Mortgage

Presented By:
Navaneeth M
4NM09MBA44
 Housing in India

 A basic human necessity supporting economic activities

 Second largest employment generator, next to agriculturist
 Has forward and backward linkages with over 250 ancillary
industries
 Every rupees spent on construction, an estimated 75 - 80
paise is added to GDP
 Mortgage Industry is growing 20-30% y-o-y basis
 Contribution of housing in GDP is about 6%
 Percentage of outstanding housing loan to GDP is
12%(China), 22%(Malaysia), 40%(Hong-Kong) and 65%(USA)
Introduction
 What is Housing Finance?

- Construction of a House / Flat

- Purchase of land / ready house / Flat

- Extension of existing house / Flat

- Repairs, renovation of a house / Flat

- Schools, Hospitals

- Co-operative Housing Society

- Construction of Workers / Employees Quarters

Why Housing Loan ?

 A real saving for any class individual

 An asset always likely to appreciate

 Compare with several other savings

 Easy to acquire, repay and transfer

 A good tax savings facility

 A decent line of business in modern days

Definition of Mortgage

A loan to finance the purchase of real estate usually

with specified payment periods and interest rates. The
borrower gives the lender a lien on the property as
collateral for the loan.
Who can be the Applicant ?

 An Individual ?

- Salaries / Self-employed / Businessman / Professional /

Agriculturist / Artist etc..

 A firm/ Company / Trust / hospital etc…

 A Co-operative Society

 Industrial Estate / Builder-Contractor

 Senior Citizen
Mortgage-financing companies
• LIC Housing Finance
• HDFC
• ICICI Home Finance
• SBI Housing Finance
• UCO Bank
• State Bank of India
• State Bank of Mysore
• Allahabad Bank
• United Bank of India
• United Commercial Bank of India
• Bank of Baroda
• Kotak Mahindra Bank
• Citi Bank
• HSBC
• Standard Chartered Bank
Market Share
Types of Mortgage
1. Simple Mortgage

2. Mortgage by Conditional Sale

3. Usufructuary Mortgage

4. English Mortgage

5. Reverse Mortgage

6. Anomalous mortgage
What formalities ?
 Application
 Enclosures :
- Estimate / Land papers / Plans / Designs approved by
the Municipal or Town planning Dept.
- Salary certification / IT-ST-Wealth tax Assessment
- Duplicate papers
- Agricultural / Urban land
- Proof of residence
- Builders credentials
Environment Factors
 SWOT ANALYSIS
Strengths

 An active mainstream sector

 Effective regulatory framework
 Extensive network of regional banks, microfinance institutions,
co-operatives and rural banks
Weakness

 Interest rate war persistent

 Lack of uniformity of norms
 Increase in default rates
Opportunities

 Increasing urbanization
 Housing microfinance has potentials
Tax rebates on house loans
Falling interest rates
 Lower SLR and CRR will enhance liquidity, so more loans can be offered

Threats
Lower transactions levels in reality sector
High switching costs of customers
Challenges

 Need of rapid spread of the business in rural

area

 Minimizing the formalities involved in the

procedure

 Microfinance for housing which reaches to poor

people