The Benefits of Mortgage Guarantee for the Lending Companies and BorrowersPosted by Imgc India on June 14th, 2017 When lending companies provide home loans, they conduct extensive checks to understand the repayment capacity of the borrower. However, even after such thorough analysis, there are times when the borrowers may fail to repay the home loan, which is when the company is left with no choice but to bear the loss. This is where Mortgage Guarantee comes into play to mitigate such risks for the lending companies, and also increase a borrower’s borrowing limit for a home loan. For the Lending Companies
For the Borrowers From a borrower’s perspective, this insurance of mortgage guarantee backed home loans is not just about better loan terms like higher loan amount, lower EMIs and longer repayment tenure; it is also about encouraging early home ownership. Also, after the introduction of the PMAY, those belonging to LIG and EWS categories respectively are now eligible to get home loans. Now while this scheme is very beneficial, the lending companies are still prone to incurring huge losses because borrowers from this category often fail to repay the loans on time due to their unstable income sources. With the insurance of mortgage guarantee backed home loans, lending companies have been greatly relieved of this burden. Like it? Share it!More by this author |