The Types of Home Loans: A Guide for New Property Buyers in India

Posted by: Namrata Group
12th April, 2021
6,070

The foundation of your choice of a dream home is your budget. Most of the time, support for a home loan is a must. In this case, you should be aware and informed about the main types of home loans available in India. Here they are:

Types of Home Loans in India

1. Home Purchase Loan

To buy your dream home or residential property of your choice, you have to apply for a Home Purchase Loan; one of the popular types of home loans. Banks and financial institutions help you achieve your target. You can choose from three types of interest rates- fixed, floating or hybrid accompanied with the loan and buy your dream home (after the loan is approved).

Apart from banks and financial institutions, many real estate builders in Pune help their customers in choosing the right loan plan and the combined interest. They guide customers in choosing both the home and home loans that will benefit them and suit their best interest.

2. Land Purchase Loan

Similar to home purchase loans, banks or financial companies give land purchase loans to buy a plot of land for constructing a house or for any other purpose. Land purchase loan is approximately 80- 85% of the price of the land. If your income and credibility are sound, you can purchase as many plots as you choose.

Also Check: Residential NA Plots at Kamshet – New Lonavala, Pune

Also Check: 10 Step Process for Buying a Home – A Complete Guide (2021)

3. Home Construction Loan

If you want to build your home on the land owned or co-owned by you, Home Construction Loan comes in handy. The application and approval process of this loan differs from regular housing loans. However, to get your loan approved easily it is also important to know the estimated cost of the entire building process helps.

4. Home Extension Loan

The purpose of Home Extension Loan is to provide financial assistance to those who want to extend or expand their existing home- bigger bedrooms, building more rooms, expanding bathrooms, and so on. This is also given as a part of Home Improvement Loans which are given for renovation such as new flooring, electricity works, etc.

5. NRI Home Loans

NRI Home Loans allows NRIs (Non-Resident Indians) to get home loans while looking to invest in properties. However, there is a certain criterion to be fulfilled such as the minimum age of the loan applicant should be 24 and maximum is 60 ( it varies from one bank to another), at the time of loan maturity along with other factors that have to be kept in mind.

Considering the fact that using NRI Home loans are a great opportunity to invest in real estate, many real estate markets in India offer a great deal and high returns. A very good example of this is the Pune real estate market. As the real estate market here is growing exponentially, NRI investment in Pune will allow investors to yield high returns and value for money.

6. Composite Loan

The composite loan is nothing but a combination of a land loan and a construction loan. Also, known by the name, composite house loan, this will help you to buy a residential plot and build a house in it within a time frame.

Also Check: Important Things you should crosscheck Before Buying Property from any Company

Conclusion

Choosing to either buy a home, property, or build a home is in itself a very difficult and calculated decision to make. Once it is done it is very important to evaluate your financial situation and how you plan on buying or building the property. This is where home loans come into play as it is one of the easiest ways of fulfilling your dream easily. However, what is important is to know the right type of home loan you want to apply to and also the amount you want the bank to help with. To make better and wise decisions it is mandatory to consult a financial advisor or even the bank authorities before applying for any type of loan.