Chapter-1

INTRODUCTION TO STUDY
Introduction

The Indian economy is emerging as a one of the strongest economy of the world with the GDP
growth of more than 8 % every year. A strongest banking industry is important in every country
and can have a significant affect in supporting economic development through efficient financial
services. Banking sector play a vital role in growth and development of Indian economy. After
liberalization the banking industry in India under gone major changes. The process of
liberalization and globalization has strongly influenced the Indian banking sector. A stable and
efficient banking sector is an essential precondition to increase the economic level of a country.

Liberalization policy introduced in the banking sector in India led to consolidated competition,
efficient allocation of resources and introducing innovative methods for mobilizing of saving.
The ability of banks to analyze its financial position for improving its competitive position in the
market place. Most banks in India are currently focusing an expanding their service network. A
growing Indian economy, expanding their various segments. After the recommendations of
Narshinham Committee report with the entry of many private players. Indian banking industry
has transformed into a customer oriented market. It now consists of multiple products and
customer groups and various channels of distribution. It is well known fact that an effective and
efficient banking system is important for the long-run growth and development of the economy.
The different products in a bank can be broadly classified into:

 Retail Banking.
 Trade Finance.
 Treasury Operations.
Retail Banking and Trade finance operations are conducted at the branch level while the
wholesale banking operations, which cover treasury operations, are at the head office or a
designated branch.

Retail Banking:
 Deposits
 LOANS, Cash Credit and Overdraft
 Negotiating for Loans and advances
 Remittances
 Book-Keeping (maintaining all accounting records)
 Receiving all kinds of bonds valuable for safe keeping

Trade Finance:
 Issuing and confirming of letter of credit.
 Drawing, accepting, discounting, buying, selling, collecting of bills of exchange, promissory
notes, drafts, bill of lading and other securities.

Treasury Operations:
 Buying and selling of bullion, Foreign exchange.
 Acquiring, holding, underwriting and dealing in shares, debentures, etc.
 Purchasing and selling of bonds and securities on behalf of constituents.
The banks can also act as an agent of the Government or local authority. They insure, guarantee,
underwrite, participate in managing and carrying out issue of shares, debentures, etc.

Apart from the above-mentioned functions of the bank, the bank provides a whole lot of other
services like investment counseling for individuals, short-term funds management and portfolio
management for individuals and companies. It undertakes the inward and outward remittances
with reference to foreign exchange and collection of varied types for the Government.

HOME LOANS

Over the last few decades the role of loan sector has undergone a paradigm shift. It is widely
recognized as an important aspect of the source of loan for the people and considered it as a short
and long-term investment.

After zeroing down on my research area, I have collected information through only primary. I had a
constant discussion with consumer.

The objective of this report is to study “Customer Perception and Attitude towards home loans”. For
this survey was conducted through structured Questionnaire.

In today’s competitive business world every customer is significant for the lending home loan. The
customer expectations are very high so it should be kept in mind and offer them best possible service.

The report deal with the conceptual background of home loan and over view of the banks, the next part
deals with research design of the study that is problem identification, objectives and how the research was
carried out. The outcome of the study shows that the level of customer awareness towards Home Loan is
good with the benefits and service what they are giving and most of the people wants to go for
investments.

Banks can start some good promotional activities to build its brand and to make recognition by all the
peoples in the market .The effective marketing channel with the personal selling is an essential factor in
influencing banks growth.
The roof over one’s head and ground beneath one’sfeet count as the bare necessities of life. There’s
nothing quite like owing a home, however humble to give that warm and glowing feeling. But when one
buys a home, one has much more than a feel good purchase in mind! It’s also a crucial investment
decision, perhaps the biggest spending decision of one’s life. There are ample opportunities today for
young salaried investors to plan their moves early and buy a house at right time- and at right price. In the
process, not only do they fulfill that cherished dream of owing a house, but also put themselves on the
path to acquiring property that would meet the needs and aspirations of their growing family, even as it
leads to wealth creation. Every individual aspires to own a home. But many either spend a lifetime saving
to purchase a house or exhaust money on monthly house rents.

