Must-Known Facts About Different Types of Home Loans Available in India
Buying a home is a dream come true for most Indians and especially the young and ambitious generation. Securing a high pay job takes time, and so does the task of buying a home. Thus, there exists a hack to the problem. Apply for home loan through research and understanding to manage the expenses. Numerous people are afraid of loans, but a detailed analysis and proper planning will not only get you a home loan but the possibility to take further loans at lower interest rates by earning a high CIBIL score. Here is a guide to familiarize you with the types of home loans available for Indians and Non-residential Indians.
Facts about Types of Home Loans
Banks and lenders offer home loans depending on the use. Apply for a home loan to purchase the land or home, renovation, expansion, or construct the home.
- Land Loan
Land purchases can be intended for constructing the desired architectural homes or as a long-term investment. Up to 18 to 65-year-olds can apply for home loan irrespective of their employment status. Axis bank provides around 85% of the land cost. The home loan interest rate for the plot lies around 7.55 to 12.48%.
- Purchase Home Loan
It can be used to buy a new or pre-owned home with a loan covering up to 85% of the cost. The home loan interest rates can be flexible or fixed, ranging between 9.85 to 11.25%. The applicant must be salaried or self-employed and aged between 18 to 65 years. Self-employed should have 750 above credit limit, while salaried should hold experience.
- Construction Home Loan
Applicants who plan to construct a home after buying a plot fall in this category. The house-building loan provider considers the value of the land and the loan amount. The case is applicable only for lands bought within a year at the time of application. The complete sum or partial amounts are disbursed based on the approximate cost of building a home. Several famous banks offer construction loans based on experience to salaried individuals and credit scores to self-employed individuals. The home loan interest rate for construction ranges from a minimum value of 6.85% to a maximum value of 9.50%.
- Home extension and renovation loans
Applicants can apply for a home loan even if they plan to extend, renovate, remodel or expand it. The age group between 18 to 65 years can apply for a home loan based on salaried, professional, non-professional, and self-employed categories. Home loan interest rate for improvement ranges between 6.75 to 10.99%.
- Balance transfer home loan
Applicants can shift or apply for home loans at different banks or financial institutes. It allows them to switch to lower interest rates or better services for the remaining balance. The offer can be availed by above mentioned age groups and income sources.
- Bridge loans
These loans are intended for Non-residential Indians for fewer than two years. These facilitate buying a new home and holding it as a mortgage. The funding from selling a previous home can be used to repay the loan. The home loan interest rate for bridge loans varies yearly or may be the same. The rates vary but generally lie between 9 to 11%.
Conclusion
Home loans are available for both Indians and foreigners. Indians get a variety of loans concerning homes. Apply for a home loan for land, construction, renovation, or extension. The age group is generally common for all the categories. Banks and financial institutions offer flexibility in income sources and collateral requirements. With basic information on interest rates and types of loans, make suitable decisions depending upon the requirements.