For pre-payments funded out of customer's own resources, the NHB (National Housing Bank ) had last year stipulated that no pre-payment charges should be levied.
To take advantage of lower interest rates, home loan borrowers often go in for mortgage refinance from banks and financial institutions. Lenders, both banks and housing finance companies, currently enjoy a free-hand in levy of pre-payment penalty when borrowers use this refinance option.
NHB is still undecided on whether or not home loan pre-payments financed by other banks and financial institutions should get complete waiver of pre-payment charges.
Mr. R V Verma, CMD, NHB said, “We are looking into the situation of commercial refinance. Guidelines or a circular will be issued on this. We are coordinating with the RBI so that we can come up with norms that could be uniformly applicable to the entire housing finance industry,”
Currently, NHB regulates all housing finance companies. On the other hand, home loans provided by banks are regulated by the Reserve Bank of India.
To take advantage of lower interest rates, home loan borrowers often go in for mortgage refinance from banks and financial institutions. Lenders, both banks and housing finance companies, currently enjoy a free-hand in levy of pre-payment penalty when borrowers use this refinance option.
NHB is still undecided on whether or not home loan pre-payments financed by other banks and financial institutions should get complete waiver of pre-payment charges.
Mr. R V Verma, CMD, NHB said, “We are looking into the situation of commercial refinance. Guidelines or a circular will be issued on this. We are coordinating with the RBI so that we can come up with norms that could be uniformly applicable to the entire housing finance industry,”
Currently, NHB regulates all housing finance companies. On the other hand, home loans provided by banks are regulated by the Reserve Bank of India.
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