A PROJECT REPORT ON

HOME LOANS

SUBMITTED TO
UNIVERSITY OF MUMBAI

BY
APEKSHA.K.SHETTY
T. Y. B.M.S.

YEAR 2005-2006

THROUGH
TOLANI COLLEGE OF COMMERCE
ANDHERI (EAST), MUMBAI – 400 093
 CERTIFICATE

I, Dr. A. A. Rashid, hereby certify that Ms. Apeksha K. Shetty of

Tolani College of Commerce, T.Y. B.M.S. (Semester V) has completed

her project titled HOME LOANS in the academic year 2005-2006. The

information submitted herein is true and original to the best of my

knowledge.

Dr. A. A. Rashid Dr. Sheela Purohit

(Project Guide) (Principal)
 DECLARATION

I, Apeksha K. Shetty, of Tolani College of Commerce, T.Y. B.M.S.

(Semester V) hereby declare that I have completed my project titled

HOME LOANS in the academic year 2005-2006. The information

submitted herein is true and original to the best of my knowledge.

Place: MUMBAI Apeksha K. Shetty

Date:
 ACKNOWLEDGEMENT

At the outset I take the privilege to convey my gratitude to those who

have co-operated, supported, helped and suggested me to accomplish the

project work. This project work bear’s imprint, of many persons who are

either directly or indirectly involved in the completion of it.

I am also desirous of placing on record profound indebt ness to my guide

Prof. Dr. A. A. Rashid Tolani College of Commerce, Andheri for the

valuable advice, guidance, precious time and support that he offered.

There is one person who has been a constant source of encouragement

and help, Mrs. Akshata Kadam, I hereby acknowledge all her efforts.
 Objectives

1. To determine home loans and its type available in market

2. To analyse Indian home loan market and its growing trends.

3. To determine different banks providing home loans and its

structure.

4. To analyse modus operandi of home loans.

5. To analyse different steps in getting home loans.

6. To determine impact on budget 2005.

Home loans
 Table of Contents
Topic No. TOPICS Page No.

SECTION I
1. Executive Summary 2–3
2. Introduction 4–5
3. Types of Home loans 6–9

SECTION II
1. Indian Home loan market 11 – 14

SECTION III
1. Companies providing Home loans 16 - 30
2. Housing loan rates 31 - 32

SECTION IV
1. Loan process 34 - 35

2. Why to take a home loan? 36

3. Choosing a loan 37 – 42
4. Choosing a Housing finance company 43
5. Steps involved in getting a home loan 44 - 45
6. When to refinance loan 46
7. Impact of budget of 2005 on Home loan 47 – 49
SECTION V
1. Survey analysis 51 – 60
2. Conclusion 61
3. Bibliography 62
Section I

1
 Executive summary

Roti, kapada aur makaan has been the guiding light for mankind since time
immemorial. Throughout the world to own a house has been one of the cherished
dreams. The economic reforms over the past few years have led to a significant
decline in the housing finance interest rates. The southward movement in
interest rates, together with tax sops associated with home loans, has made
opting for a housing loan almost a must when one thinks of buying a house. So
when India's richest man and software major Wipro's chairman Azim Premji
wanted to build a house (a palatial farmhouse, to be precise), even he went for a
housing loan. Premji draws an annual salary of Rs 2.4 crore and he is estimated
to be worth nearly Rs
40,000 crores.

True, personal incomes are going northward these days, but so are the expenses.
And home loan is the only option for a majority of home-dreamers. Home loan is

2
the only route that a common man can take to fulfill his dream. And then there
are those who want to buy their own home, are eligible for home loans, but can't
arrange for the down-payment part, which comes out to be at least 15 per cent of
the property value. More than often, this small percentage runs into Lakhs and
this is no small amount for a common man
Thankfully, banks and housing finance companies (HFCs) are more-than-ever
ready to happily finance your dreams – no matter whether you are Premji or
just another common man. With the ensuing cutthroat competition in the
housing finance market, banks and HFCs are always going that extra mile to
lure potential customers. While, the lowering of interest rates and hefty
discounts are likely to have reached their optimum levels, there are charting new
territories to expand their reach. The latest carrot on offer is 100 per cent or
more financing or zero down-payment loans for your dream home.

3
 Introduction
Definition

1. A "home loan" is a credit to a consumer for the purchase or

transformation of the private immovable property he owns or aims to
acquire secured either by a mortgage on immovable property or by a
surety commonly used in a Member State for that purpose.

2. A home loan requires you to pledge your home as the lender's security for
repayment of your loan. The lender agrees to hold the title or deed to
your property until you have paid back your loan plus interest.

Thus in the simplest terms home loan is the loan taken from any financial
institution for the purchase of newly home by paying interest as agreed during
the deal. Thus the rate of interest depends on the bank as also it differs from
banks to banks. Some banks may charge higher price where as some banks
charge low price.

Typically, banks and HFCs offer up to 85 per cent of the property cost as
housing loans. The total cost of the property include various charges as
acceptable to the HFCs, such as agreement value of the property, stamp duty
and registration charges, society transfer charges, garage charges for parking
cars, electricity and water connection charges, as well as cost of additional
furnishings done by the developer or builder, for which an amenities agreement
has been entered into between the customer and developer that has been duly
stamped and registered.

However, there are selected banks that offer 100 per cent or even more financing
for your dream home without any extra efforts from your side. You just need to
ask the representatives of these banks or their authorized agents for these offers.

4
On standard home loan products, Citibank claims to offer home loans up to 90 per
cent of the property value, the highest from any bank. Lately, Citibank has come
up with a new home loan product that it calls "zero down payment loan”.
According to a loan calculator provided by the bank on its website, a person with
monthly income of Rs 30,000 is eligible for a dream home for up to Rs 16,28,372
with a 15-year loan under this zero down payment plan. Incidentally, the loan
amount is same under the bank's standard home loan plan on similar metrics,
according to the web-based calculator

ICICI Bank, a major player in the housing finance market, also offers "Special
100 per cent funding for select properties”, claims the bank's website. However,
the bank offers only 85 per cent of the property cost as home loans under its
standard plans. The bank sources admit, however, that 100 per cent financing is
considered in special cases.

