For most of us, buying a home we can call our own is a goal we wish to do our utmost to achieve. However, in today’s world, buying property is no easy task. While an array of schemes, rates, and offers are being advertised by financial institutions to induce prospective homebuyers, buyers need to make the right decision and choose the right type of home loan. The process begins with identifying the right kind of home loan and then going ahead judiciously.
While a certain type of loan seems beneficial to you, there might be others that will reap better rewards in the long run. That’s something you need to research well by studying different aspects of each loan type. Needless to say, it is strongly recommended that you familiarise yourself thoroughly with the facts before making a decision.
Different types of home loans in India
Home Purchase Loan
This is one of the most commonly known types of home loans that help you acquire a residential property. You can apply for this loan to buy an apartment, bungalow, a row house, etc. Different types of interest rates, viz.
- Fixed
- Floating
- Hybrid
are there you can choose from when you avail of this loan.
You need to arrange relevant documents, statements, and proof with identity proof, income proof, and address proof being some of them. You can choose the tenure of the home loan, which also determines the rate of interest you’ll pay.
Different institutions and even some real estate developers guide homebuyers to select the best plan as per their position.
Home Construction Loan
If you plan to have your home constructed as per your vision on the land you own (or own with someone), a home construction loan is what will be suitable for you.
This loan is in some ways different from a home purchase loan in terms of nature. Purchasing a ready-to-move-in home and getting a home built entail application and approval processes that are somewhat different. Nevertheless, you need to be aware of the relevant points of your purchase, including an estimate of your budget along with the expenditure you’ll be sustaining.
Home Extension Loan
Extending your home involves:
enhancing
renovating
expanding your existing home.
It also includes home makeover measures like painting, tiling, flooring, plastering, electricity work, and others. Armed with the requisite documents that include bank statements, appointment letters, income proof, identity proof, among others, you can easily avail of this loan to spruce up your abode without enduring complicated procedures and high-interest rates.
Suggested Read: Home Loan Interest Rates Further Reduced – What this means for Home Buyers
Land Purchase Loan
This loan is taken by individuals to purchase a plot of land to construct a home on or utilize it for some other purpose. With a stable income and good credibility, you can buy more than one plot if you wish with the help of this loan. Acquiring this loan is also relatively easy, which also allows you to buy resale land as well as a new plot. Further, formalities, paperwork, repayment of this loan, and other processes are similar to this loan as well.
NRI Home Loans
When it comes to loans that NRIs wish to avail of, the NRI Home Loans come in handy. This type of loan is usually taken by NRIs to invest in property. To avail of this loan, there are certain norms that the NRIs have to meet, which include documentation (e.g. passport and VISA copies), age limits, rate of interest to be paid, and others. NRI home loans offer attractive returns and value for money to the beneficiaries, which make them very popular and are availed commonly.
Composite Loan
As the term suggests, a composite loan is a combination of a plot loan and a construction loan. That means with this loan, you can purchase a home or construct one on it within the given time limit. With diligent processing and submission of requisite documents, this loan can be utilized optimally.
Also Read: All the Tips you Need to Get your Home Loan Approval Instantly
Conclusion
Based on the information shared above (coupled with some research and expert advice too) because of the existing scenario, you can opt for the one that suits you best and realize your cherished dream of owning your own abode.