Owning life’s first home seems nothing less than a dream come true. However, anyone working hard to make a home must know the cost of making it. From choosing a significant design to buying budget items for the home, it takes a lot of patience and research. A Home Loan is a perfect assistance an individual can choose to avoid budget problems. The majority of houses in India are made through the Home Loan method.
Today, when the prices of properties in the real estate industry are rapidly growing, the construction cost of houses is also significantly growing. If you’re tight on budget, you can apply for a suitable Home Loan that covers all your needs at low-interest rates. When applying for a Home Loan, create a Home Loan documents file to save all necessary forms related to the applied loan.
Currently, several types of Home Loans are available in India. You can compare them according to your needs and choose the best one that suits your requirements based on your interests.
List of Various Types of Home Loans in India
Home loans are not only granted to borrowers for home building; they serve various other purposes such as renovation, improvement, extension, and many more.
Here are the various types of loans available in India-
Property Purchase Loan
The Property Purchase Loan is considered a regular Home Loan. It is distributed to those who are about to purchase a home, villa, bungalow, or any other property which is either constructed or in progress. It is the most commonly applied home loan insurance.
The interest rates for Property Purchase Loans are usually fixed, but if you have an excellent CIBIL score, you can find a cheaper interest-rate lender. Before the loan is distributed, check whether the loan is fixed or floating interest on self occupied property.
Property Construction Loan
If you are not interested in the pre-constructed property and wish to construct your home property construction loan is the best option. While applying for this loan, you’ll have to show your owned land where you wish to construct your home to the bank.
Whatever the loan amount you ask for, the bank will determine the cost based on your land and an approximate construction cost estimate. The amount of these type of loans are not distributed in a single transaction; instead, they distribute in a lump sum pattern.
Land Purchase Loan
The Land Purchase Loan is different from the home purchase loan. The land mortgage loan is a flexible loan where the lender offers flexible land purchasing options for constructing a home.
You can apply for the loan whenever you want; banks don’t interfere even if land prices are low or high. Once you purchase the land, you can start its construction whenever your financial condition approves. It doesn’t matter, even if you intend to keep the land as an investment and sell it for profit.
Home Expansion Loan
The Home Expansion Loan is a special loan to make additional alterations to the house. Unlike other loans, it doesn’t estimate the total cost of the house. Instead, It only estimates the cost of resizing rooms, new rooms, floors, etc.
According to the bank’s policy, you must submit your property documents for approval. With the house extension loan, you can change your house to a single-room flat, duplex, or any large design.
Home Improvement Loan
You can apply for a Home Improvement Loan if you already own a home that needs some improvements. The Home Improvement Loan covers such improvements as fixing leaking, painting, and electrical improvements.
Similarly, home improvements don’t come cheap in the house expansion process. Owners have to spend huge sums of money on remodelling their homes. Therefore, the home improvements loan can include all these upgrades and assist you in making your home as you like.
Banks and financial institutions have loans for every condition. It is up to the borrower to verify in which loan category they fall. In most cases, banks withhold the house documents and provide Home Loan documents. Once the loan is finished, you can ask your lender to hand over the reserved documents.