensure everything is in good working order can help you to avoid unnecessary problems with future guests. Contacting utility providers like electrical contractors to resolve an issue is something that would best be done long before the arrival of a guest.

Providing Amenities

A few amenities like extra towels or access to hot beverages like coffee and tea can help to make a short-term rental far more comfortable. Using the home to generate rental income can be an uphill battle for those who fail to meet the needs of their guests. 

Simple amenities and courtesy items often play a crucial role in ensuring that homeowners are more likely to obtain a favorable rating or review following a short-term rental.

Ensuring a Stress-Free Stay

Anticipating the potential needs of a guest rather than dealing with a problem after the fact often proves to be the best policy. A little care and forethought mean that essential concerns are less likely to go overlooked. Taking a more active approach towards preparing a room or even the entire home for a short-term rental means that problems and complications are less likely to occur.