Different types of home loans that you should know about
Oct 04, 2017 Home Loan
Did you know that there is a different kind of home loans available in the market? The answer must be ‘No’. Several nationalise and private banks offer various kinds of loan. But you need to understand which one is best suited for you as per your requirement and then decide. So read through these different types of home loans:
1. Home loan: it is a regular loan that banks and other financial institution offer to purchase a residential property. banks usually offer about 80 to 85 percent of the property value as the home loan amount. The interest rates on the home loans are usually fixed, floating or hybrid.
2. Loan for purchasing land: this kind of loans is provided by NBFCs -Non Banking Financial Institutions or banks to purchase a land to construct a house on it. Here also the lending institutions offer about 80 to 85 percent of the land price as the loan amount.
3. Loan for home construction: if you want to construct a house then also you can take the loan from the financial institutions. Whether it is an owned or co-owned home, the lending institution offer loans in both the cases. However, the entire process from loan application to approval differ in certain terms in the case of a home construction loan, such as:
1. Home loan: it is a regular loan that banks and other financial institution offer to purchase a residential property. banks usually offer about 80 to 85 percent of the property value as the home loan amount. The interest rates on the home loans are usually fixed, floating or hybrid.
2. Loan for purchasing land: this kind of loans is provided by NBFCs -Non Banking Financial Institutions or banks to purchase a land to construct a house on it. Here also the lending institutions offer about 80 to 85 percent of the land price as the loan amount.
3. Loan for home construction: if you want to construct a house then also you can take the loan from the financial institutions. Whether it is an owned or co-owned home, the lending institution offer loans in both the cases. However, the entire process from loan application to approval differ in certain terms in the case of a home construction loan, such as:
- You should have bought the land within a year.
- You as a borrower need to prepare an estimate for the construction of the house.
- If you do not include the cost of the land then the estimated cost for the construction of the house is included in the loan amount.
4. Home-improvement loans: if you want to renovate your but lack funds then you can opt for home improvement loans. The aspects that are included in the renovation are painting walls, wiring, repairing the house and other works.
5. Loan for home extension: those who want to extend their existing home this loan is for them. Few the lending institutions differentiate this loan with the purpose of the house extension of the existing house. Many of the banks include this kind of loans in the home improvement loan only.
6. Home-conversion loans: those who have to plan another house but already have taken one home loan can opt for home conversion loan to biy a new house.
7. Home loans for NRI: NRI home loans are specially meant for those NRIs who plans to buy property in India, Although it is similar to the regular home loan, but the documentation and paper work is more exhaustive.
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