Take a house loan and let the monthly rent (easily converted into affordable EMI’s) build dream
home.

HOME LOANS

1) Customer must be at 21 year of age when the loan is sanctioned.

2) The loan must terminate before or when you twin 65 year of age or before retirement,

Whichever is earlier.

3) Customer must be employed or self employed with regular source of income

LOAN AMOUNT

 A number of factors are taken into account when assessing repayment capacity.
 Customer income, age, number of dependents, qualification, asset &liabilities, stability and
continuity of customer employment. Business is one of them. However there are ways by which
you can enhance your eligibility.
 If the customer spouse is earning put he/she as a co-appSBIant. the additional income shall be
included to enhance the loan amount. Incidentally, if there are any co owners they must
necessarily be co-appSBIant customer fiancée’s income can also be considered sanctioning the
loan on your combined
 Income .the disbursement of the loan, however will be done only after the submit proof of
Marriage. Providing additional security like bonds, fixed deposits &SBI poSBIies may also help
to enhance Eligibility.
  While there is no need for guarantor, it could be that having one might enhance your credibility
with us. If so, our loan officer would provide customer with positive necessary details.
 The final act to be sanctioned will depend on your repayment capacity. However, what customers
ultimately are entitled to will have to conform within the limits fixed for each loan.
 Also when the company looks at the total cost, registration charges, stamp duty, transfer charges
are also included.

FIND THE RIGHT HOME

Provide facility for search of free online property. A one stop shop for all their

Real Estate needs.

WHAT YOU GET

0% brokerage on first sale properties access the entire market under our roof site visits to the properties
short listed by you. Help in negotiating the best price. Help the legal documentation.

DISBURSEMENT

Customer loan will be disbursed after you identify & select the property or the home that customer are
purchasing and on their submission of the requisite legal documents.

While the customer may be under impression that the list of documents asked for it is rather extensive.
Each and every single document asked for will be verified & check to ensure their safety. This may take
some time but the banks want to ensure a clear title and will complete all the legal & technical
verification to ensure that they have full right to their home.

The 230 a clearance of the sellers or 371 clearance from the appropriate income tax authorities (if
appSBIable) is also needed on satisfactory completion of above, on registration of conveyance deed and
on the investment of your own contribution, the loan amount (as warranted by the stage of construction)
will be disbursed by ICICI.

The disbursement will be in favor of the builder/seller.

At Banks , we disburse the loan amount after you identify and select the property or home that you are
purchasing and submit the requisite legal documents.

While you may be under the impression that the list of documents asked for is rather extensive, please
note that it is for your own good. Each and every single document asked for will be verified and checked
to ensure your safety.

This may take some time but we want to ensure a clear title and will complete all the legal and technical
verifications to ensure that you have full rights to your home.

Your loan will be disbursed after you identify and select the property or home that you are purchasing
and on your submission of the requisite legal documents.
The 230 A Clearance of the seller and / or 37I clearance from the appropriate income tax authorities (if
appSBIable) is also needed.

Disbursement Documents

Property documents (as per P&D for respective states and as asked by empanelled lawyers for individual
cases)

Facility Agreement

Disbursal Request Form

Cheque Submission Form – for Pre EMI and EMI cheques

ECS or Auto Debit for ICICI Bank account holders or Post Dated Cheques for EMI / Pre EMI

Personal Guarantor’s Documents (PG Form, Photograph, Identity Proof, Address Proof, Signature
Verification and Income documents, if appSBIable)

In case of property is owned by a company

 Memorandum of Entry
 Form 8
 NOC
AMOUNT

This largely depend on a no. of facts like ones age ,profession, salary, the city one reside is among other
such factors. it varies between 2.1lakh to 1crore depending on the lender- as the rule of the thumb,
depending on HFC one have to cough up 15% - 20% of the loan amount as the down payment. For
smaller amount, this may not be much. But for figure remaining into lakh this could make loads of
difference. For e.g. an apartment of costing Rs 10 lakh may get 85% financing, so one will have to
arrange for remaining Rs 15 lakh. If one takes this into amount the additional thousands will definitely
put a strain on ones finances

TENURE

Generally the maximum tenure of home loans is 15 years, with a few lenders offering tenure of 20 years
or more. ICICI offers 15 year loan. The longer the tenure, the more one pay in total interest but ones
monthly payment will be less. So depending ones earning potential & bank balance one can choose an
appropriate tenure. An important requirement of most of the banks/ HFCs is that one pays up the entire
loan before one retires. One can always prepay ones entire loan amount before it is due. There is a trend
to do away with the pre-payment penalty being imposed by some lenders. So its best one checks on this
as well.

