Mandatory RBI Guidelines that Everyone Should Know Before Applying for a Home Loan
When you’re taking a Home Loan, it is important to be aware of RBI guidelines for Home Loans to ensure that your lender is keeping true to government policies and not overcharging you. Since a Home Loan facilitates your dream home, it is important to be careful and pay attention to each little detail before signing on the dotted line.
According to the latest reports, the Reserve Bank of India has set new guidelines for Home Loans. To encourage Home Loans and make them more affordable and customer friendly, RBI has increased LTV (Loan to value ratio) from 80% to 90% for Home Loans below 30 lakhs. This means that 90% of your home value may be funded by lenders, making it easier for you to purchase a home via a Home Loan.
RBI further suggests that stamp duty, registration charges and other documentation charges should not be included while calculating LTV, thus lowering the 10% payment that the borrower has to make upfront.
RBI Guidelines for Home Loan Prepayment Charges are also very important. The RBI has abolished prepayment charges to encourage borrowers to pay off the loan in case of an increase in their income. Prepayment can either help you reduce your tenure or reduce your EMIs, which is very beneficial.
RBI has set guidelines for Home Loan takeover as well so you can refinance your Home Loan at lower interest rates with EMIs and a tenure that suits you. RBI has also waived off foreclosure charges, thus benefiting the borrower.
Here is an infographic that explains the mandatory RBI guidelines and will help you choose the right Home Loan: