Owning a home is a fond dream for every Indian citizen. Hunting for a house that fits within their budget, buying a plot and constructing the house according to their own plan, buying resale homes – whatever the purpose, a Home Loan is the basic requirement to fulfil their dream.
Let’s take a look at the different types of Home Loans in india.
Land Purchase Loans
These are loans taken to buy a plot of land to construct your own house. These loans can also be used to buy a land for investment purposes rather than house construction. You can get upto 85% of the land cost as loan, and the loan tenure can be up to 15 years. There are no tax benefits attached to this type of Home Loan.
Home Purchase Loan
This is the most common type of Home Loan. You apply for this loan to buy an under-construction, ready-to-occupy, or a resale house. Here too, upto 85% of the cost can be sanctioned as loan. The tenure for these loans can be as long as 30 years. There are many tax benefits that you can avail on this type of loan. These Home Loans can be availed on either fixed or floating rates of interest.
Home Construction Loan
This type of loan differs a little from regular Home Loans. Along with the basic documents required for Home Loan, you need to submit papers relating to your plot of land on which you want to construct the house. This land should have been purchased within the previous year for its cost to be included in the overall construction cost. If the land has been purchased more than a year ago, its cost would not be included in the loan. You also need to submit a plan for the house and a rough estimate of the cost of construction.
Home Expansion Loans
You can get around 70 to 80% of the estimated cost for the new additions to your home as loan, either on a fixed rate or on a floating rate of interest.
Home Improvement Loan
You apply for this type of loan when you want to renovate your house, carry out repairs, paint work, electrical or plumbing work and other forms of home improvement work to make your house more comfortable to live in.
NRI Home Loans
These are loans extended to NRIs to buy residential property in India. This type requires more paperwork and processing than regular Home Loan.
Balance Transfer Loans
You can transfer your Home Loan to another lender either for better customer service, lower interest rate, or willingness to provide you with certain facilities like restructuring your loan or offering top ups on Home Loan.