housing finance (1).pptx
TRANSCRIPT
-
7/27/2019 Housing Finance (1).pptx
1/19
Housing finance
It refers to finance provided to individualsor groups of individuals including co-operativesocieties for purchase or build house or
houses.The purpose of a housing finance is to
provide the funds which home buyers need topurchase their homes. The objective is simpleand the number of ways in which it can beachieved is limited.
-
7/27/2019 Housing Finance (1).pptx
2/19
Housing finance is what allows for the
production and consumption of housing.
It refers to the money we use to build and
maintain the nations housing stock. It also refers
to the money we need to pay for it, in the form
of rents, mortgage loans and repayments.
Contd
-
7/27/2019 Housing Finance (1).pptx
3/19
RBI has stated that banks are free to
decide the guidelines on accepting such as age
of dwelling units, repayment schedules, margin
and security with the approval from the board.
The purpose of a housing finance system is
to provide the funds which home buyers need to
purchase their homes.
-
7/27/2019 Housing Finance (1).pptx
4/19
Types of housing finance
Direct finance
Supplementary finance
Indirect finance
-
7/27/2019 Housing Finance (1).pptx
5/19
Housing finance types
Home purchase loans
The basic home loan you can opt for purchasing
new home. This type of home loan is offered by all
kinds of banks and Housing Finance corporations.
Home construction loans
Especially meant for the construction of a new
home. The plot on which the construction is beingerected is purchased within a period of one year, the
cost of the plot is then included as the component for
the valuation of total cost of the property.
-
7/27/2019 Housing Finance (1).pptx
6/19
Home extension loans
Home extension loans are offered for meeting
the operating cost of alteration to an existing building.
Extension here means addition of an extra room etc.
Home conversion loans
Are offered to those who want finance for the purchase
of another home by converting the already existing
home and on which loan is already sanctioned . Thereis no need for prepayment of the previous loan.
Contd
-
7/27/2019 Housing Finance (1).pptx
7/19
Land purchase loans
This kind of loan can be availed for purchasing
land for both home construction as well as investment
purposes.
Stamp duty loans
It is offered for the payment of stamp duty in the
transaction of the property.
NRI Home LoansAre meant for NRIs who wish to build or buy a
home or expand the home in India.
Contd
-
7/27/2019 Housing Finance (1).pptx
8/19
Bridge loans
Are offered for selling the existing home
and purchasing of another. The bridge loan
assists in the finance of new home, until a buyer
is found for the old home.
Refinance loans
Loans are availed when a loan from an
organization at a particular ROI is dropping
leading to a loss.
Contd
-
7/27/2019 Housing Finance (1).pptx
9/19
Housing Urban Development Corporation(HUDCO) which was financing only the
government housing, has entered into the
launch of its HUDCO Niwas Scheme. Theprojects are in Delhi and most of them are
already occupied and its helping in contributing
to the developments happening in housingfinance.
Institutions offering housing finance
-
7/27/2019 Housing Finance (1).pptx
10/19
Bank Of Baroda Housing Finance
The bank helps by lending the loans to
purchase of new/old dwelling unit
Construction of plot/land
Repaying a loan already borrowed
Repayment period up to 30 years.
Interest rate is 10.25% wef 09/02/13
Examples of institutions
-
7/27/2019 Housing Finance (1).pptx
11/19
Can Fin Homes Ltd.Biggest Bank sponsored HFC since 1987
Interest rate 10.95%
Quantum of loan 75% to 85%
Interest up to 30 lakhs 10.95%
30- 75 lakhs- 11.20%
Above 75 lakhs -11.50%
Rural Housing Scheme 9.95%
Contd
-
7/27/2019 Housing Finance (1).pptx
12/19
Dewan Housing Finance Ltd.
The tenure of the home loan ranges from 1
to 20 years.
DHLF offers one of the most competitive
rates in the market.
The interest rate applicable is based on the
DHLFs retail prime lending rate which
fluctuates from time to time based on the
money market conditions.
-
7/27/2019 Housing Finance (1).pptx
13/19
Real estate market crumbles as economyslows.
Keith Bradsher , Neha Thirani Bagri,
Sept.11 2013 , New York Times NEWS service.Publicly traded real estate investment
groups in India are heavily in debt, so they
struggle to make interest payments and are notin a position to bankroll further projects.
Housing Slump
-
7/27/2019 Housing Finance (1).pptx
14/19
The second reason for the said above isthe loss is more serious with the developers
holding growing inventories of unsold
apartments, shops and offices without offeringprice discounts.
One longstanding complaint about
business practices in India is that the countrysbanks lend heavily to a wealthy elite who often
put very little of their own money into deals.
Contd
-
7/27/2019 Housing Finance (1).pptx
15/19
Housing finance has played a small role inthe Indian Banking system , so Indian banks are
less vulnerable to real estate downturns than
banks in the western countries.
Contd
-
7/27/2019 Housing Finance (1).pptx
16/19
Income
Age
Qualification
Work experience
No. of dependents
Spouse s income Stability of income and employment
Assets and liabilities
Factors influencing housing finance
-
7/27/2019 Housing Finance (1).pptx
17/19
Tax implications on home loan
Tax deduction benefits on loan repayments onmore than one property
Tax implication on pre EMI
Tax benefits are available from the financial yearin which the construction is completed.
Tax benefit for home loan processing fee is
available under sec 2 (28A)
-
7/27/2019 Housing Finance (1).pptx
18/19
Contd.
Home loans are cheapest loans available inthe market.
Tax rebate on interest repayment of homeloan up to 1,50,000 / -
Tax rebate on repayment of principal up to1,00,000/- under sec 80C.
A maximum of 1 lakh /year of principal
repayment can be availed as deduction fromsalary under this section.
-
7/27/2019 Housing Finance (1).pptx
19/19
Contd
Deduction under Sec 24(b) of the IT act - A
minimum of 1.5 lakh per year of interest
repayment can be availed as deduction from
salary.