Acquiring your ‘own home’ is a major milestone in one’s life. It requires a lot of planning as it has to be made keeping in mind everyone’s choice, preferences and requirements. Apart from this it is also a huge investment in terms of finances. The decision here is about the ‘what, when and how’ of allocation of the family’s financial resources. This is also where the question of taking a home loan comes into focus. A home loan is basically a loan offered against the security of a house/property which is funded by the bank. But these days lenders provide home loans not only for buying a house but also to ease off other related activities. The types of home loans available are,
- Home purchase loan: This is the most common home loan variant. This loan is suitable when you want to purchase a new residential property or buy an old house from its previous owners. In this case the lender finances upto 85% of the market value of the said house.
- Home construction loans: These loans are suitable for those who want to construct a house instead of buying an already constructed one. The procedure for application and approval of a construction loan is a little different from the other commonly available loans. An important component taken into consideration here is that a rough estimate of the cost of constructing the house has to be shared with the borrower. Only after this can the process of applying for the loan be initiated.
- Loan for Home Extension or expansion: There are times in which one wants to modify or extend his/her existing house. This refers to alterations in the existing structure of the house to add more space to the current residence, which could mean constructing a new room, a new floor, a bathroom or even extending or enclosing a balcony.
- Home improvement loans: This refers to loans that are executed for repair work in an existing house. It covers all internal and external repair and renovation work like painting, electrical work, plumbing etc.
- Home Conversion loans: In some cases one may have already financed and funded a home but may wish to move to another house and requires funding for the new house. This loan allows individuals to carry forward funds to the new house without having to repay any amount for the previous home.
- Land purchase loans: These loans are offered for the purchase of land on which the borrower wishes to construct his house. Lenders offer up to 85% of the value of the land.
Nowadays, applying for home loans has been made so much more convenient that you now have the option to apply for a home loan online or better still, run through the entire home loan process online. Each home loan financier offers you a user friendly interface and guidance on the type of home loan available to ensure a convenient experience. Some also offer options to customise your home loan plan as per your needs and requirements. Buying a home is a major investment in one’s life but it also means smart allocation of your financial resources. This is where home loans play a major role.