In order to support Centre’s ambitious Pradhan Mantri Awas Yojana (PMAY), an India-based India Mortgage Guarantee Corporation (IMGC) has launched a guarantee cover for PMAY to broaden the coverage of home loans with a lower level of risk on books of lenders. IMGC India’s first Mortgage Guarantee firm which gives guarantee cover for Pradhan Mantri Awas Yojana (PMAY)
Mortgage guarantee, also known as mortgage insurance company. This is insurance product which compensates banks and housing finance companies for losses that may arise when homeowner defaults on a home loan.
According to the company, this product will provide two real benefits to the home buyers under PM Awas Yojana. It allows home buyers to allow to extend the loan terms up to 30 years. Besides, this product also allows seven years term extension beyond retirement age and it will also enable lenders to offer loans to customers till they achieve the age of 75 years in some cases.
The IMGC CEO Amitava Mehra said that this product will help the achieve the target of providing housing for all by 2022. Through this product, we will help bridge the demand gap in low-income groups by increasing the credit flow.
In this product, IMGC guarantees to cover the first loss upto 20% of the outstanding principal balance, this entails paying of the outstanding equated monthly installments (EMIs) when the account is a non-performing asset to the maximum coverage amount.
In a real manner, this product will be launched by the company under a standardized program across lenders. At present, the company has joined hands with ith two banks and four housing finance companies and has guaranteed over 10,000 retail loans across the country covering a cross section of borrowers.
However, over 16 lakh affordable houses have been approved for construction under PMYA(Urban) with an investment of about Rs 90,000 crore, with a central assistance of about Rs 25,000 crore.
News Source: http://realty.economictimes.indiatimes.com/news/residential/indias-1st-mortgage-guarantee-firm-launches-cover-for-pradhan-mantri-awas-yojana/57553045