5
 Types of Home Loans

The type of loan depends on

1) Purpose of loan
2) Nature of the loan (Term Loan or Overdraft)
3) Nature of interest (Floating or Fixed)
4) Interest rates (Daily, Monthly, Quarterly, Semi-Annually or Annually
Reducing Balance)

1. Purpose of loan
Loan from banks and Housing Finance Companies (HFC) can be taken for
the following reasons

™ Construction of Property
™ Purchase of Property
™ Site Loans
™ Extension of Property
™ Repairs and Maintenance of Property

2. Nature of the loan

Most of the HFCs offer term loans; banks offer both Term loan and
Overdraft facilities. In case of Term Loans, the loan amount is fixed and
interest is charged on the whole loan amount. You should opt for a term loan
when you want to make a fixed installment payment for the property. An
ideal situation for term loan would be buying of an under construction or
ready property where the loan amount you will opt for is known in advance.
Overdraft facility is preferred where the amount required is not
determinable.

6
Example
When the loan is taken for repairs and maintenance.

a. Term Loan

Pros
a. The period of term loan can go up to 30 years.
b. Once the loan is disbursed there is no yearly review

Cons

a. In case of earlier payment, pre-payment charges are levied.

b. A fixed liability is created every month this takes away flexibility.
c. Interest is charged on full amount of loan though it may not be
utilized

b.Overdraft Facility

Pros

a. Interest is charged only on the amount drawn.

b. There is no fixed liability every month.
c. The loan can be repaid earlier without any pre-payment charges

Cons

a. The loan facility is restricted to one year. It may be renewed after

bank reviews the facility.
b. There is a commitment charge involved, and if the loan facility is
not availed a commitment fee is will be charged.
c. The interest rate is higher than interest charged on term loan.

7
3. Nature of Interest

a. Fixed Rate Plan

In fixed rate plans, the rate of interest remains the same through
the tenure of the plan.

b. Flexible Rate Plan

In the flexible or floating rate plan, the interest rate is pegged to

the bank's retail prime lending rate (RPLR), and varies with
fluctuations in the RPLR. Since the risk of such fluctuations is
borne by the borrower, flexible rate plans quote lower interest
rates as compared with fixed rate plans.

4. Interest Rate
Interest Rate can be defined as the principal outstanding on the date, which is
considered to calculate the interest.

Example
When we say Monthly Reducing Balance, it would mean that interest is calculated
on the principal outstanding at end of every month after taking into consideration
payment of the EMI. As a result, for a loan of an identical amount, tenure and
interest rate, the EMIs for monthly rests are lower than they are for a plan with
annual rests

8
If you take a loan for Rs. 1,00,000 for 5 years your monthly installment will work
out as follows:

Reducing
10.50% 11.00% 11.50% 12.00% 12.50% 13.00% 13.50% 14.00%
Balance

2142.51 2167.05 2191.76 2216.64 2241.68 2266.90 2292.27 2317.82

Daily

2149.39 2174.24 2199.26 2224.44 2249.79 2275.31 2300.98 2326.83

Monthly

2163.57 2189.06 2214.71 2240.52 2266.50 2292.63 2318.92 2345.37

Quarterly

Semi- 2184.69 2211.13 2237.72 2264.47 2291.36 2318.41 2345.61 2372.96

Annually

2226.46 2254.75 2283.18 2311.75 2340.45 2369.29 2398.26 2427.36

Annually

Lets say, Bank A is offering you a loan at 14% rate of interest, annually reducing
and Bank B is offering you a 15% monthly reducing. You may first look at the
lower interest rate and may be tempted to select Bank A. But your monthly
installment in case of Bank A would be Rs. 2427.36 as against monthly
installment to Bank B of Rs. 2378.99. Your loss over the period of 5 years would
have been Rs. 2902.

9
Section II

10
 Indian home loan market

The housing sector plays an important role in the economic development of the
country. Every rupee invested in housing adds 78 paise to the GDP. Over 269
industries are directly or indirectly dependent on the housing sector.

There is an estimated shortage of 20 million housing units in the country with an

estimated investment requirement of over Rs 1500 billion. In this context it is
important to note that the organized housing finance industry barely accounts
for 30% of the home loans disbursed in the country.

The last few years have seen the home loans market growing at a CAGR of over
30 percent. The growth has been mainly fuelled by certain fiscal, social and
regulatory drivers as follows:

1. Changes in demographic profile including increase in the rate of

household,
Formation due to structural shift from joint family system to nuclear
family.

2. Ever increasing middle class, migration of population and increasing

urbanization resulting in acute shortage of housing units.

3. Increase in disposable income levels due to decrease in marginal tax rates

and increase in total income levels.

4. Aggressive lending by banks to the housing sector due to lower credit

offtake by the corporate sector, attractive spread and lower non
performing assets.

11
Growth trends

The Indian housing finance industry has grown by leaps and bounds in past few
years. Total home loan disbursements by banks and housing finance companies
(HFC’s) has risen from Rs. 29359. 29 crores in 2001- 2002 to Rs. 51672.7 crores in
2002 – 2003 witnessing a phenomenal growth of 76 % during this period.

Home loan disbursements (in Rs. Crores)

Year HFCs Banks Total Growth over previous year %

2000 - 01 12637.85 9787.24 22425.09 13.70

2001 –02 14614.44 14744.85 29359.29 30.72

2002 – 03 17832.17 33840.53 51672.7 76.00

Source: National housing bank

The robust growth experienced by the industry in the last few years has been
triggered by the number of factors as given below:

1. Tax rebates on housing loan announced in the recent budgets.

2. Lowering of real estate prices to affordable levels.
3. Greater amount of professionalism being exhibited by developers and
builders who are today acquiring clearer titles and are doing more timely
completion of projects.

12
 4. Slashing of interest rates on home loans: fixed interest calculated on an
annual rest basis for a loan of Rs. 5 Lakhs and tenure of 15 years has
fallen from 16 % in 1997 to 10.5 % in 2005. This declining trend is
expected in the coming years.

16 %

10.5

1997 2005

In the recent development, foreign bank has announced 6 % rate of interest for
housing loans during the first year of the life of the loan and 6.5 % during the second
year. The rate will be pegged at 50 basis point above the housing PLR in the
subsequent years. This development bring into light the aggressive strategies
used by foreign banks to woo retail consumers and to grab a share of this
growing mar

13
The impact that lower interest rates have been had on home loan disbursements
can be seen from the following graph

14. 50
60000
51672.7
14.00
50000
13.50
40000
13.00
30000 29359.29
22425.09 12.50
20000 19723.36
12.00

10000 11.50

0 11.00

1999 – 2000 2000 – 01 2001 –02 2002 - 03

Thus the Indian home loan market is growing at an extreme pace

14
Section III

15
 Companies providing home loans

There are various banks available that provide home

loans are as follows:

ICICI

Introduction

ICICI Home Finance Company Limited was incorporated on May 28, 1999 as
100% subsidiary of ICICI Personal Financial Services Limited (ICICI PFS).
ICICI Home Finance Company Limited, was set up with the objective of
providing long term housing loans to individuals and corporate. The Company
was registered on March 30, 2000 with National Housing Bank (NHB) under
National Housing Bank Act, 1987 in terms of Housing Finance Companies
(NHB) Directions, 1989. With effect from May 3, 2002, ICICI Home Finance has
become a 100% subsidiary of ICICI Bank Limited.

