This section is a guide that will help you to move through the home buying process with a better understanding of how the real estate industry works and how to be an informed consumer during this process.
Home Loans
Not many are aware about the types and variety of home loans available in India. They can be briefly classified into the categories mentioned below:
- Home Purchase Loans
- Land Loans
- Home Improvement Loans
- Bridge Loans
Home Purchase Loans
Commonly known as home loan or housing loan.
- These loans are provided for buying houses or apartments.
- They typically can vary from 80% to 90% based on the market value of the property.
- They are available for various periods and with fixed/floating interest rates.
Land Loans
They are available for purchase of land or empty plot for residential activity, construction or investment purpose.
- They are not available for buying any agricultural plot of land.
- Unlike home loans which offer a LTV(loan to value) ratio pertaining to 80 to 85% of the price of the property, land loans offer a LTV ratio of up to 70% in most cases.
Home Improvement Loans
They allow users to take care of their home renovation work.
- They are extended towards all construction and renovation work.
- Extending a room, making a new balcony, painting, flooring work, all kinds of plumbing or exterior elevation works are all covered under home improvement loans.
Bridge Home Loans
They are useful for people who sell their existing property and use the funds to upgrade their homes or buy a new home.
- It isn't essential to wait till the final sale execution of the existing property. Bridge home loan can be used to purchase the new home and repay the bank once the existing home is sold.
These loans types are popular and are freely available with most banks and non banking financial companies (NBFCs). So here was a snapshot of the basic types of Home Loans