INTEREST RATE

Without doubt the most important parameter to factor into ones calculations. The interest rates may vary
from institution to institution. Repayment is in the form of EMI’s (equated monthly installment). The
longer the tenure, the more one pays in interest, but ones monthly payment will be less. The interest rate
of ICICI is

TenureInterest TypeInterest Rate

.15 -20 Fixed 13.75 %

10 -15 Fixed 16 %
5 - 10 Fixed 16 %

1-5 Fixed 16 %

1-5 Floating 16 %

5 - 10 Floating 11.25 %

10 - 15 Floating 16 %

15 - 20 Floating 16 %

REFINANCE

This is concept that is yet to catch on in the home loan market but is bound to be a major service in the
months to come. Under this facility, one can take a new loan from another bank/HFC to pay back another
loan before its natural tenure. It gives one the opportunity of prepaying ones high cost debt and get a
lower cost one. In today’s falling interest rate scenario one should use this vehicle to lower ones debt
payment as much as possible. The lender facilitates the shift by paying the outstanding and transferring
the asset to other portfolio.

MISCELLANEOUS CHARGES

The interest rates and EMI’s are not only the cost factor. Never underestimate how much the processing
fee and administration fees amount to. A 0.5% administration fees and 0.5% processing fee on say, a
Rs.500000 loan would be Rs.5000. other timesit could be just one fee (either administration or processing
but could yet work out to be much more if it is considerably higher at, say, 2.5% or 3%. The various other
fees, which one is required to pay along with the margin amount are:

INTEREST TAX:

This is tax payable on the interest paid on a home loan and not the principal. This is sometimes included
in the interest rate of the loan, or may be charged separately as interest tax.
PROCESSING CHARGE

It is the fee payable to the lender on applying for a loan. It is either a fixed amount not linked to the loan
or may be a percent of the loan amunt. The loan amount received by you can be less than processing fee.

PREPAYMENT PENALTIES

When the loan is paid back before the nd of the agreed duration a penality is charged by some banks or
companies, which is usually between 1% and 2% of the amount being prepaid.

OTHERS
It is quite possible that some lends may levy a documentation or consultant charge.

ICICI BANK ANNOUNCES ITS BASE RATE, VALID FROM JULY 1, 2010

ICICI Bank has announced a shift in the existing benchmark rate from Floating Reference Rate (FRR)/ I-
BAR the Base Rate (I-Base). The same will be effective for all its mortgage products from July 1, 2010.

The ICICI Bank Base Rate (I-Base) has been fixed at 7.50%. This is the minimum rate that ICICI Bank
will charge to its new customers.

BENEFITS
 Some of our key benefits are:
 Guidance through out the process
 Home loan amounts suited to your needs
 Home Loan tenure upto 20 years
 Simplified documentation
 Doorstep delivery of home loan papers
 Sanction approval without having selected a property.
 Free Personal Accident Insurance (Terms & Conditions)
 Insurance options for your home loan at attractive premium
Home return:
The customer’s home is more than just four walls and a roof that provides shelter for the
customer and the customer’s family. It is also a valuable asset, which the customer can
put to use while continuing to occupy it. The banks Home Returns Plan offers the
customer the opportunity of getting a loan against the customer’s house/residential
property for practically any purpose. With our friendly, flexible and fast service, it is
simply the best way to free the wealth locked up in the customer’s property.
"Home Returns now brings the customer Mortgage Loans for Education. This zero hassle
loan helps the customer fund the customer’s children's higher studies. Want to know how
the customer’s children can follow their dreams”
Unmatched benefits of Banks Home Returns:
The advantage of dealing with banks one of the largest financial conglomerates of the
world, is plenty .Amount of loan from Rs. 2 Lakh to Rs. 1 Crore*.Loans against rented,
vacant and self-occupied residential properties. Loan up to 60 percentage of the market
value of the customer’s residential property. Term of loan up to a period of 15 years.
Flexible income criteria. Special schemes for businessmen. Easy income and property
documentation criteria. Repayment on Equated Monthly Installments (EMIs) basis.
Loans can also be availed on property belonging to the customer’s family members.