Overview:

ICICI Home Loans are at present available to customers in 150 cities/towns

across the country. Loans are offered for purchase of new homes, purchase of
resale homes and home improvement. Besides, the company also offers loans for
commercial property and loans against existing property. The loans are offered
for tenors up to 30 years. The company has also introduced several customer

16
friendly services such as 'door-step' service, 'know your loan on phone' facility
and 'ICICI Home Search' - free property brokerage services.

The current ICICI Home Loan rates are as follows:

Adjustable rate Home Loans

Tenure New Rate (% per

(Yrs) annum)
1-5 10.50
Home Loans
6-20 11.00

Fixed rate Home Loans

Tenure New Rate (% per

(Yrs) annum)

1-5 11.00

6-10 11.50
Home Loans
10-20 11.50

21-30 12.00

17
 HDFC

Buying a property requires a complete knowledge of real estate and in today’s

complex financial market it is difficult to choose the appropriate home loan
company. HDFC Bank brings home loans at your doorstep. With over 25 years
of experience, a dedicated team of experts and a complete package to meet your
housing finance needs, ever eager to guide you with a basket of value added
products and services.

That’s why HDFC says, any one can offer you housing finance, but only the most
experienced can guide you completely.

18
 Citi Bank

The Citibank Home Loan. No hassles now. No surprises later. You'll find the
Citibank Home Loan hassle free all the way right from the application stage to
the time you pay your last installment

Interest Rate Chart (Floating Rates)

Salaried Self Employed

Tenure (Years) Interest Rate (p.a.) Interest Rate (p.a.)

Upto 5 7.25% 7.50%
10 7.25% 7.50%
15 7.25% 7.50%
20 7.25% -

19
 Eligibility Criteria
Salaried Self Employed
Min 25 yrs Min 25 yrs
Age Limit
Max 58 yrs Max 65 yrs
Min 2.1 Lakhs Min 2.1 lakhs
Loan Amount (Rs.)
Max 2 Cr. Max 2 Cr.

Net
Income p.a. (Rs.) Gross 1 Lakhs 85,000/-
Business
Income
Minimum Work
2 yrs 3 yrs
Experience

Other Charges
MoF Charges Yes
Admin Charges Nil
Pre-Payment Nil
Guarantor Nil
Processing Charge 0.50%

Other types of home loans by Citi Bank:

1. Citi home pre approval

2. Refinance
3. Buy out of loan
4. Buy out with enhancement
5. Top up
6. Property power
7. Cross sales (for Citibank cardholders only)

20
 IDBI

Buying a home of one's own is every individual's first stop in life. Which is
precisely why, IDBI bank have pulled out all the stops to sew together a home
loan product that has flexibility as its very foundation. They have created a
product that is competitively benchmarked, that is amply affordable and one
that is customer-sensitive. Only because when it comes to buying a house, the
first thing you need to do is to feel at home with your bank.

IDBI bank offers you only Floating rate home loans. Under the floating rate
option, interest rate varies from time to time, increase or decrease as applicable.

Interest Rate Chart (Floating Rates)

Salaried Self Employed
Tenure (Years) Interest Rate (p.a.) Interest Rate (p.a.)
Upto 5 7.50% 7.75%
10 7.50% 7.75%
15 7.50% 7.75%
20 7.50% -

21
Eligibility criteria

The bank will decide the loan amount based on your repayment capacity taking
into consideration factors such as your income,age,qualifications, number of
dependants, spouse's income, assets, liabilities, savings history, stability and
continuity of occupation etc. however, the maximum loan amount shall not
exceed 85 per cent of the cost of property which includes costs of property which
includes costs towards registration, stamp duties, amenities, utilities as
applicable.

Eligibility Criteria
Salaried Self Employed
Min 24 yrs Min 24 yrs
Age Limit
Max 58 yrs Max 65 yrs

2 Lakhs Min 2 Lakhs

Loan Amount (Rs.) Min
Max 3 Cr. Max 3 Cr.

Income p.a. (Rs.) 1.20 Lakhs Net Income 1.00 Lakh

Gross
Minimum Work
2 yrs 2 yrs
Experience

Other Charges
MOF Charges NIL
Admin Charges (upfront) NIL
Pre-Payment (floating) NIL
Guarantor NIL
Processing Charge 0.75%

22
Types of loan available:
1. Constructing a house
2. Buying a ready house
3. Refinance of existing home loans

23
 Standard Chartered

Standard chartered home loan offers you variety, flexibility and great savings.
And it’s hassle-free.

Flexible interest rates

You can choose between fixed and floating rates of interest. You can also shift
between the two options during the loan period

Interest Rate Chart (Floating Interest Rate Chart (Floating

Rates) Rates)
Salaried Self Employed

Interest Interest
Tenure (Years) Tenure (Years)
(p.a.) (p.a.)
5 7.50% 5 7.50%
10 7.50% 10 7.50%
15 7.50% 15 7.50%
20 7.50% 20 -
Other Charges
MOF Charges NIL
Admin Charges
NIL
(upfront)
Pre-Payment (floating) NIL
Guarantor NIL
Processing Charge 0.50-1%

24
Options to suit your need

Amount and Tenure

Only Loans for Homes offers you the options and flexibility to choose the loan
that's just right for you. Consider the 85% finance options for construction
renovation and extension. Or the largest loan amount of Rs 1 crore. And a loan
period of up to 15 years. A look at the table will tell you how much you can
benefit from Loans for Homes.

Loan Loan to Value Upper Limit of Max. Tenure of

(up to) Loan (Rs) Loan (Yrs)
85% 1 crores 20
Self - construction
Home renovation 85% 25 Lakhs 15
Home extension 85% 1 crores 15
Home Buying 85% 1 crores 20

Eligibility criteria

Eligibility Criteria

Salaried Self Employed

Min 23 yrs Min 23 yrs
Age Limit
Max 58 yrs Max 65 yrs

Loan Amount (Rs.) Min 6 Lakhs Min 6 Lakhs

Max No Limit Max No Limit

Income p.a. (Rs.) Gross 1.32 Lakhs Net Income 1 Lakhs

(p.a.)

