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Different types of Home Loans in India
Home loans are a step to convert your dream property into reality. There are many types of loans available in India. Investing in house is always a safe and smart move. The value of land always grows and thus appreciation for the investment can be visibly seen within few years. Below is a snapshot of these loans which are available in public and private banks.
The Home Purchase Loan: The most basic option which is used to buy a house, also called a housing loan. The customer can use this loan to purchase a newly constructed house or an existing residential property from the previous owner. Banks usually offer 80 to 85% of the market value of the property. This is available for different tenure periods and with fixed and floating interest rates.
The Home Improvement Loan: This type of loan is appropriate for getting all kinds of repair works done in a house that they own. Improvements, modifications, additions and renovation can be undertaken. For example- extending a room, making a new balcony, painting, flooring work, all kinds of plumbing or exterior elevation works are all covered.
The Home Construction Loan: These loans can be availed by those individuals who want to construct a house according to their wishes rather than purchasing an already constructed one. The home loan application and approval process for home construction loans are somewhat different from those of the commonly available housing loans.
The Home Conversion Loan: This type of loan is useful for people who have already taken a home loan and wish to buy another house for which they require certain additional funds. In these cases the bank provides a new home loan that covers the existing portion of the already availed home loan and some additional amount which can be used for buying the second home.
The Land Purchase Loan: These are loans provided in order to buy lands or plots. These are loans provided for either residential or housing and investment purpose. The banks offer up to 85% of the property value as loan when purchasing a land or plot. These loans are usually taken in order to build a house. Irrespective of how many house or land you have if you have income to repay and good credibility, you can apply for these type of loans.
The Bridge Loan: Bridge loans will help people to bridge the gap between an old and existing house with a newly purchased land. The loan provides the customer with the money to a new home until such time he is able to sell off his existing house. These types of loans are for not less than two years and require finance documents of the new property.
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