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Thursday, April 25, 2024

Types of Home Loan 

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Banks and other residential financial institutions now provide many forms of house loans. The need for house loans has risen dramatically in recent years, and individuals have varying expectations with regard to home loans. To meet the needs of various parts of society, several banks have devised the idea of launching various home loan packages. Many banks offer particularly designed house loans for women, farmers, and mortgages just for the acquisition of the land.

Types of Home Loan 

Banks provide home loans for a number of reasons, including the purchase of a property. Among the most common forms of house loans on the market are:

Financing for Land Acquisition

Many banks provide loans for the acquisition of land. Buying land is a versatile alternative; the buyer may save money and build a residence anytime their circumstances permit, or he can keep the land as an asset. Banks will lend up to 85 percent of the value of the land.

Home Purchase Loans

The loan for the purchase of a new or used house is the most common sort of home loan. This credit is also easily obtainable and is provided by several banks in various forms. The rate of interest could be either flexible or fixed, and it typically runs between 9.85 percent and 11.25 percent. Some banks also provide loans for up to 85% of the total value.

Loans for Home Construction

This financing is specifically designed for persons who desire to build their own home rather than buy a pre-built property. The approval process for this sort of loan is unique in that it considers the cost of the land as well. When applying for a house construction loan, the most crucial requirement is that the plot is acquired within a year in order for the plot cost to be included in the loan amount. The loan amount is determined using an estimate of the building cost.

Loans for House Expansion or Extension

Many banks also provide loans for a residence extension, which includes alterations to the existing building and the building of new areas.

Loans for Home Conversion

Those who have previously taken out a home loan and bought a home with it but wish to relocate could use home conversion financing. The borrower may finance the cost of a new property while without having to reimburse the prior home loan by converting the present loan to a new residence. While it is convenient, this type of house loan is also highly pricey.

Home Improvement Loans

External and internal repairs, repainting, the building of overhead water holding tanks, and wiring refurbishment will all improve the appearance of your home. If you don’t have the money for repairs and renovations, banks offer special home renovation financing.

Home Loans with Balance Transfer

Such an option exists whenever a person wishes to convert his house loan from one institution to another for reasons such as reduced interest rates or greater services provided by other banks. This is done to settle the outstanding debt at the other bank’s updated, lower rates.

Home Loans for Non-Resident Indians

The procedures and application process for such a type of credit are distinct from others since it is specifically created to aid non-resident Indians in purchasing residential real estate in India. Many commercial and public banks provide NRI financing as part of their home loan portfolio.

Bridged Loan

Bridged Loans are short-term loans meant for current house owners looking to acquire a new house. It assists homeowners in financing the acquisition of a new home till a buyer for the previous home is found. This sort of loan often needs a bank mortgage on a new home and is for a period of fewer than two years. Bridged loans are available from several banking institutions.

Loans for Stamp Duty

Stamp duty loans, a relatively unknown type of house loan, are available to offset stamp duty expenses incurred after the acquisition of a home.

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