3 yrs 3 yrs
Minimum Work Experience

25
Conditions

1. Finance up to maximum of 85% of the price of property or the cost of

construction is provided.
2. Applicant should be buying a house and must be residing with in the city
limits of areas where Standard Chartered operates.

Types of loans by standard chartered

Standard Chartered Grindlay’s offers the world’s most complete home loan for
Homes.

You can avail of a loan for any of the following purposes:

1) Buying a home under construction
2) Purchasing a constructed home
3) Constructing a home on a plot of land owned by you or your spouse
4) Extending your existing home
5) Renovating your existing home

Loan Repayment
Determining Repayment Capacity
Repayment capacity is assessed by considering age, income, assets, liabilities
and employment.

Repayment of Loan
Repayment of loan will be in Equated Monthly Installments (EMIs),
comprising principal and the interest. The (EMIs) will commence from the
month following full disbursement. The EMIs are payable every month and
the date of payment depend on the date of final disbursement. Postdated
cheque towards the EMIs will be collected at the time of disbursement.

26
 UTI

UTI also provides in a most comprehensive manner, which are as follow:

Interest Rate Chart (Floating Rates)

Salaried Self Employed
Tenure (Years) Interest Rates (p.a.) Interest Rates (p.a.)
Upto 5 7.50% 7.50%
10 7.50% 7.50%
15 7.50% 7.50%
20 7.50% 7.50%

Fees and charges

1. Processing fee up to 1% of the loan amount

2. No other expenses (e.g. legal charges, stamp duty) will be charged

27
Eligibility criteria

Eligibility Criteria
Salaried Self Employed
Min 24 yrs Min 24 yrs
Age Limit
Max 58 yrs Max 65 yrs
Loan Amount Min 1 Lakh Min 1 Lakhs
(Rs.) Max 50 Lakhs Max 50 Lakhs
Net
Income p.a. (Rs.) Gross 90,000 1.50 Lakhs
Income
Minimum Work
3 yrs 3 yrs
Experience

28
 Kotak Mahindra Bank
The interest rates and eligibility criteria for Kotak Mahindra home loan are as n
follows:

Interest Rate Chart (Floating Rates)

Salaried Self Employed
Tenure (Years) Interest Rate (p.a.) Interest Rate (p.a.)
3-5 7.50% 7.50%
10 7.50% 7.50%
15 7.50% 7.50%
20 7.50%

Eligibility criteria

Eligibility Criteria
Salaried Self Employed
Min 21 yrs Min 21 yrs
Age Limit
Max 58 yrs Max 65 yrs
Min 5 Lakhs Min 5 Lakhs
Loan Amount (Rs.)
Max 2 Cr. Max 2 Cr.
Income p.a. (Rs.) Gross 1.50 Lakh Net Income 1.50 Lakhs
Minimum Work
2 yrs 3 yrs
Experience

Other Charges
MOF Charges NIL
Admin Charges (upfront) NIL
Pre-Payment NIL
Guarantor NIL
Processing Charge 0.50-0.75%

29
 Comparison of home loans

INTEREST RATES PROC

AGE *
CATEGO TENUR ESSIN
BANK LIMI
RY E G
T FIXE FLOATIN
FEES
D G
25-58
Salaried 1-20 yrs 7.50% 7.25%
yrs
CITIBANK 0.50%

Self- 25-65
1-15 yrs 7.75% 7.50%
Employed yrs

23-58
Salaried 5-20 yrs 7.75% 7.50%
STANDAR yrs
D 0.50-
CHARTER 1.00%
ED BANK Self- 23-65
5-15 yrs 7.75% 7.50%
Employed yrs

24-58
Salaried yrs 1-20 yrs N.A 7.50%

IDBI BANK 0.75%

Self- 24-65
1-15 yrs N.A 7.75%
Employed yrs

24-58
Salaried 1-20 yrs 9.75% 7.50%
yrs
UTI BANK 1%
Self- 24-65
1-20 yrs 9.75% 7.50%
Employed yrs
21-58 0.50%
Salaried 3-20 yrs N.A 7.50%
KOTAK yrs
MAHINDR
A
BANK Self- 21-65
3-15 yrs N.A 7.50% 0.75%
Employed yrs

30
 Housing Loans Rates
With the RBI reducing the Bank rate, the housing sector of late witnessed the
loan rates nose-diving by 50 basis points. Also, ICICI has become the first player
in this sector to announce a housing loan for a 30-year period. While this will
increase the end cost of the house, it will facilitate people to plan their house over
a longer duration. With the rates moving southwards diving and the repayment
period going northside, it is now easy for you to buy that dream house you
thought of all along

Interest rate for public sector HFC’s

Rs1.5 Rs3.01
Less Rs10,001 Rs25,001 Rs50,001 Rs70,001 Rs2.01 Rs5.01 Rs8.01 Rs10.01
L L Rs. 15 L
SLABS than to to to to L to L to L to L to
to to & Above
Rs10,000 Rs25,000 Rs50,000 Rs70,000 Rs1.5 L Rs3 L Rs8 L Rs10 L Rs15 L
Rs2 L Rs5 L
PUBLIC SECTOR HFCs
BOB
Housing 12 12 12 12.75/13 12.75/13 12.75/13 12.75/13 12.75/13 12.75/13 12.75/13 13.25/13.5 13.25/13.5
Finance
Can Fin
13.25 13.25 13.25 13.25 13.25 13.25 13.25 13.25 13.25 13.25 13.25 13.25
Homes
Cent
Bank 12.25 12.25 12.25 12.25 12.25 12.25 13 13 13 13 14 14
Home
Corp
bank 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5
Homes
GIC
Housing 11.75 11.75 13.25 13.25 13.25 13.25 13.25 13.25 13.25 13.25 13.25 13.25
Finance^
HUDCO
11.5 11.5 11.5 12.75 12.75 12.75 13 13 13 13 13 13
Niwas^
Ind
Bank 12 12 12 13.5 13.5 13.5 13.5 13.5 14 14 15 15
Housing
LIC
Housing 12 12 13 13 13 13 13 13 13 13 13 13
Finance$
PNB
Housing - - - 13 13 13 13 13 13 13 13 13.5
Finance
SBI
Home 13 13 13 13 13 13 13 13 13 13 13 13.25
Finance+
Vibank
Housing 12.25 12.25 12.25 13 13 13 13 13 13 13 13.5 14
Fin

31
HUDCO, GIC Housing Finance charges interest on a monthly rest basis

$ LIC Housing Finance's rates are for tenure upto 15 years. It charges 14 per
cent interest for terms between 16 and 20 years.

