Mortgage Insurance Broker

Overall Rating: star ratingstar ratingstar ratingstar ratingstar rating[0/5]Total Votes [  ]  
Rate this page:
Off late many of the investors are taking leverage of mortgage insurance broker of India. The main functions of these Indian mortgage insurance broker are broking of mortgage loan against a valid insurance product. The mortgage insurance broker spots and facilitates mortgage borrower with loan against the valid insurance. The quantum of the mortgage loan is determined in accordance with the maturity value or sum assured of the insurance product of the borrower. Generally, the mortgage insurance broker selects an interest rate of mortgage loan value, which is lower than the rate of interest paid by the insurance company. This is done to earn commission for the service rendered to the mortgage borrower. In other words, the difference of interest earned and interest paid by the mortgage borrower is the income of the mortgage insurance broker.

The Indian mortgage financing rates are of the following types -

Fixed Mortgage Rate - in this case the rate of interest remains fixed throughout the loan term. The mortgage rates does not varies according to market conditions. In other words, the rate of interest is pre-fixed during the process of borrowing and it generally varies between between 12.5 % to 25 %.

Flexible Mortgage Rate - is one in which the interest rate varies according to market movements. This type of interest rate is called 'adjusting' or 'floating' rates. The risk factor is high in this type of interest rates.

The Indian mortgage market does not have individual company that facilitates mortgage loan against insurance but this is being offered by some government institutions and by banks. Some of the well known mortgage financing companies that operates as mortgage insurance broker in India are as follows -

  • LIC Housing Finance
  • HDFC
  • ICICI Home Finance
  • SBI Housing Finance
  • UCO Bank
  • Allahabad Bank
  • United Bank of India
  • Kotak Mahindra Bank
  • Citi Bank
  • Standard Bank
  • HSBC
Presently, the mortgage financing sector in India is witnessing steady growth and the size of the mortgage loan business in India is estimated to be around US $ 18 billion. Ever growing real estate requirements for new office space and urban housing and its subsequent development has fueled its growth. The estimated size of the organized mortgage industry in India account only for 25% of the total housing investment in India. The commercial banks both National and Foreign Banks along with Cooperative banks and other non-banking financial companies are registering stupendous growth along with dedicated housing finance companies.

The home mortgage loans has been the main growth driver for the commercial mortgage financing business in India and it is consistently registering 20-50 % growth on year-on-year basis, from the year 2000 onwards. Further, with the growth of the Indian insurance market, the mortgage insurance market in India is set for stupendous growth. Bottlenecks like low penetration capability, ignorance amongst masses, poor accessibility, lengthy processing time, and elaborate documentation are hampering smooth growth of the business of the mortgage insurance broker in India. The government of India present 5 Year Plan stresses for the overall development of the housing finance industry and have accepted suggestions for the revamping of land laws, rental laws, fast mutation and registration process along with setting up of credit rating organization and modern mortgage insurance products for the growing Indian mortgage market.

  • UCO Bank

  • Last Updated on 5/26/2011