Housing finance companies (HFCs) grew their mortgage portfolios at a faster rate than banks  in the year up to March 31, thereby increasing their market share to 31 per cent, according to a study by Icra.

According to its estimates, the total housing credit outstanding in India as on March 31 was Rs 4,31,300 crore, as on March 31,2009, growth of 13 per cent.

The housing loan portfolios of HFCs as a whole reported a growth of 31 per cent during 2009-10, higher than the 10 per cent growth reported by commercial banks. With that, the share of HFCs in the mortgage market increased to 31 per cent as on March 31, from 29 per cent as on March 31, 2009.

Vibha Batra, Senior Vice President and Co-Head, Financial, Sector Ratings, said, “HFCs continue to maintain superior asset quality vis-à-vis public sector banks (PSBs). The top five PSBs had a gross non-performing (NPA) percentage of 2.6 per cent in their housing finance book a on March 31, against which HFCs had 0.9  per cent. Credit provisions were low for HFCs at 0.07 per cent of average advances during 2009-10.”

HDFC, State Bank of India (SBI), ICICI Bank and LIC Housing Finance (LIC HFL) dominate the domestic mortgage, together accounting for 55 per cent of the total housing credit in India as of March 31, the report said.

Credit growth in the Indian mortgage finance market improved to 13 per cent in 2009-10 from 10 per cent in the previous financial year. This was party on the strength of an improved operating environment and expectations of appreciation in property prices and partly on account of the attractive interest rate schemes offered by both banks and HFCs. The “8 per cent home loan scheme” that was initially launched by State Bank of India in August 2009 to benefit home buyers during the festive season forced other lenders to launch similar products. While most withdrew the scheme by March some large players have extended it to June.

Courtesy by BS    dtd:  June 17, 2010

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Banks and Financial institutions have come up in a big way to help people buy houses or own property. They guarantee people to fulfill their promises and provide low interest rates and flexibility to pay off the interests. Even a first time aspirant who wants to own a property is guided by various programmes of the finance companies. Government too has various offers to help people buy properties.

In several countries, the local government and municipality take the responsibility to help out people who are first-time purchasers. Such bodies sometimes also offer incentives to the aspirant of housing finance. The incentives may be in the form of grants-free money and down payment backing. Some governments also provide reduced interest rates to the first time buyers that is in conjunction with other finance companies. Then there are also finance companies that present comfortable lending standards and low housing loan interest rate.

Most of the housing companies nowadays hold seminars, to aquaint people of the pros and cons of home ownerships. One should really attend to such seminars as this provides an opportunity to remain aware about the nitty-gritty of buying a property. There are people who faced dire situations as they were unaware about the rules and regulations of owning a house. So, attending to the seminars organised by the finance companies helps people know the criteria of the buyers especially for those who are first timers. One can also check with their country’s housing division where one can find the full details about the guidelines that qualify one to own a property.

To avail the best housing loan interest rate one can order for a ‘tri-merge’ details of credit. The tri-merge makes it necessary for one to submit a single statement regarding information about one’s three main credit reporting bureau. These bureaus are Trans unions, Equifax and experience. The details of the tri-merge also ensure that one encloses the acknowledgment scores from all the three bureaus. This really helps one to buy houses. Moreover, when it comes to finance lending by financial organisations, it is one’s credit score that determines almost everything. From the credit scores, the user knows how much amount to borrow, what certification is to be presented to the lender, what would be the notice rate and how much money has to be reimbursed upfront.

It is absolutely necessary for people who are first time buyers of a house that they do not feel alone in the entire process. The financial institutions ensure that they are not alone. Moreover, every information on one’s credit statement ensures that the person has an extra point when it comes to borrowing loans. Moreover, one can also adopt various techniques in order to improve upon the credit score. There are also certain methods that help to boost one’s score overnight. Whatever may be the methods, one should focus on raising one’s scores. By doing so, one can take the benefits of big offers that come one’s way. Once the borrower of loans outlines the resources, it becomes very simple to approach for the best financial organisations in order to avail the best offers.

Housing is a key sector where people are provided with a number of options. Financial organisations find this to be a booming sector and offer housing finance loans to aspirants. It is thus necessary for everyone to depend on them for housing loans as they are reliable. On attending the seminars conducted by these organisations, one gets a glimpse of what takes to buying and maintaining a property. Loans are a great means to buy property for those who just dream of possessing one.

Housing finance company LIC Housing Finance Ltd. reported a higher net profit for the first-quarter, backed by all-round performance with a strong asset and income growth.

The Mumbai-based company posted a first-quarter net profit of Rs.212.02 crore or Rs.22.23 per share, compared with Rs.123.84 crore or Rs.14.58 per share in the previous-year quarter. Net profit and earnings per share rose by 71% and 52% respectively.

