Monetary regulator, Reserve Bank of India has finally brought an end to the era of teaser home loans in the country. Apart from this, the apex bank has also insisted that the downpayment in case of home loans should be set at 20% minimum.
It is an accepted fact all over the world that the credibility of a borrower is estimated by the amount that he is capable of paying as downpayment. If a borrower is unable to pay even 20% of the loan amount then his repayment capacity also comes under serious question.
However the concept of teaser loans was somehow different. It is completely logical if a person is allowed to pay less in the beginning of the loan and more in the later years as his income is also set to rise with every passing year.
Thus with the end of this scheme, the true or genuine home loan taker might get affected.