For a middle class person, buying a home is like a dream come true. One has to start saving way before in order to be able to pay for the house. Home loans are efficient means of funding a property purchase. It also helps in long term budget planning and tax saving. Now that the home loan market has become organized, banks cater to every need of the home-seekers by offering easier plans and competitive interest rates.
Supporting the affordable housing policy of the government, RBI has recently eased the home loan norms for properties priced less than 10 lakhs. Till date, banks did not include the stamp duty and registration charges in the cost of the unit for the purpose of calculating loan to value ratio. However, RBI has now allowed the banks to include the registration charges, stamp duty and other documentation charges in the total cost of the property, if it costs less than 10 lakh.
It has been brought to notice that these extra charges amount to 15% of the total value of the property. While financially stable buyers do not pay much attention to it, buyers belonging to the Lower Income Group (LIG) and Economically Weaker Sections (EWS) find it an extra burden on their budget. The new liberal norms will be a relief for these buyers.
As in the construction linked plans where the banks disburse the amount in accordance with the stages of construction, RBI allowed banks to do the same for the projects sponsored by the government. The eased norms will surely help the middle class and EWS buyers to own their dream home.