India’s first mortgage guarantee firm aims to insure Rs 1,000 crore
India Mortgage Guarantee Corporation (IMGC), the country's first of its kind company, aims at insuring around Rs 1,000 crore of home loans in the next 12 months on the back of new tieups with banks and housing finance firms. "We will be able to insure around Rs 1,000 crore of home loans in the next 12 months based on our recent tie ups," said Amitava Mehra, chief executive officer, IMGC. The company, which insurers home loans between Rs 10 lakh to Rs 75 lakh, has have tied up with ICICI Bank, Diwan Housing Finance and Aditya Birla Housing Finance till now and is in talks with multiple public sector banks for tieups. Mortgage guarantee, also known as mortgage insurance in some parts of the world, is a product which compensates banks and housing finance companies for losses that may arise when a home owner defaults on a home loan. The product, if opted for with home loans, can help buyers increase affordability through a bigger loan. Sample this, a salaried individual with a monthly income of Rs 50,000, could in normal circumstances afford a home of Rs 33 lakh, with a loan to value (LTV) of 80%. However, the mortgage guarantee facilitates the individual to acquire a home with higher value of Rs 41 lakh.
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