Home is one of the basic needs of human being. Although they might be staying with their parents, siblings or joint family at some point of time in life especially when they are on the verge to get married, they feel the need to buy their own abode. It is the place where one also feels safe, protected and one creates their own sweet memories over the time. Lucky are the ones who are financially capable of buying their own home. However, a major chunk of the population in India still cannot deal in full cash to buy their own house. Either they are stuck with prior financial commitments or their little savings are too short to bridge the gap between their housing needs and inflation costs. The prices of houses are soaring up day by day and reaching skyrocketing high. Home loan is thus one of the best options for those people who cherish a dream like this and want to have their own house. There are several types of home loans which can be availed by different banks. These finances apart from helping you purchase your house provide a major benefit that is relaxation in your taxes. Apart from this when you own a home you feel more financially stable and emotionally stronger than before.
Here is a look at various kinds of home loans available in India:
New/Resale home loan
The new home loan is the most common and popular forms of housing finance. People avail loan to purchase a fully constructed or resale property. The maximum tenure to avail this would be 25-30 years. While going for these loan interest rates play a major role. There are fixed, floating or combo-interest rates for your housing finance.
Construction loan
Some people who wish to construct their own dream home instead of going for a ready flat or any housing colony by some builder can apply for a construction loan. They are somewhat different from other home loans as lenders don't give the land purchase price. So, an advice goes for the construction loan if you have your own land. Disbursement is done at construction levels and in installments. You can enjoy tax benefits once it's fully constructed.
Land Purchase loan
People purchase land and after that, they will start constructing their own home. So, if you're planning to do so and don't have sufficient money you can go for the land purchase loan. Ideally, banks or non-banking finance companies will sanction 80% of the net worth of the land and you will need to pay the rest 15-20% of the margin money. Researchers say people in villages or small towns are willingly going for this loan.
Extension & Renovation loans
A beautifully designed house brings more positivity and confidence. Many times while purchasing a home or constructing it because of lack of funds you construct a house which your pockets permit but later you feel the need to extend it at some point of time or maybe renovate with new and trendy interiors so for that you can go with a home extension and renovation loan. Usually tenure period of this loan is around 15-20 years and one of the main advantages is that the interest rate is tax-free.
Bridge Loans
These are loans for a short period of time which is around 2 to 24 months. It is used to fill the financial gap when the customer is going for a new loan for the new property. The tenure is less but the interest rate is quite high for this loan. It's more a less a kind of financial support till the time they go for a new loan. So while he arranges for the new loan this will prove to be an easy breathtaking.