The increasing price of residential housings and apartments has increased the demand for Home Loans in India. Home loans are the money borrowed from a bank to buy or modify a residential property. Any person who wants to buy a house can go for a home loan. When you decided to buy a property in the immediate future you can also apply for a loan before you decide on your property. The property you are going for should be pre-approved by the bank.The fact that home loans come with huge benefits like tax benefits feels like a cherry on top of your cup cake.
Here we would talk about some of the types of home loans and their pros and cons.
Land purchase loans are used to purchase a tract or plot of land on which the supplicant is planning to construct their home. Most banks offer up to 85 per cent of the price of the land.
The most popular home loan available in India is the home purchase loans. These loans can be used in the purchase of a brand new residential property or an old property from its previous owners.
Home construction loans can be used by the ones who want to construct an independent house. The tract of land on which the person wishes to construct the house should have been bought within a year of application of loan. A rough estimate of the cost for construction of the house should be calculated and then one should apply for the loan. The loan will then be analyzed and then sanctioned.
Home expansion or extension loans are useful for people who want to expand their current home. Expansion includes alteration in the existing structure of the home to add extra area to it. Home improvement loans are applied for renovation purposes.
Home conversion loans are used by the ones who already have a house with a home loan but now want to buy and shift to another house can go for the home conversion loans. With these loans they can fund the buying of the new house by transferring the existing loan to the new house. And there is no need to repay the loan on the earlier home.These are quite expensive though.
NRI home loans are home loans exclusively for the non-resident Indians.The formalities are similar to the normal home loans but the paper works are a bit detailed.
Stamp duty loans are provided to finish off the stamp duty charges on the purchase of the property. The finance from this loan can be used only for this purpose. These are not very popular.