In this busy world, everyone dreams of their own home to settle in after a busy schedule. Buying a dream home has become a difficult task these days due to the climbing real-estate prices. An easy solution to funding your house purchase is a home loan. So it is not required to pay out your full savings for your home purchase.
In India Banks and other housing finance institutions are offering different types of home loans. The demand for Home Loan has increased in recent years and people have different requirements when it comes to a home loan. To cater the use of home loans to the requirements of different sections of society, a lot of banks and financial institutions started introducing different home loan schemes. If you are looking forward to purchasing your dream home amongst the best villas in Kottayam, several banks offer specially crafted home loans for women, agriculturalists, and senior citizens and loans exclusively for the purchase of land alone.
Types of Home Loans:
A home loan is the best option when you consider affordability and flexibility. Try to take a loan as per your requirement only. Check about the loan amount, Interest rate, Tenure and other value-added features. If you carefully consider this thing with your requirements then the home loans can be used wisely for your home purchase.
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Loans for Purchase of Land
Different public, and private sector banks and other financial institutions offer loans for land purchases alone. Purchasing land is much more a flexible option, the buyer can save funds and construct a house whenever his financial budget is sufficient. The land can be considered an investment option also. Up to 85% of the cost of the land can be availed as a loan.
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Loans for Home Purchase
The most popular type of home loan available in the market is the loan for the purchase of a new or a pre-owned home. This loan is also commonly available from almost all banks. The interest rate can be made either floating, fixed or hybrid. The interest rate generally ranges anywhere between 9.85% and 11.25%. Also, about 85% of the total amount is offered as a loan by many banks.
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Loans for Construction of a House
This loan is specially designed for people who wish to construct a house according to their requirements rather than buying a pre-constructed house. The approval process for this type of loan is different for it takes into account the cost of land also. The most critical clause behind purchasing a new home construction loan is that the plot must have been purchased within one year for the plot cost also to be included in the loan amount. The loan amount is decided based on a rough construction cost estimate. The amount can be settled at one time or in multiple instalments. Popular home construction loans with variant schemes are offered by Bank of Baroda, UCO Bank and Canara Bank. If the cost of the land is not included then an estimated cost of the construction of the house alone is calculated.
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House Expansion or Extension Loans
Do you need an extra bedroom, or workspace in your existing home and have a fund shortage, No worries, some banks also offer house expansion loans including alteration and modification of current structure and construction of new rooms. HDFC Home Extension loan and house renovation loan offered by Bank of Baroda is popular in this category.
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Home Conversion Loans
The loan amount can be transferred from the existing to a new home by choosing home conversion loans from the banks. Usually, People who have already availed of a home loan and have purchased a house with it but wish to move to a new house opt for this type of loan. By transferring the current loan to a new house, borrowers can fund the purchase of the new home. Though it offers convenience, this segment of home loans demands a high-interest rate
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Loans for Home Improvement
If you are short of enough finance for the repair of your house banks are now providing loans for home improvement. Both Internal and exterior repair works, painting, and electric and plumbing works can be done using this type of loan provided by the banks. Banks like Union Bank of India, and Vijaya Bank offer specialized home improvement loans.
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Home Loan Balance Transfer
If you have already taken a Home Loan, you have the option to switch to a different lender this is called a home loan balance transfer. Borrowers generally go for this option when they can get a Home Loan from a different lender at a lower interest rate.
But before transferring your Home Loan, do check about the processing fees and your current balance amount to make it profitable for you.
Pradhan Mantri Awas Yojana (PMAY)
- The PMAY, allows first-time homeowners to get Home Loans at subsidised interest rates. Through this scheme, you can save up to 2.67 lakh on the Home Loan. There are benefits like extended loan tenure of up to 20 years available under PMAY.
- Only specific banks registered under the PMAY scheme are eligible to offer this type of subsidised loan. If you are a first-time property owner and looking for a loan under PMAY, consider the bank that is registered under this PMAY scheme to avail of the benefit.
