In our country the demand for home loans has seen an increased and huge manifold over the last decade. Every day, there are numerous people applying for home loans in order to own the dream nook for them. The fact that home loans come with added advantages (such as income and normal tax benefits) is the cherry on the cream.
Banking institutions and banks, to be categorized as one group; lenders, do provide home loans but not only for buying houses, but also for a variety of house related purposes.
The housing loan market is brimming with diverse home loan products which cater to different needs of individual borrowers.
Listed herewith and keeping in accordance with the titular topic, are some popular types of home loans available in the India.
Land purchasing loans
Land purchasing loans are taken when to buy a plot of land on which a borrower wishes to construct their house. Most banks offer up to 85% of the price of the land. These types of loans can be availed for residential purposes along with investment purposes as well. Almost all the leading banks operating in this country offer this loan, such as ICICI Bank (land loan), Axis bank (loan for land purchase) and so
Home purchasing loans
The home purchasing loans are the premier type of home loans offered and availed. Also, the most popular and the most commonly available home loan variants. This can be used to finance the buying of a new residential property or even a leased property.
In this type of loan, lenders also usually finance approximately 85% of the price of the house. These loans are provided either on fixed interest rates, or on floating interest rates or as hybrid loans on schemes. All banking institutions and housing finance companies do provide customers with this type of housing loan.
Home construction loans
These loans can be availed by those individuals who wish to construct a house according to their wishes rather than purchasing a house that is pre constructed. The loan application and approval process for house construction loans are somewhat different from that of the commonly available housing loans, such as the second type mentioned above. The plot of land on which the home loan taker wishes to construct the house should be purchased within a year for the cost of the land to be included as a component for calculating the total market value of the house. The loan amount may be disbursed at one go or in several installments as per the progress of the construction of the house. In India, specifically, Canara Bank, UCO Bank and Bank of Baroda provide these types of loans. Click here to read about loan for home construction.
Home expansion loans
Home expansion loans are very useful in situations when people already having a home wish to expand their existing house for their convenience and needs. Expansion includes alteration in the current structure of the residence to add extra space such as constructing a new room, a floor, a bigger bathroom or enclosing a balcony. Though many banks provide loans for these purposes as part of home expansion loans, some banks give loans for the same purposes as part of their home improvement loans. However it all depends on how a bank categorizes its loans. Some popular banks in India which readily provide home expansion loans are HDFC Bank and Bank of Baroda.
Home improvement loans
This is a follow up to the previous point.
Home improvement loans are generally taken by individuals who already own a house but do not have enough funds to renovate it as per their choice. All kinds of renovations and repair works can be financed using this variant of home loans such as internal and external painting, external repair works, electrical work, water-proofing and construction of underground or overhead water tank, and so on.
ICICI Bank, Vijaya Bank and Union Bank of India are among those banks that provide specialized home improvement loans in this country.
Home conversion loans
For those borrowers who have already purchased a house by taking a home loan but now want to buy and move to another house opt for the home conversion loans. Through these loans, the above-mentioned type of loan takers can easily fund the purchase of the new house by transferring the current loan to the new house. There is no need to repay the loan on the previous home.
Balance transfer loans
Balance transfer option can be availed when an individual wants to transfer his home loan from one bank to another bank. This is usually done to repay the remaining amount of loan at lower interest rates or when a customer is unhappy with the services provided by his existing loan lender and wishes to change to another banking institution in order to pay off their taken housing loan more conveniently and perhaps save some interest money. Operating banks in India such as Deutsche Bank, ICICI Bank, Kotak Mahindra Bank are known to readily offer this facility.
NRI housing loans
NRI housing loans is a very technically specialized home loan variant which has been developed to assist non-resident Indians in acquiring housing finance to buy residential property in India. These loans are meant exclusively and solely for all the non-resident Indians, whatever their country of habitat and occupation, currently.
The formalities of availing this segment of home loans is similar to the regular home loans which are offered to residents, only the paperwork is a bit more detailed and illustrated. Click here to read about home loan for NRI’s.
Stamp duty loans
Stamp duty loans are provided in order to pay off the stamp duty charges on the purchase of a property. The amount from this loan can be used only for this purpose. However, this type of home loans has yet not gained much popularity in the Indian markets.
Bridge loans are short term loans especially meant for people who already own a residential property but are planning to buy a new house. It helps borrowers to fund the purchase of the new house until a buyer is identified for their old house.
It can be stretched on for a period of less than two years and requires the mortgage of the new house with the lender. Some banks offering this type of loan are Vijaya Bank, HDFC Bank operating in the Indian markets.
We hope this information will help you for different purpose to get your dream home.
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