+ For amounts between Rs 5.01 lakh and Rs 10 lakh, SBI Home charges 15 per
cent for up to five years, 15.5 per cent for upto 10 years and 16.5 per cent for
above 10 years. For loans above Rs 10 lakh, it charges 15 per cent for up to 5
years, 15.5 per cent for up to 10 years, and 16.5 per cent for over ten years

# HDFC will charge a fixed rate of 13.25 % on all loan slabs and 12.75 %
floating rate for all slabs too

@ For HSBC, first figure for tenure 1-7 yrs, second for tenure 8-15 yrs. Floating
rate at PLR where PLR for 1-7 yrs: 15.5% and for 8-15 yrs:14.2%

* Includes Interest Tax.

Source – Indiainfoline survey

32
Section IV

33
 Loan process

Invest in a Home...Don’t just buy it!

Many of us buy a Home to put a shelter over our heads…but only a few realize
that real estate is an excellent way to save for the future.

Most of us save money for the future through depositing money in a Bank or
Company Fixed Deposit while others invest in gold. Several others invest in a
home / real estate while a few adventurous types (really very few!) invest in a
business or buy shares of companies

Historical evidence has shown that over a long period of time (25- 30 years) the
cumulative wealth of those who invested in real estate and those who invested in
a good business (or bought shares of good businesses), multiplied several fold
compared to the rest. Just look at the Raheja’s, Hiranandani’s, Birla’s, Tata’s
and the Ambani’s for validation. Both real estate and business investments gave
returns to the investor that were much higher than the rate of increase in prices
of goods and therefore multiplied wealth.

You have often heard people say, "A Rupee today can buy goods worth only Ten
Paise 20 years ago". In India, studies over the last 20 years show that returns
given by investments in Fixed deposits and gold are so low that we can buy less
goods with this wealth today than we could have with the original investment
In India, historical evidence also shows that both real estate and shares have
given compounded return of over 20% p.a. over a 15-20 year holding period.
Fixed Deposits and investments in gold have given returns of 5-8% p.a over the
last 20 years while prices of goods have risen at over 10% p.a in the same period

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If you carefully choose the location of your property, you can be a multi -
millionaire when you retire at 65! Remember that land is a limited commodity
(there is only so much of it that you can buy!). If you happen to buy land in a fast
growing location, you can be sure that the price of this land will be bid up over
time. Land in Bombay has appreciated in value far in excess of that in Pune
instead of land in Patna, you would have had at least 5 Mercedes Benz cars
parked around your palace today. There are several instances of people who
start Investing in a Home with a small investment of Rs.3-5 lacs. Having chosen
the home wisely, they are in a position to sell the home after a few years at over
Rs. 15 lacs and then buy a new home at another strategic location. This
"trading" continues to compound wealth at an ever increasing rate.

Example

Assume that you are 30 years old today and you have invested Rs. 5 lakhs in a
home. If real estate prices move up in line with the long term average rate of
about 20% p.a compounded, then at the age of 60 you will have Rs. 12 crores.
However, prices of goods will also move up in this period (say at the rate of 10%
p.a). You would still have added to your NET Wealth as you can now buy an
equivalent of Rs. 68 lakhs worth of goods (at the higher prices) with the money.

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 Why take a loan to invest in a Home?

Besides the obvious answer that goes “because I cannot afford to buy a shelter
over my head outright", there are several other reasons why a Home Loan makes
sense from a long term Savings perspective.

Your grandfather may have told you “Son, don’t take any loans, they are only
trouble" but this is no longer true in the New World. You may have also heard
the saying that "Wealth begets Wealth". However, great many of us cannot put
up that initial capital to kick-start the wealth creation process.

Assume that you have identified a Gemstone that can be bought for about Rs. 2
lacs today but would be worth Rs. 31 lacs in 15 years (a compounded return of
20% over the 15 year period). You would have grabbed the offer but for the fact
that you have a bank balance of just Rs. 50,000. A friend comes along and offers
to loan you Rs. 1.5 lacs but at an interest of 10%. You will immediately buy the
Gemstone as you calculate that the return from the investment in the Gemstone
is far higher than the interest cost that you have to pay your friend.

We put the same principle to work for you while taking a housing loan. Just
substitute "Home" instead of "Gemstone" and " Housing Finance Company" in
place of "Friend” in the previous example and you will see why. The long term
average return in investing in a home is about 20% p.a. while the average cost of
borrowing funds in the market today is about 10% p.a. (after considering all tax
breaks). As long as the cost of financing the home is less than about 20% it
makes sense to borrow and buy. There is one key difference however………you
can live in the Home as well!

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 Choosing a Loan

There are several features of a Home loan that you must consider based on an
analysis of your specific needs.

How much can you afford?

As the investment in a home does not yield any monthly income, (unless you have
rented out the home) your ability to repay the loan depends entirely on your
salary or regular income from a stable business. Finance companies would
normally give you a loan to the extent that your monthly repayments are less
than 35-50% of your gross monthly salary. AbodesIndia.com gives you the
ability to find the Maximum loan that you can afford among the companies in
the database.

How much must you leverage?

Having found a Rs. 10 lac property that you want to buy, you must decide how
much of the cost can be funded by a loan.

Normally Housing Finance Companies will loan you about 80-85% of the
property value. You need to make a minimum down payment of 15-20% of the
property value. Please also remember that you have to normally bear the
following fixed costs before your loan is disbursed:

1. Processing and administrative fee (1.5-2% both included)

2. Legal fees
3. Stamp duty charges (for resold property)
4. Property insurance premium
5. Accident insurance premium

Make sure that you have an asset base that is easily converted to cash (e.g. cash
in a Bank FD etc.) to cover all charges including down payment.

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As the value of the loan amount increases, the interest rate charged usually also
increases. You may feel tempted to take a smaller loan by funding the large
down payment (the difference between the value of the property and the loan
you have applied for), by withdrawals from other investments. If your
investments are in Fixed Deposits that are giving you about 11% p.a (about 7.4%
p.a. after tax) and the effective post tax cost of you Home Loan is 10% (about
15% before tax) then this is a good idea. However, if you expect to make over
20% p.a. (about 13.5% post tax) by investing in shares or in a business, then you
must borrow as much as you can on the Home Loan and not withdraw money
from your other investments.

