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Owning a home is the ultimate goal of any individual. In the way of getting fulfilled, earlier this aspiration had many obstacles which included inconvenient means of taking loans. But the advent of banks and more specifically to point, the availability of “home loans” has made the dream of buying a property more feasible. Various policies of banks including home loans are not stagnant these policies are regulated by the apex institution called the Reserve Bank of India. RBI guidelines for Home Loan 2022 hold such regulatory criteria, which we are going to discuss in this blog.
In the new home loan rules set by the RBI, there is no change in repo rate, but significant changes are there in loan to value ratio, prepayment charges, and balance transfer facilities, let’s look at these in detail.
The Repo rate is the rate at which the central bank of India (RBI) lends money to all the commercial banks. In the new loan guidelines, RBI has kept the repo rate unchanged at 4.9% and the reverse repo rate at 3.75%.
The 4.9% repo rate means, the commercial banks are taking loans at 4.9% from the RBI. Certainly, the increase or decrease in the repo rate affects a commercial bank’s loan strategies.
Loan to value ratio can be best understood by the loan you desire to take against a property.
You should also keep in mind that even if you find the perfect home immediately, working out all the details with the seller can take some time. However, a proper understanding and awareness of the entire process can help you move the process forward in a smooth manner.
For example, if you want to apply for a loan on a property with INR 1 crore market value, and the appraised amount after checking the eligibility criteria is INR 90 lakhs on the property, then the formula would be loan amount/appraised value x 100 = LTV. In this case, 90L/1CR x 100 = 90% is the LTV that the bank is providing you with the loan.LTV holds importance if you are seeking a home loan as it helps a lender/bank to come up with the decision to approve your home loan.
It is crucial to note that fresh or recently bought property has the chance to get higher amounts of the loan compared to the old property with tantalizing features. To make housing loans in India more affordable RBI has removed stamp duty, registration charges, and documentation charges from LTV.
As the name suggests, prepayment charges are applicable when you pay the sums of lent money before the due date of your loan ending period. For instance, you have acquired a loan of INR 1 crore to be paid in 30 years, but due to a profit in your business or a hike in the salary, you want to pay the money before the end of 30 years loan period.
As the name suggests, prepayment charges are applicable when you pay the sums of lent money before the due date of your loan ending period. For instance, you have acquired a loan of INR 1 crore to be paid in 30 years, but due to a profit in your business or a hike in the salary, you want to pay the money before the end of 30 years loan period.
1. In case you want to shift your home loan from one bank to another bank, you can now shift without paying any foreclosure charges as per the new home loan rules by the RBI. This wave-off will give the borrowers to switch from one lender to another at the behest of low-interest rates.
In case you want to shift your home loan from one bank to another bank, you can now shift without paying any foreclosure charges as per the new home loan rules by the RBI. This wave-off will give the borrowers to switch from one lender to another at the behest of low-interest rates.
The following points must be well-researched:
Interest rates and loans are the backbones of the functioning of a bank. Reserve Bank of India’s objective is to encourage people to buy more loans to balance commercial banks’ income, hence, the RBI makes changes in the home loan guidelines over significant periods. It’s also important to ensure that you consider the right builder like Nilaya Greens who provides constant support when it comes to home loans.
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Guided by absolute commitment, customer focus, innovation and professional expertise gained over the years, Nilaya endeavors to emerge as one of the key players in real estate construction and development in India.
The Nilaya Group's mission is to deliver best quality infrastructure in the minimum possible cost to the customer. With this commitment, the group aspires to significantly contribute towards improving the quality of life of its customers, via strengthening and expanding its established position, thus becoming the first choice for existing and prospective clients.
We strive to provide value for money to customer, by timely delivery of quality homes at reasonable prices, through transparent and ethical policies and procedures, as a part of our commitment to the national mission of providing homes to millions of people.
