Loans from housing finance companies area expected to get dearer

By | May 14, 2011

A recent press report said that the loans from housing finance groups are expected to become dearer in the future. Mr. R. V. Verma, Chairman and Managing Director, National Housing Bank told the press that the will be effects on the demand for home loan will be effected due to the growing interest rates and high property prices.

He said that the property prices in many of the large cities are going high and so potential buyers are postponing their plans to buy a house. He added saying that the home buyers are more worried about the current property prices than the growing interest rates. He suggested that the builders should clear their inventory of unsold housing stock by cutting prices.

Mr. Verma said that loan from housing finance companies (HFCs) could get dearer and that NHB has planned to increase the general provisioning requirement for these companies for their portfolio of ‘standard retail housing loans’.

He said that the provisioning requirement of NHB will be increased from 0.25 per cent to 0.40 per cent.

National Housing Bank regulates the activities of almost 55 housing finance companies based on regulatory and supervisory authority derived under the NHB Act, 1987.

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About Pradeep Yuvaraj

Pradeep Yuvaraj is a Co-Founder and Director at Finerva Financial Solutions Private Limited, a financial education company focused on personal finance education. He has penned over 250 articles relating to Personal Finance and clocked over 500 hours of educating individuals on managing personal finance. He is a serial entrepreneur and has been associated with 7 Start-ups. His entrepreneurial experience spans industries as varied as Education, Gas Engineering, Automobile Design, Software development and more recently a Pure play presentation design company. Prior to turning entrepreneur in 2005, he has worked for 3 of the top ten companies of the world - Shell, ExxonMobil and Total SA. This experience included handling Branch Operations, Channel Sales and Business Development across 5 states over a period of 8 years. He holds an MBA from Symbiosis and an Electronics Engineering Degree from the University of Pune.

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