Noida: For 45 per cent of prospective homebuyers rising interest rates for home loans remains an impediment in buying their dream house, revealed a consumer poll by Magicbricks.
The consumer sentiment was reflected following last month’s hike in repo rate by the Reserve Bank of India (RBI). The repo rate, the rate at which RBI lends short-term money to banks, was increased by 25 bps (basis points) to 6.25 per cent. The central bank has also increased the reverse repo rate, the rate at which RBI borrows from commercial banks, to 6 per cent.
Long Payback Period also Worries Homebuyers
Magicbricks poll also reflected the fact that long payback period is a worrying factor for around 27 per cent borrowers, whereas, 21 per cent feel that the tedious process of applying for a home loan is the biggest problem. Only 7 per cent of borrowers feel that it is easy to get a home loan these days.
“Home loans are available from mainly two types of lenders – commercial banks and housing finance companies. Different lenders may quote different rates of interest and other terms and conditions, so homebuyers should contact several lenders to make sure you are getting the best value for money,” said E Jayashree Kurup, Head, Editorial and Advice, Magicbricks.
Increase in the rate of interest is a matter of concern for homebuyers who are planning to buy a house at this time. Many banks have also simplified the process for those customers whose credit history is clean. Buyers with a clean borrowing track record and consistent income are likely to avail a hassle-free loan.
Repayment – A Major Concern for the Banks
The main concern of banks these days is to make sure that the borrower can comfortably repay the loan on time. The higher the monthly disposable income, higher will be the loan amount you will be eligible for.
Typically, a bank assumes that 55-60 per cent of your monthly income is available for repayment of the loan. However, some banks calculate the income available for EMI payments based on an individual’s gross income and not on his disposable income.
While applying for a home loan, banks ask for all legal documents relating to the house being bought – identity and residence proof, latest salary slip, Form 16 and last six months bank statements/balance sheet. If all your documents are clean and as per the bank requirements you should not face any problem in availing a home loan.