Is financing the only reason why home buyers take loans?

Banks and housing finance companies have a fiduciary responsibility towards home buyers who put their trust on them

To make the purchase easier Banks and HFC’s lend out money to homebuyers against a mortgage. Home buyers take loans from Banks & HFC’s mainly for paying up for the purchase of property. It is a fact that the soaring prices in the real estate market make it difficult for homebuyers to make payments solely off of their savings and salaries specially with tight payment schedules by the developers.

There are also several instances where a homebuyer may be capable of meeting each and every demand personally and not require a loan but still prefers to mortgage his/her property. There are many reasons why a homebuyer may do this, like:

· Proejcts are approved by Banks & HFC’s

· To make sure availability of funds when required

· To avoid any delay in payments which may entail a penalty

· To keep a reservoir of moving funds or for emergency purposes

· Due diligence of property by bank

· To avail tax benefits, etc.

If the loans are managed properly by a borrower they can help gain funds rather than being a liability.

Written By

Rakshit Patni

Student 4th Year BBA LLB

Amity Law School

Gautam Bugh Nagar Noida Uttar Pradesh

Under Guidance Of:

Mr. Manish Kumar Patni

Bsc LLB

Advocate Delhi Bar Council

Legal Consultant & Strategist