Homeowners will be able to apply for construction loans under new scheme

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New Homeowners Association (HOA) is looking to boost the number of people on its loan scheme to 5,000 from the current 1,500.

The scheme, which will see loan holders give first priority to applicants with the most suitable income and qualifications, will be launched on Tuesday.

The HOA will be offering the scheme to first-time home buyers from April 1, 2019.

Homeowners will not need to get any experience or qualifications to apply, as the application form will provide information on qualifications.

“It will be a real challenge for the first time home buyer to get the loan, but the HOA is keen to help the first- time homebuyer find a mortgage to help pay for their first home,” said Dr Shashank Gupta, HOA general manager.HOA general secretary and chief executive officer of HOA Home, Javed Jafar said the scheme would help boost home ownership.

“This scheme is not for the young people that are not ready to get into the real estate market,” he said.

“But, for the very rich or those with the financial capability, this scheme will be good.”

Homeowners on the HSA’s loan scheme can apply for a 10-year mortgage at 0.5 per cent interest rate for an annual loan of Rs 2,500 or Rs 3,000, whichever is higher.

A mortgage of Rs 5,800 for the same period would also qualify a borrower.

A 10- year mortgage is currently at 1.5 to 1.75 per cent for first-timers and 1.8 to 2 per cent on subsequent homes.

For borrowers, a 10 years mortgage rate will be the maximum amount they can borrow.

The current interest rate of 4.25 per cent is set by the Reserve Bank of India.