We achieve one of the most significant milestones of our life the day we become home owners. But savings are not enough to purchase a home anymore. With the ever-rising property rates, the average middle class man has little choice but to purchase his dream home by taking out a loan. Thankfully, today it is possible to get financing for a wide range of loans for housing purposes, other than the actual purchase of the house. In fact, banks have even made it convenient for borrowers to apply for online home loans these days. Let’s take a look at the various types of loans you can get, to fulfil your housing needs.
The home purchase loan: Almost everyone who applies for any of the secondary loans related to housing (as mentioned below) starts off with a regular home purchase loan. Lenders make it possible for borrowers to purchase new or old properties; under construction or ready-to-move-in flats, apartments, villas etc., by granting this loan. The home purchase loan is also available for pre-owned properties. Lenders levy fixed or floating interest rates (based on the borrower’s preference) on this type of home loan.
The home construction loan: If you’d rather appoint your own builder to construct a customized home on a piece of land as opposed to purchasing a flat in a pre-constructed building, you can opt for a home construction loan. This type of housing loan allows you to construct the property the way you deem fit, so long as any refrain from any illegal construction. Home construction loans are ideal for people who prefer to construct properties like villas, bungalows, farm houses etc. In fact, you can even construct a multi-storey building on the plot of land.
The plot purchase loan: Now let’s say you wish to purchase a piece of land, with the intention of constructing a property on it a few years down the line; in such a case you can opt for housing finance to purchase a plot. However, bear in mind that lenders generally have certain terms and conditions associated with this kind of loan. For instance, you need to construct a property on the piece of land within a stipulated tenure provided by the lender. In fact, you can repay most of your plot purchase loan and take an add-on home construction loan to fulfil this requirement.
The home expansion loan: When you apply for home loan, you can also opt for a home expansion loan. This type of loan is ideal for people who wish to make any major changes to the structure on their property, but they need to be the legal owners of it. For instance, if you wish to convert two flats into one, expand your kitchen, add a balcony, a storage room or a wardrobe, and so on, you need a home expansion loan.
Home renovation loan: There comes a time when you find the need to remodel or renovate your home. With time, the wiring may become faulty, the ceiling may begin to leak and the paint may start to chip off. To meet with these expenses, you can take out a home renovation loan and complete the required repair and reconstruction work.
While you can choose from this wide range of home loans in India, you must remember that lenders levy different interest rates and provide different amounts of finances on these loans. Typically you can get up to 85% finance on home and plot purchase and construction loans, whereas the finance for renovation and expansion depends upon the estimated cost drawn up by the borrower.
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