Types of Home Loan
In India, there are many financial institutions and NBFCs that offer home loans for a variety of purposes. However, before finalizing any one of them, you need to understand all the available options to know which is the best one for you based upon your requirements. Here, we have listed several kinds of home loans that you may opt for-
Land purchase loans
Land purchase loans are taken to buy a plot of land on which you can construct your house. You can purchase the land with this loan when the property rates are low and carry out the construction whenever your finances allow. You may also purchase the land solely for investment purposes and sell it for a profit. Generally, financial institutions lend up to 80%-85% of the price of the plot.
Home purchase loans
A home-purchase loan amount can be taken to purchase a residential property either a house or flat. The maximum financing available for it is up to 85%-90% of the property value.
Home construction loans
This type of home loan is ideal if you want to construct a home according to your needs. There are certain aspects which you need to keep in mind while availing such loans such as:
- The land or plot on which the house needs to be constructed must be bought within a year.
- The borrower needs to make a rough estimate of the cost that will be incurred for the house construction.
- If the cost of the plot is not included in the loan amount, only the estimation of the house construction will be considered.
House extension or Home improvement loans
A home improvement loans can be used for remodeling, renovating, updating, or making repairs to your home. On the other hand, home extension loans can be taken when an individual wants to extend or add more space to his/her home. For example- adding a room as per growing family needs.
Home loans for Non-Resident Indians (NRIs)
These loans are specially designed to support the non-resident Indians in buying a residential property in India. The structure of this loan is like a regular housing loan. However, the documentation part is comparatively lengthy.
Home conversion loans
If you have taken a home loan but want to sell the home and purchase a new one in its place, you can apply for a home conversion loan. This way, you can purchase a new house without looking for a new lender. You can simply transfer your existing loan to the new house. The funds for the new house can be arranged by selling the existing house so that you do not have to worry about repaying the previous home loan.
Balance transfer home loans
Balance transfer home loans can be availed when you want to transfer your existing home loan from one financial institution to another owing to reasons such as the low-interest rate or better services.
Top-up loans
A top-up loan is a facility provided by financial institutions and housing finance companies that allows you to borrow a certain amount of money over and above your home loan.
Joint home loans
A joint home loan is a loan that is availed along with a co-applicant to increase eligibility and to share the financial burden equally. You can add any of the earning members from your family such as parents, spouse, or children as a co-applicant.
Home loans for Women
It is a home loan specially crafted for working women that helps them to financially empower and motivate them to buy their dream house. The loan amounts start at as low as Rs. 2 lakhs and goes up to Rs. 10 crores. These loans come up with low rate of interest and flexible repayment tenure ranging from 1 year to 30 years.
Plot Loans
Plot loans can be availed to buy a residential plot where you can build your dream home. They are provided at attractive interest rates and maximum repayment tenure of up to 25 years.
