Signing up for a home loan? There are umpteen number of lenders or financial institutions in the home loan sector in India who are vying for the attention of home buyers.
Once you choose a leading or recognized lender, make a list of your specific requirements for a home loan by factoring in the interest rates, repayment period, etc.
Though many banks and financial institutions offer home loan schemes that are attractive in terms of transparency and flexibility, opting for the right loan will put the home buyers at ease.
Let us look at the different types of home loans available in our country.
Land-Purchase loan for buying a plot
Many among us invest in a land with a plan to construct a house on it. Those who aspire to buy a house in the future can rely on this piece of land as an investment. In the case of this type of loan, some of the lenders including ICICI Bank and Axis bank offer 85% of the cost of the land as a loan to the applicants.
Loans for purchasing a house
This loan facility is availed by those who want to purchase a new or a pre-owned home. This is a common loan that is available in different versions depending on the bank or financial institution that issues the same. Usually, 85% of the total amount of the property cost is granted as a loan.
The interest rates can be fixed or floating ranging from 9.85% to 11.25 %. If you are purchasing a new home from a builder, check for the options of availing interesting home loan offers especially if you are a first-time buyer. Reputed builders like Confident Group has tie-ups with leading banks including SBI if the buyer wishes to take a loan.
House-construction loan
Those who wish to construct their dream home according to their plans can apply for a house-construction loan. This type of loan demands a different approval process. This is because the loan amount should include the cost of the land or plot.
For this, the applicant should have bought the land within a year and should make a rough estimate of the cost that will be incurred for the construction of the house. The loan will be disbursed as a lump sum or multiple installments.
House extension loan
If you are considering to expand your home like extending your existing space for a bedroom or a car porch area, you can avail a home extension loan. Some of the banks offer this type of loan as a home improvement loan.
Home improvement loan
If you are renovating your home by carrying out works like plumbing, electrical wiring, painting, furnishing interiors, etc. a home-improvement loan is for you. You can avail specialized home-improvement loans from various banks for a period extending up to 15 years.
Home conversion loan
This loan is usually availed in a special case where people who already own a home and have used a home loan would like to move into a new house. A home-conversion loan helps the borrower to fund the purchase of his new home without repaying the previous home loan
It is indeed a convenient option for homebuyers who have previously opted for a home loan if they need to transfer their current loan to the new one. Usually, these loans are expensive.
NRI Home loans
NRI home loans are devised to address the requirements of non-resident Indians who are planning to invest in a residential property in India. The NRIs will follow a different set of formalities while applying for a home loan, unlike others.
Most of the private and public sector banks in India offer these loans which may have different tenure periods (20yrs- 30yrs) depending on the profession of the NRI applicant.
Balance transfer home loans
A balanced transfer home loan is the best for those who are looking to repay their home loans at a revised lower interest rate. This loan usually helps the borrower to transfer his home loan to a new bank that offers better services.
Bridged Loans
A bridging loan will be ideal for existing homeowners who want to avail a home loan for the purchase of a new property. The borrower can avail this type of loan until a buyer is identified for the existing property. Until then the new house should be mortgaged with the bank for a period extending less than 2 years.
Stamp Duty loans
Stamp duty loans can be availed for covering the stamp duty charges. It is very rarely used by borrowers and is usually for those who purchase high-end properties.
Conclusion
Evaluating all these types of loans before finalizing your choice would let you go through a hassle-free loan application process. Hope this article has given you an insight into the types of loans that you are looking for. The more you are aware of your requirements, the more confident you are about choosing a home loan.
Author’s Bio
Sreekanth Unnithan is a digital marketing expert at Webdura Technology. He enjoys experimenting with new techniques in both print and the web. He also loves to explore roads less traveled. Reach him at his email.
Author
-
by
-
