In this fast-paced world, it’s common for everyone to want a place where they can kick back after a long day of working hard and doing whatever they do in the world each day. However, these days, settling down comes with its challenges: what goes up must come down — especially when it concerns the property’s price! There are many different ways to fund your purchase beyond using your savings: getting a home loan is one of the options.
Unfortunately, buying land or a house has become increasingly difficult owing to the mounting real-estate prices. But there’s good news: even though financing your new home can be incredibly difficult and stressful to try and navigate without help, getting a home loan is an easy way to fund any number of plans you may have when it comes to buying your very own slice of the pie.
When buying a property, many factors must be considered, one of which is the loan you will have to take. If you’re looking to buy a house, you need to be well-informed about the home loan process in India. Here are five types of home loans you can choose from in India.
The Standard Home Loan
There are plenty of loan options for purchasing a home, but nothing tops the standard Home Loan. The standard Home Loan is a conventional loan designed to meet your housing needs. It enables you to borrow money from the lender to buy a property of your choice.
The reason why it’s so popular among buyers is that it gives them an option to repay the loan in monthly instalments and decide on how much of their hard-earned money they want to spend on the property by repaying a percentage at a time.
Additionally, suppose you’re financially capable enough. In that case, lenders can approve up to 80%-90% of the cost of the property as a Home Loan, providing eligible applicants with enough money for making down payments on properties before they go ahead and take out relevant loans.
The Home Construction Loan
It’s not uncommon for people to start with a home loan and then decide that they’d be more comfortable building their own home. While you can make this switch, it should be done with caution. To help facilitate the process, some lenders will offer a home construction loan.
These loans have similar monthly payments as regular loans but generally take longer to pay off because progress is made toward your new abode piece by piece. The loan amount approved depends on your estimated costs.
The Home Improvement Loan
Building, modifying, or renovating a home can be quite expensive. Fortunately, homeownership doesn’t always require hefty money in the bank to start. If you’re looking to extend your house, several types of loans could help.
If you already own a house but want to expand it by adding an extra room or flattening the floor, these loans are helpful as they mean you can get that extra space without making massive savings first! Similarly, if you have an existing home and want to renovate it, these loans provide a way to upgrade your home even if you don’t have lots of spare cash.
The Home Conversion Loan
Suppose you’ve previously taken out a loan and are putting your hard-earned money towards paying it back now. In that case, you might find that switching lenders might be the easiest way to secure a better interest rate alongside a more competitive repayment plan.
However, there’s something you need to keep in mind – namely, just how much these new home loan balance transfer options could potentially cost you. When comparing Home Loan rates between lenders, make sure you factor in other costs, such as application fees or processing fees, which will impact your bottom line overall!
The Home Top Up Loan
While taking a loan for your home, you can top it up with a fresh loan, which will be used for renovations and improvements to the property. A top-up loan is a type of additional financing that banks and other lenders sometimes provide to meet clients’ specific needs.
It’s similar to topping off your mobile phone’s battery when it gets low – when you take out an additional loan. You’re getting extra cash from the original loan that you borrowed. These loans are beneficial if you already have some form of debt outstanding but still need more money to cover the cost of a renovation or some other project.
Home loans are the most preferred loans in India. People want to live in a home of their own because society is getting competitive daily. Therefore, one must have a place of their own to survive in this competitive world.
The prospective home buyer needs to know about the different types of home loans and the home loan process that is available in the market.