We all dream of having a home where we can find our sense of identity and mental peace, and buying your own home is one of the biggest financial decisions you can make. But with the increased rates of real estate, not everyone can afford to buy a house these days.
However, being short of funds does not mean that you cannot fulfil your dream. You can still buy that flat, bungalow, apartment, or build your house without dipping into your savings or withdrawing investments by applying for a housing loan in India.
Home loans in India are the best way to buy your own home without straining your finances. The interest rates are low, and the loan repayment tenure can range from 2 to 20 years, allowing you to make payments and manage your finances well.
Types of home loans in India
There are different types of home loans in India that you can avail of. You will have to assess your needs and apply accordingly. Here are the different types of housing loans in India.
– Regular home loan
It is the most common type of home loan in India. You can apply for a regular home loan if you intend to purchase a flat, bungalow, or bungalow that is newly constructed or under construction. You can also purchase a pre-existing property through a regular home loan.
You must remember that you can only buy residential property with a regular home loan. The regular home loans can be obtained through fixed or floating interest rate, which is determined before the loan amount is disbursed.
– Home construction loan
You may not want to buy a pre-constructed home as you may want to customize the design based on your specifications. In that case, you will need to apply for a home construction loan that enables you to build your own home. The very first eligibility requirement to acquire a home construction loan is that you must own a plot.
Furthermore, if you wish to add the cost of the plot to your home loan, you will have to ensure that the plot is purchased within a year. The home loan amount is calculated based on the cost of the plot and the overall estimated cost of the land.
– Home expansion loan
There can be times when you want to make any alterations to your home’s current structure. You can apply for a home expansion loan to make alterations to your home. For instance, you can construct new rooms, add floors to your existing property. You must have permission from the housing authority to add new floors.
A home expansion loan also enables you to convert several rooms into a single large flat or construct a duplex. You can make any alterations as you please.
– Land purchase loan
It is another type of home loan in India offered by banks and NBFCs. The best part about it is that it provides you flexibility in purchasing a piece of land on which you can build your dream home. You should purchase a plot when the prices are low, and construction can be carried when you have the finances. A land purchase loan also allows you to use the land for commercial purposes.
– Home improvement loan
It is one of the most popular housing loans in India. Home improvement loans allow you to make necessary repairs to prepare for celebration or increase the value of your property. Whether you want to repaint your house or repair windows, doors, ceiling, or part of the roof, home improvement loans can cover the cost of modifications without compromising your finances.
– Home conversion loan
Home conversion loans are ideal for people who have an existing house with the desire to buy a new and bigger one in its place. You can opt for a home conversion loan to buy a new home without looking for a new lender by simply transferring the existing loan to the new house. You will need to sell the current home to arrange funds for the new house. Also, you can have mental peace as you do not have to repay the previous home loan.
To sum up
There are several housing loans in India specific to customers’ needs. You can opt for a loan based on your requirement, but know that you can get 85% of the insured declared value as a loan. You will need to pay the rest as a down payment