In the current home loan scenario,where there is a lot of volatility in interest rates, home loan counselling assumes greater significance. As home loan repayment is a long term commitment, with a large majority of home loan borrowers opting for ten or more than ten years of tenure, they need to be helped with proper financial planning in order to insulate them against the shocks of sudden hikes in EMIs due to cyclic variation in interest rates. NRI Achievers brings its readers thoughts from Vinod Behl, one of the top realty analysts …
It is oft seen many a time that home buyers do not realise or fail to comprehend that the cheapest home loans may not always be the best for them. Home loan buyers are often lured with schemes with initial low interest rates, but later they find themselves in as big financial mess, as banks hike their floating interest rates. Home loan counsellors can really help such borrowers tide over these eventualities through spreading much needed awareness and help them with proper financial planning. They also come in handy to prospective borrowers in selecting the right lender, especially as changing the lender later is not only cumbersome but also involves extra cost. With proper advice, loan seekers could easily opt for a bank that allows a higher limit of loan that can be pre-paid. Counsellors can also guide borrowers about the right time to prepay home loans.
Home loan seekers today really need this sort of expert advice to decide about the loan tenure, especially in the current volatile environment where job security is low and inflation is high. Home loan tenures depend on an individual’s need and financial commitments. Normally a 10-15 years loan tenure is ideal. But prospective home loan takers need to be aware that banks will not allow loan tenures beyond working years. So if one is taking home loan at a higher age, there is no option but to keep the loan tenure low. Generally it is seen that bank DSAs and HFCs in their aggressiveness to sell home loans, do not properly brief clients about these aspects. It is here that home loan counsellors can play a really important role.
Some time ago the National Housing Bank (NHB) had taken a welcome initiative to educate and empower home loan seekers in view of the lack of transparency in the home loan market. The NHB, in association with the Indian Institute of Banking & Finance (IIBF), had prepared a blue-print to introduce trained home loan counsellors to inform and advise home loan borrowers about the intricacies of procedures and other related matters pertaining to legal issues and property valuation. The idea behind this was to help home loan seekers take informed decisions about choosing the right lender and right tenure, and make entire loan process smoother. For that purpose, NHB and IIBF initiated a diploma programme to prepare certified mortgage counsellors to provide their services to prospective home loan seekers across the country.
It is also a matter of great satisfaction that Reserve Bank of India (RBI) is making things easier for home loan borrowers by relaxing the norms for prepayment and norms for shifting to a new bank without having to pay penalty. NHB needs to come forward and put a regulatory mechanism in place to provide a fair deal to home loan seekers. This will also help in giving a major boost to the property market, which is still in its nascent stage of recovery after a prolonged slowdown.