Do builder-bank tie-ups ease the process of getting home loans?

January 31, 2017
Do builder-bank tie-ups ease the process of getting home loans?

If you thought selecting your dream home was a big hassle, wait till you reach the part where you have to start arranging for a home loan!

A house is a great investment for the future with low risk factor and ensuring financial stability. As it’s a very expensive venture that swallows up a huge chunk of your income, a thorough research on where to get your home loan is needed; after all, you wouldn’t want to make an expensive mistake. You have to go through a myriad of companies to compare the interest rates offered by various financial institutions as well as the documents and criteria they need.

In some cases however, your home builder itself might suggest or insist upon a specific finance house for home loans, as they have a ‘tie-up’ with them. Though this would immediately set off alarm bells ringing in the minds of the prudent ones, usually there is nothing to worry about. Your suspicion could be due to previous scandals involving fraudulent realtors without approved property documentation or lack of approval for various phases of their projects; in which case, you have a right to be suspicious as there is a chance of your investment going down the drain.

In most cases, builders have tie-ups with finance houses for two reasons. One is that it’s an attempt to inculcate confidence in the customers mind and increase their sales. Second is because not all finance houses are ready to approve all builders, in which case a tie-up would helps save time spent running around for a lender. Though the builder stands to benefit from the tie-up, so does the buyer. While the buyer spends a significant amount of time finalizing on a lender, the builder loses money by paying interest on the capital needed for the project, and the interest these big-timers pay is a whopping 13-22%! They need to disburse out their own loan at the earliest to the buyers, and a tie-up here helps to save expensive time as the bank would have already investigated the property; only aspect remaining would be to investigate the buyer.

The buyer should also realize that if a reputed bank approves the builder’s project, then the buyer’s money is in trustworthy hands. It’s not as if the builder is doing the tie-up from the goodness of his heart, he also stands to benefit; a commission of about 0.5-1% is the builders gain.

You should however watch out for the banking partner as some ‘non-banking finance companies’ tend to be less strict and give room to the builder to be manipulative at his end. Most banks claim to sanction loans in a minimalistic time period, but it could take up to a month, in which case a builder tie-up comes as a blessing. A tie-up speeds up the time of loan disbursal and benefits the bank too as it increases their popularity, reputation as well as their profits.

So a tie-up appears to benefit all the parties concerned, the buyer, the builder as well as the bank. As long as it’s a reputed bank, looks like a good idea to go ahead and follow the builder’s choice for a home loan.

RECENT POSTS
ARTECH REALTORS

Shakthan Thampuran Palace

Shakthan Thampuran Palace – A Glimpse into Kerala’s Regal Past

Shakthan Thampuran Palace, also known as Vadakkekara Palace, is a significant historical monument located in Thrissur, Kerala. Renowned for its… Continue reading Shakthan Thampuran Palace – A Glimpse into Kerala’s Regal Past

Read More
Peechi Dam, Thrissur

Peechi Dam – A Scenic and Functional Marvel in Thrissur

Peechi Dam, located in the scenic district of Thrissur, Kerala, is not only an engineering marvel but also a picturesque… Continue reading Peechi Dam – A Scenic and Functional Marvel in Thrissur

Read More
invest in apartments in thrissur

Key Reasons to Invest in Apartments in Thrissur

Thrissur is witnessing a steady rise in its real estate market. With its rich history, vibrant festivals, and growing infrastructure,… Continue reading Key Reasons to Invest in Apartments in Thrissur

Read More

Related Projects

A few of our inspiring projects

Apartments in Trivandrum

Being the state political capital, an educational hub as well as home to Kerala’s largest and rapidly-expanding IT hub, Artech has realized the growth potential of Trivandrum as a prime spot for real estate investment. Artech builders in Trivandrum offer a number of lavish and eye-popping apartment projects located in classy niche areas to inspire you.

More
Information
Apartments in Thrissur

The city built around the base of a 65-acre hillock is steeped in rich cultural and spiritual history. Aside from being known as the cultural hub of Kerala, Thrissur is also known as a major business center. Artech offers Thrissur, one of its finest creations to-date, the Artech Gateway, featuring exclusive lifestyle apartments.

More
Information
Apartments in Kollam

Located on the banks of the scenic Ashtamudi Lake, this ancient city dating back to the biblical times, has a strong commercial reputation. The verdant beauty of this city also attracts many people to set-up homes here. As flats in Kollam are in great demand, Artech Realtors have a number of luxurious projects offering superior homes with amazing blue vistas to its residents.

More
Information
Apartments in Kottayam

Kottayam has always been at the forefront for education and literacy. Aside from this, it’s a peaceful town that thrives on commerce. Artech Realtors have given Kottayam their first taste of high-end luxury living with Artech Rio. The unending views of the surrounding greenery, the meandering river and outstanding amenities makes life in these classy apartments one-of-a-kind.

More
Information
Apartments in Thiruvalla

Thiruvalla, which has earned the moniker the ‘Land of the NRIs’ is situated on the banks of the Pamba and Manimala rivers. With a paucity of suitable homes for the cream of the society, there was a glaring need for luxury flats in Thiruvalla. The blissful Artech Kaazhcha apartments offer an inspiring mix of high-end comfort and luxury.

More
Information

DISCLAIMER

The information provided on this website is meant for general guidance. Though we have taken utmost care on the accuracy of the contents, the customer should make an autonomous assessment of the contents. However, the prospective buyers should rely upon the terms and conditions of the sale and construction agreement between the Builder and the Client.

The visuals of the projects symbolize artistic impression only. The information contained herein including the fittings, finishes, features, floor size and color etc. in the visuals are subject to change. However, the plans & specifications indicated in the Builder and Client agreements are final and we have not authorized anyone to make any oral commitments or promises on our behalf in regard to the plans and specifications of the apartments/projects.

For any clarification please feel free to call +91 9847 600 600 or walk into our offices. Our representatives will always be at your service.