On Thursday, the India Mortgage Guarantee Corporation (IMGC) announced a partnership with Muthoot Homefin (India) Limited (MHIL) to offer mortgage guarantee backed home loan products to MHIL’s customers looking for affordable housing loans.
As demand for inexpensive and mid-income homes rises, Muthoot Homefin hopes to use a mortgage guarantee as a risk mitigation strategy. According to MHIL, the partnership with IMGC will assist Muthoot Homefin to improve its market penetration in existing markets throughout its 108 branches/locations, enabling homeownership in the affordable housing sector.
The loans are aimed at borrowers who work for individuals or small businesses and are paid in cash, as well as government retirees who have restricted access to a home loan because their pension is their only source of income. They are eligible for a house loan with a maturity of up to 70 years and borrowers with verifiable income but limited documentary verification. Self-employed borrowers with more housing equity can also apply for this loan with less documentation. The home loan term can be extended for an additional 10 to 15 years beyond retirement age, depending on the borrower’s profile.
“Mortgage guarantee will enable MHIL to allow higher loan amount (LTV ratio) to the customers at lower rates of interest. MHIL is currently offering ROI starting from 6.5% p.a. to Economically Weaker Sections under its Azad-i75 programme for Affordable Houses. It’s a triple Win partnership among MHIL, its customers and IMGC,” said Rajeev Khond, CEO, MHIL.
IMGC is India’s first mortgage guarantee company, and it collaborates with lenders to provide mortgage insurance and encourage early homeownership. Banking products, low LTV products, and evaluated income products are among the company’s surrogate products for self-employed customers.
“We look forward to partnering with Muthoot and expand our mutual footprint. The product has been developed using a calibrated approach and we are confident of a steady scale up. Muthoot has ambitious plans for the next financial year and we are delighted to collaborate with them in this journey,” said Mahesh Misra, CEO, IMGC.