Modify and expand mart
MANOJ K RAKSHIT
Ex-General Manager,
National Housing Bank
Although interest rate remains the main criterion for designing home loans, there can be further modifications that can be built in so as to attract a greater audience.
One such is the individual who has just started his career and may choose the own tenure and equated monthly instalments (EMI) based on his projected career growth plan.
Such clients may be selective about location of their apartment/house and its size.
It may be difficult for them to get a loan of the desired amount with their present affordable EMI level and tenure under existing vanilla mortgage schemes being offered by housing finance companies and banks.
One of the ways will be to manoeuvre the mortgage period and thus offer innovative alternate housing loan schemes.
Graduated payment mortgages (GMP) is a conventional mortgage with graduated payment period where the initial payment starts at a relatively lower level than the normal loan schemes and then rises gradually after a certain number of years during the graduation period until after certain period they are sufficient to amortise the loan over the remaining tenure.
The borrower