Another important consideration is your tax bracket and the extent of using
available tax breaks. The tax breaks are directly related to the level of interest
and principal repayments made each year, with an over all upper limit. You may
not qualify for the full tax break if your loan is relatively small. Also remember
that the government is keen to give more concessions to the housing sector and
the overall cap on tax breaks will go up in the future. It is prudent to lock into a
large loan today rather than a smaller one.

If you have identified other profitable avenues of savings that are expected to
give you 15-20% returns p.a, you can use the Home Loan as a way of getting a
cheap loan. In this case borrow up to the limit of 80-85% of the property value
rather than withdraw cash from the other savings to make the down payment on
the loan.

What is the tenure of the loan?

Loans are usually for a maximum period of 15 years (which may go upto 20
years in some cases). Longer tenure loans have smaller monthly installments.
You can still get a large loan on a relatively small monthly salary by choosing to
take a longer period loan. However, longer period loans maybe more expensive
(higher rate of interest) even though the monthly installment payment is lower.
Convenience always comes at a cost!

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Statistical evidence also shows that most people take a longer tenure loan of 10-
15 years but end up prepaying the same in 5-6 years. This happens because
salaries invariably improve with time. There are two costs that could have been
avoided through better planning. The first is the Prepayment penalty of 1-2 %
and the second is the higher interest rates quoted on longer tenure loan
(especially over 20 years). In this example, both costs could have been avoided by
taking just a 5-6 year loan. Further, if you intend to sell the home after about 5-
10 years, take a 5-10 year loan only. There is no point paying a higher interest
rate for a longer tenure loan of 15-20 years, if you intend to PREPAY the loan in
5-10 years.

How will interest rates move?

Till recently you did not have to make this decision as all loans were given on a
FIXED RATE basis. This means that the interest rate is fixed for the full tenure
of the loan and so is your monthly repayment amount. Life was simple. You
could easily plan for the future as your cash flows each monthly after the loan
repayments were very predictable.

However, interest rates in the economy, changes depending on the demand and
supply of money. When industry is booming and everyone needs money to do
business, interest rates move up and vice –versa. Home loan customers became
unhappy about having to pay a very high interest rate that they were locked into,
when rates subsequently fell.

For the customer’s convenience, FLOATING RATE loans were recently

introduced. The interest rate on these loans changed every time the interest rate
in the financial system changed. The monthly installment falls if interest rate in
the economy falls (HSBC home loan product). With other companies the
monthly installment amount was kept fixed but the tenure of the loan reduces if
interest rates in the economy falls (e.g. HDFC floating rate loans). Normally,
floating interest rates are quoted in the form of "PLR plus premium". The PLR
(Prime Lending Rate) varies from company to company and changes as
frequently as once in 3 months.

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Example

A floating rate quote of PLR+0.5% means that interest rate on the loan will change
from 14.5% to 15.5% if PLR goes up from 14% to 15%. Also a PLR +0.5% quote
from one bank is very different from a PLR +0.5% quote from another as the PLR
levels for each may differ.

In a floating rate loan, the customer gains if interest rates fall, but will take a
severe beating if interest rates rise. In order to reduce this disadvantage of the
floating rate loan some progressive banks like HSBC have introduced a
HYBRID LOAN. In this case a person can decide to fix the interest rate on his
loan for periods of 1, 2 or 3 years on a long tenure loan and subsequently decide
to float his loan.

Example

You can take a 15 year loan specifying that you will have a fixed interest rate for
the first 3 years, after which you have the option to convert to a floating rate loan.
If you think that interest rates are about to fall them you will opt for a floating rate
loan after 3 years. If interest rates were to rise during the 3-year period you are
fully protected as you had locked in a rate for 3 years.

You will want to stay on with a Floating rate loan as long as you feel that interest
rates are expected to fall further. The moment you expect interest rates to start
rising, switch immediately to a fixed rate loan. As these changes never happen
overnight, you will have enough time to make the move provided you watch
interest rates carefully.

This additional flexibility can be capitalized to substantially lower the cost of the
loan, often saving as much as 50% of the total interest you may have paid on a
simple Fixed rate loan. But…there is a cost the trouble of tracking interest rates
and taking a forward looking view on interest rates.

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Are there any prepayment penalties?
Each monthly installment consists of a portion that goes towards repaying the
original loan principal and the balance going towards interest on the outstanding
loan. If you pay anything over the amount that would go towards principal
repayment, the excess amount is construed to be a loan prepayment. Most
Housing Finance companies charge a fee of 1-2% on the amount being prepaid.
This can be a big disadvantage in several cases.

1. Your earning capacity will normally increase with age and a prepayment
fee deters you from completely retiring your debt before time.
2. Your ability to refinance the loan if interest rates subsequently fall gets
constrained
3. You may want to sell the home during the tenure of the loan and you find
prepayment costs are an unnecessary burden.

If you may need to do any of the above, choose a loan with no prepayment fees.

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The Total Effective Interest Rate (TEIR) versus the
EMI comparisons
It is very important for you to understand the total cost of the loan and try to
minimize this cost to the extent possible. As home loans are of a long duration
even a 0.5% difference in interest rates can cost you a lot of money over time.

Example

If you had taken a taken a 15 year loan of Rs. 5 lacs at 15% p.a you would have
paid Rs. 31000 less than a 15 year loan of Rs 5 lacs for 15.5%.

Most of us compare the cost of the loan by comparing the EMI’s (Equated
Monthly Installments). This can be misleading as you are ignoring the "time value
of money" which means that you need to look at when the EMI is being paid.
This is because the value of One Rupee today is vastly different from the value of
a Rupee 10 years ago. Using a Discounted Cash flow Model that calculates the
Effective interest cost depending on when the EMI amounts are being paid solves
this problem.

Thus these are the most important factors to be considered while planning for a
home loan.

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 Choosing a Housing Finance Company
Remember that you are entering into a long-term relationship with the lender
when you take a home loan. Choose a flexible home loan product that gives you
the leeway to switch between fixed and floating rates at no additional cost.

For short-term loans (less than 5 years) and for small loan amounts (less than Rs.
5 lacs); the Total Effective interest rates can vary widely between Finance
Companies. However, for the more common, long tenure loans the interest rate
differences between companies are small. In that case, Companies that have
lower documentation requirements and those who are able to better customize
the loan must be approached. Responsiveness to queries and the average speed in
processing loan applications are the criteria used to judge service standards.

