Different Types Of Home Loan

Types of home loan :

Home Purchase Loan

These are the basic home loans for the purchase of a dream home. These loans are given for purchase of a new or already built flat/bungalow/row-house. Home purchase loan is most popular variety among home loan product offered by the Financial institutions, even government encourages Loan seekers by giving tax incentive.

Home Improvement Loan

These loans are given for implementing repair works and renovations in a home that has already been purchased by the customer. It may be requested for external works like structural repairs, waterproofing or internal works like tiling and flooring, plumbing, electrical work, painting, etc. Generally people consider option of personal loan to do this kind of works, home improvement loans are lesser than personal loan interest rate.

Home Construction Loan

These loans are available for the construction of a new home. The documents required by the banks or bank for granting customer a home construction loans are slightly different from the home purchase loans. Depending upon the fact that when customer bought the land, the lending party would or would not include the land cost as a component, to value the total cost of the property. Some banks don’t deal with this type of loan.

Home Extension Loan

Home Extension Loans are given for expanding or extending an existing home. For example addition of an extra room, etc. For this kind of loan, customer needs to have requisite approvals from the relevant municipal corporation. However subject to technical valuation of the bank.

Land Purchase Loan

Land Purchase Loans are available for purchase of land for both home construction or investment purposes. Therefore, customer can be granted this loan even if customer is not planning to construct any building on it in the near future. However, customer has to complete construction within tenure of three years on the same land. only few banks in India offer this type of loan and sanctioned amount is based on title and location of the property.

Bridge Loan

Bridge Loans are designed for people who wish to sell the existing home and purchase another. The bridge loan helps finance the new home, until a buyer is found for the old home. This loans are short period in nature having a tenure of minimum 2 weeks to 24 months maximum.

Balance Transfer

Balance Transfer loans help customer to pay off an existing home loan and avail the option of a loan with a lower rate of interest. Customer can transfer the balance of the existing home loan to either the same banks or any another banks, people opt for these type of loan if they realize fact i.e. small change in interest will influence the burden of EMI’s to them. For more details check  "Cost of switching home loans to new lenders?"

Stamp Duty Loan

These loans are sanctioned to pay the stamp duty amount that needs to be paid on the purchase of property.

NRI Home Loan

This is a special home loan scheme for the Non-Resident Indians (NRI) who wish to build or buy a home or land property in India. They are offered attractive housing finance plans with suitable reimbursement options by many banks in the country.

If you plan your home loan well, you will be able to close it faster and your home will be fully yours.