New RBI norms for home loan
The Reserve Bank of India has brought about many new directives and guidelines for taking Home Loans.
The most controversial decision was the exclusion of stamp duty, registration fees and all other allied charges while calculating the loan to value when taking a home loan.
The loan to value is the loan amount taken against the actual value of the properties in India.
According to the new guideline, a borrower now have to pay a high amount from their resources as the loan that can be approved by the banks will be reduced by about 5 % to 10 %.
The housing loan will not add the stamp duty, registration fees and VAT if applicable. The new guideline will exclude such charges while calculating the value of the property and these expenditures will have to be borne by the borrower.
This additional burden in the down payment structure may discourage the buyers from taking a loan and buying a house. However, the banks are confident that there will not be much impact as the buyer is now actually taking a smaller loan, which will imply lesser interest and smaller EMIs.
As on date this guideline is applicable only to the banks that give home loans. Housing finance institutions like the LIC housing, HDFC, etc. are still providing up to 80% of the total cost of the property which includes the stamp duty and registration fees.
More related stories:
Home loans are likely to be cheaper
Prepayment penalty charge will be waived out
Source: Financial Express
Home loans, Housing loan, Properties in India, registration fees, Reserve Bank of India, Stamp duty, value of the property
