Thursday, November 11, 2010

RBI's stance on home loans to increase borrowers' woes

"Every borrower should examine his repaying capacity rather than his loan eligibility"
"If the property value dips any point of time, banks can ask for additional collateral. At this point of time, you have to provide additional collateral or pay the extra margin money. If you are not in a position to pay up the extra cash/collateral, the bank can categorize you as a defaulter. This is clearly mentioned in the home loan agreement."
“Don’t borrow up to the maximum limit as a percentage of your income. You should keep aside some contingency funds and investments which will come in handy in case of unforeseen emergencies such as job loss, forced sabbatical or even a family."

Home hunters are in a spot. While real estate prices are not showing any signs of easing (in fact, they have started hardening again), the Reserve bank of India (RBI) has chosen to tighten a few norms for home loans , adding to borrowers’ woes. In its recent policy review, RBI has taken three steps that will adversely impact prospective homebuyers who are dependent on home loans. To begin with, the loan-to-value ratio has been lowered to 80% from 85%.
To read more, please, visit:
The Economic Times

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