In the middle of the current ongoing economic changes in India, the housing finance in India has emerged to display some expected and startling trends in the world of housing loans.
Floating Rates
Though hybrid interest rates for home loans have been in India for quite a while, you can be rest assured that most home loan borrowers opt for floating interest rates. Though fixed rates have remained a bit more consistent than the fluctuating floating rates, the floating rates are expanding in the market at a speedy rate due to lower monthly EMIs on home loans. The addition of 0% prepayment charges will also propel the expansion as CRISIL claims that floating rate loans will expand up to 97% by the fiscal year of 2017.
Focus on Credit-Risk Mitigation Measures
The home loans in India have progressedwith time and will continue to evolve with a consistent focus on the credit risk mitigation. With a higher focus on the evaluation of the candidate for the house loans, housing finance companies will continue to offer home loans to the applicable candidates only. Thus, the influx of funds will reach out to help the applicable candidates to borrow funds for their home loan. It is hardly a surprise that the best home loans in India continue to be offered to the salaried segment because they display lower risk than the business counterparts.
NBFCs Growth:
Though there are not more housing finance companies in the market today, the number of branches, number of employees and the market share has grown considerably. Every research and market analysis of the housing loans segment divulges that HFCs or NBFCs (Non-banking finance companies) in India have grown. These organizationsoffer a higher number of home loans in the Indian market today. Since their funding has been diversified from NCDs and fixed deposits, therefore HFCs continue to offer lower and more competitive rates today.
Thus, it can be assumed that the home loan eligibility criteria will continue to be a bit more stringent and in favour of the salaried people. Additionally, it is definitely possible that HFCs will improve their market share over time and attract more customers than the banks. The housing loan borrowers will continue to opt for floating interest rates in spite of the potential irregularities. With more sustainable emphasis on the credit risk mitigation, your interest might be best served if you take the home loan as a co-applicant of the salaried spouse if you are a business man, as these loans will continue to focus on the stability of performance and income in future as well.
