A couple of good news for the property buyers. First one is that the home loan interest rates are at rock bottom. It helps to increase the home loan eligibility of a property buyer thus increasing affordability. The second one is that in the recent past, I observed that builders have started offering indirect discounts to the property buyers. In my previous post, I shared how the builders are controlling/managing the rates in Primary Market Rates. The indirect discount is the 2nd step if the builders fail to attract buyers i.e. not able to control or manage the property prices. The next ... Read More
MCLR Cut – 7 Myths and Misconceptions Among Home Loan Borrowers
"Sharp MCLR Cut brings relief to the home loan borrowers" read one of the news posts. On top of it, the senior management of the banks appealed existing home loan borrowers to shift to MCLR to take advantage of MCLR cut. I received large no of queries on my blog on how to take benefit of MCLR cut. In certain cases, wherein i suggested the readers that they will not be benefited immediately, i received some angry reactions :). The readers thought that i am trying to mislead them. But once they approached the bank and clarified the points shared by me, their apprehensions were gone :). Let me ... Read More
Home Loan Conversion Fees – 7 Myths Every Borrower Should Know
Home Loan conversion fees is one of the mysteries for home loan borrowers. I receive multiple queries wherein borrowers paid Home Loan conversion fees multiple times but still their home loan interest rate is more than the interest rates offered to the new borrowers. I have covered this topic in my post, Why higher interest for existing home loan customers? The problem here is that existing borrowers have NO other benchmark to compare. I also agree that home loan interest rate offered to new borrowers should be the benchmark for existing borrowers. Let me share an interesting case in this ... Read More
Why Banks Are Forcing Existing Home Loan Borrowers To Switch to MCLR
In recent past, some of the readers of this blog posted queries on a switch from Base Rate to MCLR (Marginal Cost of Funds based Lending Rate). The queries were similar in nature i.e. credit/loan manager of the bank suggested them to shift from base rate to MCLR. These are the borrowers who availed home loan before 1st April 2016 linked to base rate. The home loans availed on or after 1st April 2016 are by default linked to the MCLR. Therefore, this post is relevant only for borrowers whose home loan is linked to the Base Rate of the bank. It is observed that the loan manager of the banks ... Read More
The Most Popular Subvention Schemes
In my opinion, Subvention Schemes are the last lifeline for real estate sector. Currently, the sector is going through a rough patch. In a last ditch effort, builders are rolling out offers under Subvention Schemes to attract buyers. As an unwritten understanding among builder community, a direct discount on the rate card cannot be offered. Moreover, declining sales and ever growing debt burden are forcing builders to offer innovative marketing schemes. These offers can be labeled as Subvention Schemes as most of these offer indirect discounts. In my post, 7 Risks Associated with Subvention ... Read More
Home Loan for Women – Is it true?
Home Loan for Women at Concessional Interest Rates reads one of the hoardings near my house. My wife called one of her friends and told her about the Home Loan for Women. Her friend is a single working woman and looking for a flat in Noida. I knew that bank will not lend to a single women borrower at any cost. As i was not in a mood to dampen the spirit and enthusiasm of 2 friends, therefore, i was a mute spectator to this discussion. After few weeks, her friend called me and told me that bank is not approving her so-called "Home Loan for Women". The bank was demanding either a co-applicant or ... Read More