Home Loan Companies quotes interest rates based Daily/Annual/Monthly rest.

This can be confusing for customers. Abodes India.com simplifies this by
calculating all quoted interest rates on a common basis. For comparison
purposes all interest rates quotes are converted into an effective Monthly Rest
basis. That quote on a (M.R) Monthly Rest basis normally provides the lowest
cost loans

A member of hidden costs needs to be explored. Most Companies doesn’t pay for
the technical valuation report of the property other insists on a registered
Mortgage that will increase costs of taking the loan.

But one of the most expensive hidden costs takes the form of a prepayment
penalty. Avoid Housing Companies that charge these penalties if you hope to
retire the loan before are full period (or sell the home). Though people take a 10-
15 year loan, improving cash inflows (from a bonus or job promotion) invariably
results in prepayment of the loan in 5-7 years.

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 Steps involved in getting a home loan

1. Submit an Application form along with relevant documents

The finance company will process your application to check your loan
eligibility based on your income and personal profile. Usually an up front
(non –refundable fee) of about 0.5-1% of the loan amount must be paid
before processing begins.

2. Verification of the property and supporting documents

A company representative may visit the property as well as your

residence to vary information submitted in your application form.
Further, a property valuation maybe carried out by the company to
determine the maximum amount they are willing to lend you. Any
references submitted by you in the Application Form may also be
contacted. You may be personally interviewed and any further
clarifications in the documents submitted maybe sought.

3. Sanction of the loan

A sanction letter is issued which you will have to sign. This letter will
contain the amount and the terms of the loan. Some companies specify the
period for which the loan sanction is valid. You will have to pay a
Commitment fee (normally 1% of the unutilized loan amount) if you do
not draw on the ENTIRE sanctioned amount before that period.

4. Submission of the original Property documents and signing the

loan Agreement

You will be required to leave the title deed of the property with the
company as a security for the loan. You will be required to go to the
company’s office to execute the legal loan papers.

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5. Disbursal of the Loan Cheque

You can draw the loan in parts depending on the stage of construction of
the building. Until such time that the entire sanctioned amount is NOT
drawn, you will pay a simple interest on the Actual Amount drawn
(without any principal repayments). The EMI payments will commence
only after the entire Sanctioned Loan Amount is drawn

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 When to refinance a Loan.
Refinancing means repaying an existing home loan before its tenure with the
money from a new loan taken under new terms and conditions. The following
circumstances may trigger refinancing:

1. Interest rates in the economy have fallen and it makes sense to retire the old
high cost fixed rate loan with a new fixed rate loan at the lower rate. You can
do this provided rates have fallen enough to cover your prepayment penalty
and the up front costs of initiating a new loan (like processing fee,
administrative fee etc.).
2. If you plan to sell the home during the tenure of the original loan you will
need to terminate the loan borrowing the remaining principal amount against
the home equity or from the potential buyer.
3. Switch from a Fixed rate loan to a more flexible Floating rate / Hybrid
product You may want to switch from a Floating rate loan to a fixed rate
loan if interest rates start to move up.
4. You can lower your monthly installment payments by extending the tenure of
the new loan. In order to improve your monthly cash flows you can prepay
an existing loan with 5 years to go by taking a new 15-year loan for the
remaining principal amount.

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 Impact of budget 2005 on home loan
That the sweeping tax reforms proposals in Budget 2005 will leave most
taxpayers better off is by now universally known. But one trickle-down beneficial
effect of these proposals for homebuyers has gone largely unnoticed. As a
consequence of the proposed changes, home loans have overnight become much
more tax-efficient. Significantly, it’s not only those who now propose to take a
home loan who will benefit even those who are years into the repayment will
stand to gain. A look at how these proposals impact the tax efficiency of your
home loan–and strategies to make them even better.

The roots of these changes can be traced to two significant Budget

2005 proposals:

1. Home loan interest payments up to Rs 1.5 lakh per person per year will
continue to qualify for a deduction under Section 24

2. Investments up to Rs 1 lakh in qualifying instruments will qualify for a

deduction under Section 80C. The qualifying instruments are the same as
those that until now qualified for a rebate under Section88, except that
the sub-limits that existed earlier will no longer apply. The one that is of
relevance to homebuyers is the repayment of principal; up to Rs 20,000
qualified for the Section 88 rebate, but now that the limits have been
removed, principal repayments up to the entire Rs 1 lakh will qualify for
the Section 80C deduction. And, significantly, even those with taxable
incomes over Rs 5 lakh can claim the deduction.

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To understand just how beneficial these proposals are, let’s assume that we are
planning to take a Rs 35 lakh home loan for 15 years at 7.5 per cent, the
prevailing rate on a floating loan. Our EMI will work out to about Rs 32,450.
Since we are paying interest only on the amount outstanding at the end of each
month, the principal and interest components of our EMI vary each month. In
the above case, till the 69th month, the interest component will account for a
higher proportion of your EMI. Over the tenure of the loan, the share of the
interest payment comes down, and the principal repayment accounts for a higher
percentage of your EMI

Indicatively, in the first year we will pay about Rs 2.58 lakh as interest, and
about Rs 1.31 lakh as principal repayment. Then Under the earlier tax regime,
our interest payments up to Rs 1.5 lakh a year would have qualified for the
deduction under Section 24. But of the Rs 1.31 lakh we have repaid towards the
principal, only Rs 20,000 would have qualified for the Section 88 rebate

In other words, since interest payments do not typically exceed the Rs 1.5 lakh
limit beyond Year 10 or so, the juiciest tax breaks on our home loan have by then
been had. From then on, the breaks progressively get thinner.

Now. As a consequence of the budget proposals, we will still be able to claim a

deduction of only up to Rs 1.5 lakh on the interest payment under Section 24.
But now up to Rs 1 lakh of our principal repayment qualifies for a deduction
under Section 80C. In the 30 per cent tax slab, that straightaway translates into a
tax saving of Rs 30,000 in the first year.

We will make that additional tax saving not only in the first year of your loan,
but during the entire tenure. Consider this:
In Year 2, your interest payment adds up to about Rs 2.48lakh, and principal
repayments to about Rs 1.41 lakh. The qualifying amount for tax breaks: Rs 1.5
lakh on the interest and Rs 1 lakh on the principal. The net additional tax saving:
Rs 30,000.

