Home loans: Making most of headwinds
NHB is considering a proposal to increase the loan-to-value ratio (LTV) for home loans to 90% of the property value from the current 80%, which would mean home loan borrowers can take loans up to 90% of their property’s value
Aug 23, 2014
Source : The Financial Express
Housing and Development Finance Corporation

 

Banks and non-banking financial companies (NBFCs) are getting active to make sure they get the maximum number of home loan borrowers when growth in real estate picks up.

HDFC has announced a discounted interest rate of 10.15% for all new borrowers irrespective of the loan amount. The new scheme has been in force since the month of August 2014. Bajaj Finance, an NBFC, followed suit with a new home loan scheme, under which borrowers need not pay instalments for the first three months.

State Bank of India is offering women borrowers an interest rate of 10.10% for home loans above R75 lakh while ICICI Bank is giving a further 0.05% discount with loans available at 10.10%.

Since the tenure of home loans is usually quite long, there are bound to be cyclical highs and lows for interest rates, but such discounted schemes help borrowers make quick decisions, especially if they have been waiting for the right opportunity to take a home loan.

Rising loan-to-value ratio

If tax benefits and discounted interest rates are not enough, here is more good news for new home loan seekers. National Housing Bank, or NHB, is considering a proposal to increase the loan-to-value ratio (LTV) for home loans to 90% of the property value from the current 80%. Once implemented, this would mean home loan borrowers can take loans up to 90% of their property’s value.

This new rule can be effective for people with small savings, who have so far been unable to save the minimum 20% margin money that institutions expect the borrower to invest.

The new changes in the LTV rule, once effective, would only be made available for home loans above the minimum threshold limit of R20 lakh.

Note that a higher LTV only reduces the margin money to be raised by the borrower while increasing the quantum of the home loan and, hence, the total interest cost of the loan. Do bear in mind though that home loan funds are not provided for stamp duty and registration costs and borrowers must keep some part of their funds for registration fee and stamp duty charges.

The recent announcement by finance minister Arun Jaitley in his annual budget speech has given a positive impetus to the infrastructure and real estate sector. The finance minister allocated R4,000 crore for low-cost housing, encouraging more real estate developers to bring in low-cost projects.

Latest Realty News

ACB books Goa Housing Board officials in Colvale plot scam
Aug 22, 2014
Anti-Corruption Branch (ACB) of the directorate of vigilance has booked officials of Goa Housing Board in the sale of commercial plot scam at Colvale.
Only three cities across the world cheaper than Bhubaneswar: Survey
Aug 22, 2014
A global online survey has ranked Bhubaneswar as the fourth least expensive among 446 cities in the world
DDA drops 80% quota for locals
Aug 22, 2014
DDA's upcoming housing scheme received an 'in-principle' approval, with some changes in the original proposal, by the chairperson of the authority
Power officials let flat builders flout rules: PIL
Aug 22, 2014
A PIL filed in the Madras high court has said officials in charge of power distribution are indifferent to violations by apartment promoters, who seldom set aside open space for installing transformers within the residential complexes, though it is mandatory as per the Tamil Nadu Electricity Distribution Code
Corporation names property tax defaulters on its website
Aug 22, 2014
The city corporation has finally uploaded on its website the list of property tax defaulters in Chennai, Malls, star hotels, govt among major property tax defaulters
Inspection heat on town planner flayed for not inspecting 4 colonies
Aug 22, 2014
Four RWAs — Mayfield Gardens, Parasvnath Exotica , Uppal's Southend and Ardee City-I — have come down heavily on the senior town planner for not carrying out on-spot inspections, despite several requests and even an order from deputy commissioner Shekhar Vidhyarthi
Flat buyers threaten stir over delay in possession
Aug 22, 2014
Home buyers, who have invested in various projects by the Jaypee Group, on Thursday threatened to stage a protest next week against the developer for not delivering their flats on time
Realty demand looking up: Credai
Aug 22, 2014
The Confederation of Real Estate Developers of India (Credai) said the property market across the metros in the country was looking up and it expects good absorption in residential property in the next 6-9 months
Interest subsidy for low-cost housing to be hiked up to 5%
Aug 21, 2014
Home loans for the underprivileged are set to get more affordable with the government planning a new interest subvention scheme, which will meet part of the home loan burden
Civic Bodies Directed to Ensure Friendly Buildings
Aug 21, 2014
Promoting accessibility for all, State Government has directed the civic authorities to incorporate barrier-free facilities in all the public buildings on a priority basis

Latest Realty News Of State

Realty Talk's