Susan Lynn "Suze" Orman is an American author, financial adviser, motivational speaker, and television host for finance related programs. And she has picked the exact essence that why people buy home & why home finance is the dearest to banks amongst all segments of financing!
Though I am not a bit of a finance person & sure I am not the only one who don’t understands it, rather millions in these country who slogs for hours under the name of various jobs, touch the finance word only for two things; one is while buying a vehicle & another is while buying their home! In recent economic slump, well I don’t actually know what it means but that’s what all the media is screaming so used the phrase. Two news made headlines about finance last week, one was about automobile finance & another was about guide line by Reserve Bank for home finance! Automobile isn’t our topic so let’s skip that but home finance is something we can’t ignore, though auto finance is also in a way impact on planning of homes or projects but that’s different subject , so we will talk about it sometime next!
Before discussing about the latest guidelines or norms whatever you call for home finance, let’s understand the scene in real estate on that front from a commoner's eye. Not very long back i.e. in late 80's to early 90', when home finance players were very few i.e. just names like HDFC, LIC housing finance or Diwan Housing were few of the names. Nationalize Banks were not much keen about this segment. Finance to the builders was a taboo then also, just like it is today! The amount of finance given for flat buying was also as meager as 60%-70% of the home price. To get the loan proposal sanctioned was difficult than climbing Mount Everest & disbursement was returning back safely from Mount Everest! The entire procedure used to take months even year sometimes. The criteria’s were extremely stringent about eligibility for the loans & mostly either Govt servants or Large Corporate Co's employees only were able to fulfill the criteria’s, restricting the customer base of real estate to a small segment.
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