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Likewise, in the above case, we can maximize our tax savings (Rs 1.5 lakh on
interest payments; Rs 1 lakh on principal repayments) upto Year 9. Beyond that
stage, our interest payouts during each year dip below Rs 1.5lakh. But
significantly, the principal repayments (which add up to Rs 2.39 lakh in Year 9)
will continue to qualify for the Section 80C deduction up to the Rs 1 lakh limit.
The same is the case right up to Year 15, when our loan is fully repaid. Existing
borrowers too gain. What this means is that it’s not just those who will now take
a home loan who gain. Even if we had taken a home loan some years ago, and are
in, say, the sixth year of repayment, we will stand to make the additional tax
saving to the extent of Rs 30,000 every year That’s a saving of Rs 2,500 a month.
In other words, our EMI is effectively lower to that extent.

All these calculations, of course, make one critical assumption: that the Budget
2005 proposals for tax breaks on home loans will continue going forward.
There’s no certainty of that–but it can be said with near-certainty that of all the
tax breaks that are targeted for withdrawal, those on home loans will be the last
to go.

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Section V

50
 Survey analysis

Survey objective
Basic objective of the survey was to survey assess the performance ICICI and
HDFC banks in the home loan sector.

Survey methodology
Survey was conducted among 80 correspondents, both male and female, who are
customers of the either of these banks and have taken loans from these banks 1
or more than a - year back.

Survey results are explained with the help of graphs and diagrams.

Note: the respondents were the customers of either ICICI or HDFC

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1. From which bank have you taken loan?

™ ICICI
™ HDFC

The results are as follows:

.
62 %

38 %
HDFC

ICICI

62 % of the respondent who were interviewed had taken loan from

HDFC bank where as the 38 % of the respondent has taken loan
from ICICI. These shows that loan taken from HDFC is
comparatively higher than ICICI.

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2. Which loan have you taken?

™ Home loan
™ Vehicle loan
™ Mortgage loan

™ Others

Home loan

Vehicle loan
74 %

Mortgage loan

Others

18 %

6%
2%

Our figures reveals that the necessity of the Makan is still on the top
of the chart while vehicle loans and mortgage loans follows them.

Thus it shows that home loans still ruling the market with intensive
competition.

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3. From where you get informed about home loan?

™ Newspaper Newspaper

™ Agent
Agent
™ Bank
™ Magazine Bank

Magazine

56 %

32 %

10 %
2%

It is correctly said, that advertisement plays a crucial role in selling

the products and the banks are also understanding it, thus 56 % of
our respondents said that they got informed about home loan
through newspapers whereas 32 % of our respondents said that they
got informed through their Agents so it can be said that word of
mouth also plays a huge role. Thus 10 % of the people have learnt
from bank and 2 % of people have learnt from magazine.

Note: These figures are exclusively for ICICI and HDFC

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4. What is the tenure for your payment?

™ 2 – 5 years 15 – 20 years
™ 5 – 10 years
10 – 15 years
™ 10 – 15 years
™ 15 – 20 years 5 – 10 years

2 – 5 years
71 %

18 %

6%
5%

Our figure reveals that 71 % of the respondents have taken loan for
15 to 20 years where as 18 % of our respondents have taken loan for
10 to 15 years whereas 6 % of our respondents have taken loan for 5
to 10 years. Whereas 5 % of our respondents have taken loan for 2 to
5 years.

From this it concluded that most of ICICI as well as HDFC

correspondents have option for long-term loans.

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5. Did you submit all the documents you submitted?

100 %

Yes

100 % of our respondents said that they have submitted all the
documents.

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6. Are you satisfied with the loan you purchased?

98 %

Yes
2%

No

98 % of our respondent said that they were satisfied with the loan
whereas 2 % of our respondent said that they were not because they
have to stick to the rules of the company and have to pay installments
on time and if the installments not paid in time they have to suffer
from penalty charges.

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7. Will you refinance your loan?

86 %

Yes

14 % No

86 % of our respondents said that they will refinance their loan

whereas 14 % of our respondent said that they will not refinance it.
This reveals that both ICICI as well as HDFC is more likely to have
major market share of home loans.

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8. Will you refinance your loan?

86 %

Yes

14 % No

86 % of our respondents said that they will refinance their loan whereas 14 % of
our respondent said that they will not refinance it. They this reveals that both
ICICI as well as HDFC is more likely to have major market share of home loans.

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Conclusion of the survey:

Thus from the survey we can conclude that both of the companies
have performed well and also have bright future in the loan market.
The competition is definitely going to rise with increasing market
share as well as new players coming in but, proper strategy applied
at the time will help the company to prosper whereas on the other
hand they have to retain their old customer as well, which will bring
goodwill and reputation for them

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 Conclusion

This industry is witnessing a boom at present boosted by generous budget sops

and rock bottle real estate prices.The demand is a result of genuine individual
needs for housing. Thus, the housing finance industry is on good ground and has
interesting prospects ahead.

Home loans are operative over longer time periods like 15-20 years and taking a
call on interest rates over such tenures would be a difficult proposition. However
what loan seekers must do is, make choices in tune with their risk appetites and
profiles. If an unwavering liability is what suits your profile, then fixed rate
home loans should be the natural choice. On the other hand, if you can handle
risks and are willing to go the extra mile to benefit from any further fall in
interest rates, floating rate home loans will be best suited for you. Either ways
ensure that you have understood the implication of `fixed/floating rates' as
defined by HFCs, since this has undergone some change in 2004.

Another important area going forward will be the need to make informed
choices. Loan seekers can no longer afford to be oblivious to the necessity in their
home loan agreements. Various clauses in the agreement can have a significant
bearing on your liabilities; ensure that you have a thorough understanding of
what the agreement entails and that there are no unpleasant surprises.

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 Bibliography

Books
1. Finance & investment - John Downes
2. Close to home -vandana shiva
3. Home loans -Times publication

Reports
1. National housing finance report
2. Report on home loans by GOI

News Papers
1. Times of India
2. Economics times
3. Free press journal
4. Business standard

Internet
1. www.thinkglink.com/
article.asp?Title=When_To_Refinance.htm&ID=723
2. www.hdfc.com
3. my.countrywide.com/
4. www.homeloans.va.gov
5. hsbc.co.in/in/personal/loans/homeloan2.htm
6. www.apnaloan.com/
7. www.indiainfoline.com/pefi/apply/hlon/ibnk/
8. www.icicibank.com/pfsuser/ loans/homeloans/hlhomepage

Places visited
1. Indian Merchant Chambers (churchgate)

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