RBI is the most pivotal regulatory body which majorly governs all types of loans. So, before taking a loan, it’s important to be aware of the RBI guidelines. So why it is important? Being fully aware of the RBI guidelines can turn out extremely helpful to make sure that the lending institution takes the effort to keep adherence to rules and regulations. Also, it’s a legitimate way to ensure that your preferred lender is genuine and is not violating your purchasing power.
The below aspects of RBI guidelines are crucial from Home Loans perspective:
- According to the recent reports, RBI has announced newer guidelines for Home Loans. They intent to make home loans easily available and affordable for the general public. RBI has increased the loan to value ratio to 90% for home loans below Rs.30 lakhs. The lenders are allowed to cover 90% of your home value. Whereas, loans above 75 lacs have a loan to funds ratio over 75%. This is the maximum you can sponsor through a home loan. Higher the LTV, better it is to cover your house purchase price.
- RBI also reiterates that a stamp duty, registration charge and other documentation charges will not be included in calculating LTV. This automatically decreases the value by 10% to be made straight up to the borrower.
- Home Loan prepayment charges are also included under RBI guidelines. Prepayment charges have been eliminated to motivate borrowers to easily pay off the loan, with a sudden spike in income. In a way this will be helpful to shorten your tenure and EMI values, which is beneficial in the longer run.
- Next is Home loan takeover and foreclosure. RBI has built guidelines for home loan takeover as well. This way you can refinance your home loan at lower rates of interest and a tenor that fits you well. RBI has also waived off foreclosure charges altogether, in addition to a few other benefits that are extremely valuable to borrowers.
What are the major highlights of RBI Guidelines for Home Loan?
- RBI guidelines have made Home Loans way easy
- Once you take a home loan, its simpler to refinance your house at a reasonable rate of interest and tenor.
- RBI has deleted prepayment charges for borrower