Net interest income during the quarter was Rs.294.32 crore, up by 69% from the Rs.174.19 crore in the corresponding quarter last year, while other operating income amounted to Rs.40.90 crore, compared with Rs.35.14 crore in the previous-year quarter. Net Interest Margin for the quarter rose and stood at 3.01%, compared with 2.45% for the quarter ended June 2009. The company’s total income, including other income for the first-quarter was Rs.1,015 crore, compared with Rs.782 crore for the same period last year, registering a 30% growth.

During the quarter, loan sanctions rose by 51% to Rs.5,348 crore from the Rs.3,533 crore in the corresponding quarter last year, while loan disbursals were Rs.3,392 crore, up by 40% from the Rs.2,430 crore in the previous-year quarter.

Outstanding mortgage portfolio as at the end of June this year was Rs.40,030 crore, up from Rs.29,254 crore as on June 30, 2009, showing a 37% growth.

Gross NPAs and Net NPAs as on June 30, 2010 stood at 0.92% and 0.35% respectively, compared to 1.51% and 0.65% respectively as on June 2009.

Company Finance Director & Chief Executive R.R. Nair said: “We have commenced the year on a strong note continuing on our good all-round performance with a strong asset and income growth, which we are confident of sustaining along with improved asset quality.”

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LIC Housing Finance, a subsidiary of Life Insurance Corp, is interested in entering the banking business but would wait till the RBI issues its guidelines on the matter before taking a call, company  CEO R R Nair said.

“We are in-principle interested in the banking business but it is too premature to talk about it now. We will wait for the Reserve Bank guidelines on the issue before taking a decision,” Nair told PTI here today.

The Finance Minister Pranab Mukherjee announced in the Budget that the government was open to allowing more private entities and NBFCs into the banking sector.

Following this, a host of NBFCs have evinced interest in foraying into the segment. Among those interested in entering the banking business are Reliance Capital, the Bajaj group, the Tata Group, the Aditya Birla Group, Kerala’s Muthoot Group and the Rhriram Group.

The last time fresh banking licences were issued in 2003 Nair said LIC HF would have to see if it fitted into the guidelines to be issued by the RBI.

“If there is an opportunity and if we are eligible, then we will look at it. We will exercise our option of whether to enter banking or not, then,” Nair said.

The company was known for its speedy decision-making and should it decide to enter banking, then it could do so quickly, he said.

“Our machinery has the capability to move fast — our decision-making process is speedy. However, we will have to study the guidelines before taking any decision,” he said.

If you’re a first time homebuyer in Austin, Texas, there are quite a few resources available to you. Buying a home for the first time is very exciting but it can also be a time of confusion and stress. Making a large investment like a home purchase requires a lot of paperwork, approval processes and financial commitments. Fortunately, there are many programs and resources available to help you navigate this uncertain time.

Many first time homebuyers make the mistake of underestimating how much it will cost to purchase their new home. They assume that the financing process will take care of everything and they won’t have to pay a penny out of pocket in order to get into their home. There are real estate agent fees, down payments and closing costs that will be associated with buying a home.

With a first time home buyer grant, you can get help with these costs as part of the services sponsored by the Austin Housing Finance Corporation, which is a division of the Austin city government. The down payment assistance program (DPA) will help with purchasing a home by granting a specific amount of money to be used as a down payment for a home.

The standard DPA is up to $10,000 in a deferred, forgivable 0% interest loan that has a length of 10 years. The loan is completely forgiven if you stay in the home for 10 years without transferring the title. If you move before the 10 years are up, the loan will be paid back from the sale of your home.

The DPA program is only accessible to people who have completed a series of three classes at the Austin Housing Finance Corporation. The three class series is a part of the nationally recognized NeighborWorks “Keeping the American Dream” homebuyer education course. In order to access the DPA program and other first time home buyer services you have to attend the following:
-Class 1: Assessing Your Readiness to Buy and Money Management
-Class 2: Understanding Credit and Financing a Home
-Class 3: Selecting and Maintaining a Home and Managing Your Finances

These three classes compose a pre-purchase series that is available to people who live in the city limits of Austin, who earn 80% or less of the area’s median family income, who are employed and who have a Texas driver’s license.  After completing the three classes, you’ll be awarded a certificate which will gain you access to the DPA as well as many Travis County and State of Texas programs.

In addition to the pre-purchase classes, the Austin Housing Finance Corporations also offer post-purchase classes which are important if you find yourself in a position where you might lose your home. The course is similar to the pre-purchase classes and acts as a refresher on the basics of home ownership, particularly focusing on the financial commitments associated with owning a home. The requirements for the post-purchase classes are the same with regards to family income and location.

The details on these resources and more first time homebuyer programs are available on the Austin Housing Finance Corporation’s official website.