Mortgages loan for education:

If money is what is standing between the customer and a world-class education, worry
not! Now banks help the customer to fund the customer’s education by giving the
customer a loan against the customer’s home. So if the customer wants to pursue the
customer’s studies in India or overseas, the customer can do so now without any financial
worries.
 CHAPTER – 2
COMPANY PROFILE
INTRODUCTION OF HDFC BANK

HDFC (Home Development Finance Corporation) Home Loan, India have been serving the people for
around 3 decades and providing various housing loan according to their varied needs at attractive and
reasonable interest rates. Owing to their wide network of financing, HDFC Home Loans provide services
at doorstep and helps you find a home as per your requirements.

COMPANY PROFILE

HDFC Limited founded in 1997 by Ravi Maurya and Hansmukh bhai Parekh, is an Indian NBFS
focusing on home loans. HDFC operates through almost 450 locations throughout the country with its
corporate head quarters in Mumbai, India. HDFC also has an international office in Dubai, UAE with
service associates in Kuwait. HDFC is the largest housing company in India for the last 27 years.

HDFC was amongst the first to receive an in principal approval from RBI to set up a bank in the private
sector, as a part of the RBI’s liberalization of the Indian banking industry. It was incorporated on 30 th
august 1994 in the name of ‘HDFC Bank Limited’, with its registration office in Mumbai. HDFC began
its operations as a scheduled commercial bank on 16th January 1995.
HDFC LOAN SCHEME PURPOSE

HDFC Limited offers loans for the following purposes:

 Land purchase
 Home construction/purchase
 Home extension
 Home improvement loans
 Short-term bridge loans
Non-resident premises loans for professionals.

DOCUMENTS REQUIRED FOR HDFC HOME LOAN

SALARIED CUSTOMER SELF EMPLOYED SELF EMPLOYED BUSINESS

PROFESSIONALS

Application form with photograph Application form with photograph Application form with photograph

Identity and Residence Proof Identity and Residence Proof Identity and Residence Proof

Latest Salary-slip Education Qualifications Certificate Education Qualifications Certificate

and Proof of business existence and Proof of business existence

Form 16 Last 3 years Income Tax returns Business profile

(self and business

Last 6 months bank statements Last 3 years Profit /Loss and Last 3 years Income Tax returns
Balance Sheet (self and business)
Last 3 years Profit /Loss and
Balance Sheet
Processing fee cheque Last 6 months bank statements Last 6 months bank statements (self
Processing fee cheque and business)
Processing fee cheque

ELIGIBILITY

The repayment capacity as determined by the HDFC will help in deciding how much we can borrow (the
cost of the property or Rs.1crore whichever is lower). Repayment capacity takes into consideration
factors such as income, age, qualifications, number of dependents, spouse’s income, assets, liabilities,
stability and continuity of occupation and saving history. And, of course, HDFC’s main concern is to
make sure you can comfortably repay the amount you borrowed

FEE:

A processing fee of 0.5% of the loan amount applied for rs.5 per rs.1000 of the loan applied for is payable
when the application form is submitted to HDFC. This fee is in the respect of costs incidental to the
application. For example:

Loan applied for Fees

Rs.20000 Rs.100

Rs.100000 Rs. 500

On approval of the loan, a loan offer is made to you on acceptance of the offer. You have to pay an
administrative fee of Rs.0.5% of the loan approved. You can also pay the processing fee and
administrative fee upfront i.e. 1% of the loan at the time of submission of the loan application itself. This
fee is in respect of the costs incidental to the application. Taxes as applicable will be charged on the fees
collected.

CHARGES:

For Fixed Rate Home Loan (FRHL) an early redemption charge of 2% of the amount being prepaid is
payable, if the amount being repaid is more than 25% of the opening balance. However under Adjustable
Rate Home Loan (ARHL) option early redemption charges of 2% is payable only in case of commercial
refinance. You may be required to submit the copies of your Bank Statements or any other documents
that HDFC deems necessary to verify the source of prepayment.

You can make payment for fees and charges by cheque marked “payee’s account only” drawn on a bank
in a city where HDFC has an office or by demand draft (payable at par to HDFC).

LIC HOME FINANACE COMPANY LTD

INTRODUCTION

LIC Housing Finance Limited (LIC HFL) is an Indian housing finance company having its
Registered and Corporate office at Mumbai. It provides housing loans to individuals, builders,
development authorities, employers organisations, etc. LIC was founded in 1989. It has 7
regional offices, 13 back-offices and 181 marketing units across India. LIC has different loan
product like Home Loan, Corporate Loan, Builders/ Developers. Home Loans in LIC even lends
loan to resident as well as non resident for purchase, Construction, Extension and even to repair
your houses. LIC HFL offers eligible customers instant e-approval on home loan applications on
BankBazaar.com.

HISTORY
LIC Housing Finance (LICHF) was incorporated on June 1989. It is the largest housing finance
company in India. The core business of the company is to provide long term finance for various
housing needs.

It provides finance to individuals as well as to corporate for purchase, construction, repair,

renovations of new, existing flats and houses. It also offers finance for purchase / construction of
Clinics / Nursing Homes / Diagnostic Centers / Office Space and also for purchase of
equipments.
The company’s GDR was launched in 2004 and is listed on the Luxembourg Stock Exchange
.
LICHF has a network of 13 back offices, 181 marketing units, 773 direct sales agents
(DSA), 3400 home loan agents (HLAs) and 615 customer relationship associates (CRAs)
acrossIndia.

The Company has set up a Representative Office in Dubai and Kuwait to cater to the Non–
Resident Indians in the GLCC countries covering Bahrain, Dubai, Kuwait, Qatar and Saudi
Arabia. Today the Company has a proud group of over 10,00,000 prudent house owners who
have enjoyed the Company's financial assistance.

LIC Housing Finance cut interest rates for new loans by 0.5% where for customers opting for
floating rate loans between Rs 30 lakh and Rs 75 lakh, the new rates will be 8.755 against 9.25%.

-Financial Institutions have increased their stake from 0.01% to 1.96% and Mutual Fund
companies have increased their stake from 0.35% to 1.06% in LIC Housing Finance.

-LIC Housing Finance Ltd has decreased the floating rate of interest under individual loan
scheme to 9.5% from 11%.

DOCUMENTS REQUIRED FOR SANCTION HOME LOAN

LIC Home Loans, India’s leading Home Loans Provider, offers attractive interest rates and
unbeatable benefits to ensure that you get the best deal. Keeping your convenience in
consideration, we ask you for minimal mandatory documents for the sanctioning of your home
loan, to keep the process totally hassle-free.

HOME LOAN

1) Customer must be at 21 year of age when the loan is sanctioned.

2) The loan must terminate before or when you twin 65 year of age or before retirement,Whichever is
earlier.
3) Customer must be employed or self employed with regular source of income

We require the following documents to sanction your home loan

Sanction Documents Completed application form

Photograph

Fee Cheque

Photo Identity Proof

Age Proof

Signature Verification Proof

Residence Address Proof

Document for the Salaried

Last 3 months’ Salary Slip

Form 16

Bank Statement for the last 6 months from Salary Account

Repayment Track record of existing loans / Loan closure letter

Document for the Self-employed

Income Tax Return / Computation of Total Income / Auditors Report / Balance Sheet / Profit
& Loss Account certified by Chartered Accountant for last 2 years (3 years for Home Equity)
(both for business and personal of partners/directors)

Bank statement for the last 6 months from operating account

Repayment Track record of existing loans / Loan closure letter

Board Resolution in case of a company

Proof of existence

Office Address Proof

Photo Identity Proof, Residence Address Proof, Signature Verification Statement for all the
main partners / directors.

DISBURSEMENT

Customer loan will be disbursed after you identify & select the property or the home that customer are
purchasing and on their submission of the requisite legal documents.

While the customer may be under impression that the list of documents asked for it is rather extensive.
Each and every single document asked for will be verified & check to ensure their safety. This may take
some time but the banks want to ensure a clear title and will complete all the legal & technical
verification to ensure that they have full right to their home.

The 230 a clearance of the sellers or 371 clearance from the appropriate income tax authorities (if
applicable) is also needed on satisfactory completion of above, on registration of conveyance deed and on
the investment of your own contribution, the loan amount (as warranted by the stage of construction) will
be disbursed by LIC.

The disbursement will be in favor of the builder/seller.

At LIC Home Loans, we disburse the loan amount after you identify and select the property or home that
you are purchasing and submit the requisite legal documents.

While you may be under the impression that the list of documents asked for is rather extensive, please
note that it is for your own good. Each and every single document asked for will be verified and checked
to ensure your safety.

This may take some time but we want to ensure a clear title and will complete all the legal and technical
verifications to ensure that you have full rights to your home.
Your loan will be disbursed after you identify and select the property or home that you are purchasing
and on your submission of the requisite legal documents.

The 230 A Clearance of the seller and / or 37I clearance from the appropriate income tax authorities (if
applicable) is also needed.

On satisfactory completion of the above, on registration of the conveyance deed and on the investment of
your own contribution, the loan amount (as warranted by the stage of construction) will be disbursed by
ICICI Bank

Property documents (as per P&D for respective states and as asked by empanelled lawyers
for individual cases)

Facility Agreement

Disbursal Request Form

Cheque Submission Form – for Pre EMI and EMI cheques

ECS or Auto Debit forLIC account holders or Post Dated Cheques for EMI / Pre EMI

Personal Guarantor’s Documents (PG Form, Photograph, Identity Proof, Address Proof,
Signature Verification and Income documents, if applicable)

In case of property is owned by a company

 Memorandum of Entry
 Form 8
 NOC

AMOUNT
This largely depend on a no. of facts like ones age ,profession, salary, the city one reside is among other
such factors. it varies between 2.1lakh to 1crore depending on the lender- as the rule of the thumb,
depending on HFC one have to cough up 15% - 20% of the loan amount as the down payment. For
smaller amount, this may not be much. But for figure remaining into lakh this could make loads of
difference. For e.g. an apartment of costing Rs 10 lakh may get 85% financing, so one will have to
arrange for remaining Rs 15 lakh.

If one takes this into amount the additional thousands will definitely put a strain on ones finances

TENURE

Generally the maximum tenure of home loans is 15 years, with a few lenders offering tenure of
20 years or more. LIC offers 15 year loan. The longer the tenure, the more one pay in total
interest but ones monthly payment will be less. So depending ones earning potential & bank
balance one can choose an appropriate tenure.

INTEREST RATE

Without doubt the most important parameter to factor into ones calculations. The interest rates
may vary from institution to institution. Repayment is in the form of EMI’s (equated monthly
installment). The longer the tenure, the more one pays in interest, but ones monthly payment will
be less.

Tenure Interest Type Interest Rate

15 -20 Fixed 13.75 %

10 -15 Fixed 16 %

5 - 10 Fixed 16 %
1-5 Fixed 16 %

1-5 Floating 16 %

5 - 10 Floating 11.25 %

10 - 15 Floating 16 %

PROCESSING FEES

It is the fee payable to the lender on applying for a loan. It is either a fixed amount not linked to
the loan or may be a percent of the loan amunt. The loan amount received by you can be less
than processing fee

BENEFITS

 Some of our key benefits are:

 Guidance through out the process
 Home loan amounts suited to your needs
 Home Loan tenure upto 20 years
 Simplified documentation
 Doorstep delivery of home loan papers
 Sanction approval without having selected a property.
 Free Personal Accident Insurance (Terms & Conditions)
 Chapter -3

REVIEW OF LITERATURE
Housing finance all over the world are undergoing tremendous changes and have acquired great
significance in the present day context of liberalization, globalization and modernization of the society. A
good number of research works have been undertaken by individual researchers and institutions
invariably dealing with different aspects of housing finance. A brief review of the major studies which
are particularly pertinent for the present study is attempted here

.
  By analyzing the question of housing in the country, Ananda Bose,C.V (1996)
emphasized the need for propagating cost-effective and environment friendly building
technology. He also underlined the needfor bringing out a new design and construction
culture, avoiding costs and eliminating wrong notions.

 Lahiry, S.C (1996) observed that the rising cost has a dampening effect in the housing
sector and the need of the hour is to promote low cost and environment friendly
technology and use of indigenous products. He opined that the housing concept has
undergone drastic changes and as such the skills of the people to take-up new housing
technologies have to be developed.

 Kurana, M.L (1998) analysed the magnitude of the housing problem, housing finance
companies, legal aspects of housing cooperatives and procedural simplification of
housing loans. He suggested the necessity for education and training for the members of
the housing co-operatives and also the legal aspects including the adoption of model law
formed by the Central Government.

 Krishna, R.R and V.V.Ganesh Murthy (1998) observed the views that there is a vast
scope for housing promotion in India and the banks and housing finance companies can
play a vital role in the promotion of housing. They suggested that reduction in the
housing loan interest and simplified procedure for sanctioning housing loan will boost the
construction of houses.

 Leelamma Kuruvilla (1999) throws light on National Housing Policy and new
initiatives in housing finance. She suggested that the change in the legal frame-work,
simplifying the procedure for housing finance and the active involvements of the
Government in the housing sector will definitely mitigate the housing problem.

 Mohinder Singh (1999) states the magnitude of the housing problem in the country and
various national housing policies of the Government. He reviewed the detailed statistical
data and suggested the following:

a) sufficient loan amount free from corruption and a low rate of interest,
b) a country-wide survey to find out the real housing storage,

c) standardization for low cost housing and

d) regular monitoring andfollow-up action.

 Parimal.H.Vyas and Sandip.K.Bhat (1999) who analyse the major housing finance
institutions, critical issues of housing finance, interest rates and the repayment techniques
observed that the restructuring of housing finance institutions by developing appropriate
marketing orientation programmes are necessary to face the challenges in the present day
world of liberalisation and globalisation.

 Sharma,A.K.(1996) highlights the fact that the challenges of homelessness and urban
slums are largely the spill over problems of inadequate rural habitat. He stated that the
housing is closely connected with growth of population, modernisation, poverty,
development and information and the poor people of India, lack all basic facilities as they
are incapable of meeting the rising cost of building materials. He also opined that Indians
cannot solve the housing problem without a strong political will and properly designed
strategies.

 Nair,K.N.S and S.G. Jayachandra Raj (1994) observed that Kerala stands unique in the
realm of growth and development. But, even in the wake of state’s rapid expansion in the
social sector, it is to be observed that Kerala projects a dichotomy picture of development
comprising of feeble economic structure along with developed social culture.

The ICFAI journal of Monetary Economics, November ’2004 it is studied that “greenwood and
Jovanovich (1990) in their study analyzed the role that financial institutions play in collecting and
analyzing information and use this information for utilizing funds by investing in such projects that are
high-risk while at the same time yield highest return.

The ICFAI Journal of Service Marketing Dec’2004 “It is important to note that whatever financial
products are put in the market, it can only be successful if customer has a need for it. Thus the need to
study customer behavior becomes paramount. This flows naturally from the marketing concept that
emphasis the idea of looking at the product from the consumer’s point of view,”

In Indian Journal of Marketing, May’04 Marketing of Banking Services in the Globalize Scenario –
Emerging Challenges- By Dr. V. GOPALAKRISHNAN.
Banking services largely depends upon customer demands and their perceived performance. In urban and
metropolitan sectors customers are more knowledge and demand more facilities than offered. They are
looking for services that are cheaper, faster and qualitatively better”

The STATISTICAL METHODS, By S. P. GUPTHA. S.P gives a very in-depth study about the
various statistical tools and techniques that could be used for various researches work purposes.
Each statistical test has been discussed very much in detail and this book has acted as the back bone
for this research study by helping the research work in using various statistical tools like chi-square,
One way ANOVA test, Two way ANOVA test etc.,
The Marketing Management -By PHILIP KOTLER, which is one of the masterpieces in the field of
marketing, has given an excellent coverage in the various fields of marketing. The author has very
elaborately examine the various issues in designing the marketing strategies for various companies,
tactical marketing and also the hurdles that arises in the administrative side of marketing which were all
very much useful in analyzing the various problems of this research study and finally in also putting forth
various feasible recommendation and suggestion for this research work. This book has also presented
various frameworks for analyzing certain recurrent problem in the field of marketing, which were also
effectively used in this research work.

The RESEARCH MARKETING, By McGauran L.L. gives more stress on the various categories of
information that should be collected for carrying out the preliminary investigation for the various
research studies. The author McGauran L.L. gives importance to six categories of information that re to
be used for preliminary investigation namely

a. the product
b. the company, industry and competition
c. the market
d. the channel of distribution
e. the sales
f. the sales promotion policies.

Further this book also stresses on the pilot survey that should be conducted before starting the original
survey. Hence taking all this into account, a preliminary questionnaire was drafted and it was tested
among five customers. The flows found in the questionnaire were later rectified after consulting few
experts too in this field and finally the original questionnaire was drafted.

Several studies have been done by various researchers in the context of home loans. The details of
reviews are below.
Berstain David (2009) examined in his study taken from 2001 to 2008 that in this period there is
increasing use of home loans as compared to private mortgage insurance (PMI).

Vandell, Kerry D (2008) analyses the sharp rise and then suddenly drop down home prices from the
period 1998- 2008. Changes in prices are for the reasons as such economic fundamentals , the problem
was not subprime lending per se, but the dramatic reductions and subsequent increases in interest rates
during the early- mid-2000 , the housing loan boom was concentrated in those markets with significant
supplyside restrictions, which tend to be more price-volatile. The problem was not in the excess supply of
credit in aggregate, or the increase in subprime per se, but rather in the increased or reduced presence of
certain other mortgage products.

La courr, Micheal (2007) analyses in his study, the factors that affect the increase in the level of Annual
percentage rates spread reporting during 2005 over 2004.The three main factors are:

(1) changes in lender business practices;(2) changes in the risk profile of borrowers; and (3)
changes in the yield curve environment.

The result shows that after controlling the mix of loan types, credit risk factors, and the yield curve, there
was no statistically significant increase in the reportable volume for loans originated directly by lenders
during 2005.

La courMicheal (2006) examined the home purchase mortgage product preferences of LMI households.
Objectives of his study were to analysis the factors that determined their choice of mortgage product. The
role pricing and product substitution play in this segment of the market and to verify whether results vary
when loans are originated through mortgage brokers. In this case regression analysis has been used and
results have shown that high interest risk reduces loan value.

Dr. Rangarajan C. (2001) said that the financial system of India built a vast network of financial
institutions and markets over times and the sector is dominated by banking sector which accounts for
about two-third of the assets of organized financial sector.

Haavio, Kauppi (2000) stated that countries where a large proportion of the population live in owner–
occupied housing experience higher unemployment rates than countries where the majority of people live
in private rental housing.This might suggest that rental housing enhances labour mobility. In this paper,
they develop a simple inter temporal two region model that compares owner occupied housing markets to
rental markets and to analyze how these alternative arrangements allocate people in space and time.

La courMicheal (2006) examined the home purchase mortgage product preferences of LMI households.
Objectives of his study were to analysis the factors that determined their choice of mortgage product. The
role pricing and product substitution play in this segment of the market and to verify whether results vary
when loans are originated through mortgage brokers. In this case regression analysis has been used and
results have shown that high interest risk reduces loan value.
Dr. Rangarajan C. (2001) said that the financial system of India built a vast network of financial
institutions and markets over times and the sector is dominated by banking sector which accounts for
about two-third of the assets of organized financial sector.