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Commentary

LinkFest #7: Inflation, Home Loans and Loads

Read Home Loan agreements before signing (Rediff)
The three authors of this fantastic article tell you important gotchas about Home Loans – the fine print of the agreement is pitched against you. Be it reset clauses on fixed rate loans, ambiguous and aggressive definition of “defaulters” or simply by removing your negotiating power with the builder by directly giving them money, home loan documentation is set up to work against you. Obviously, coming from the financer, this is expected, but you can object and get certain clauses altered or in some cases, removed.

Will you sign a document, quoted as from Citibank, which has: “The bank shall at its sole discretion alter the terms of this agreement by written intimation sent to the borrower by courier. Any amendment proposed by the borrower shall be valid only if made by a written agreement signed by both the parties.”. No changes by sole discretion to ANY agreement can be allowed – that’s equivalent to signing a blank cheque.

Inflation surges to 6.12% (Economic Times)
Inflation this week has moved up to 6.12%. This is very high and will be of serious concern in the Finance Ministry and the RBI. Now you can surely expect a rate hike in the next RBI meeting on Jan 31 – this may adversely affect banks, real estate development companies and companies where debt is very high.

Load Factor (Value Research Online)
Never understood what an Entry Load or Exit Load is? Look here for a fairly comprehensive understanding of loads. What the author missed here was information about what funds are truly no-load, the Vanguard kind that revolutionised the mutual fund industry in the US. Answer: None. Nearly every single fund we know has a load, either on entry or exit.

Earlier Linkfests: 1, 2, 3, 4, 5, 6

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