Buying a home is a major investment decision that needs to be taken after researching the mortgage industry thoroughly, especially now that COVID lockdowns have started easing. After all, the latest regulations and trends in this industry can affect you in more ways than one. Moreover, you need to account for the demand and supply dynamics in the housing industry, before you decide what kind of house to buy and how you can best finance the purchase without hurting your financial stability.
So, read on to explore these in detail and make house-shopping less daunting.
Also Read: Quick Guide to Mortgage Loans Trends in the Mortgage Industry When you decide to buy a property, the most important question that arises is how to arrange for the necessary funds or avail a
home loan. So, first, it is important to look at the mortgage market to understand the latest trends.
The good news on the interest rate front is that major
financial institutions have reduced the Prime Lending Rate (PLR) by 20 - 25 basis points following a repo rate cut by the RBI in May 2020. As the RBI has been slashing repo rates by 115 basis points since March 2020, the benefit is being passed on to home loan borrowers by major lenders.
- Ease of loan default norms
The RBI has extended support to retail borrowers in the form of loan moratoriums, which they can opt for if they face any difficulty while paying EMIs. As a borrower, you can go for a loan moratorium without affecting your
credit score. This can help your liquidity position during these difficult times.
- Government support – Affordable housing initiatives
The Government has been extending support to the lower and middle income groups through
Pradhan Mantri Awas Yojana and Credit Linked Subsidy Scheme(CLSS) for MIG, where depending upon the income level, the borrowers become eligible for loan interest subsidy. Also, for first-time home buyers, the interest on home loans can be claimed for exemption under section 80EEA of the Income Tax Act, and this benefit has been extended till March 2021.