To make it easier for the buyers to realize their dream of owning a home, the government is taking regular steps in this direction. The significant reduction in repo rate at the beginning of this financial year and a lesser risk weight are a few initiatives taken by the government. In another attempt to bring relaxation to the housing finance segment, the RBI has increased the amount of loans the banks can give against a property purchase.
Earlier the banks could give out only 80% of the property’s value as loan; 90% of the value was allowed but only for properties costing less than 20 lakhs. Now this Loan to Value (LTV) figure has been increased to 30 Lakh. Banks can now give out 90% of the value as loan for properties costing less than Rs 30 Lakh. [Read more…]