Finding the right home that suits your needs can be a difficult process. However, if you are thinking twice about the amount you will have to shell out, there are several home loans that could turn out to be saviours. There are even some tax benefits that you can reap. Getting a good home loan also requires you to have a stable financial backing and strong credit. Here are some types of home loans that you could take up to ease the process and buy your dream house in India a lot sooner!
Several national and private banks offer home loans in India, and you just have to pick the right one that seems the best option for you and your family. Here are some of the different types of home loans in India:
1. Home purchase loans
This is one of the quickest and hassle-free ways to fund your real estate dreams. By opting for a home purchase loan, you will be provided with 80-85% of the property’s market value as a loan amount. Some of the documents you will need include passport size photographs, identity proof, address proof and other financial documents. Your CIBIL score (the summary of your credit history) also plays an important role in getting your loan approved. A good credit score is usually considered to be one that is above 700. The creditworthiness of the person borrowing the loan plays an integral role in the loan being accepted.
2. Home Improvement Loans
If you are looking to renovate your home and bring in a brand-new look for your house, then a home improvement loan is a good option. It covers all aspects of renovation from a simple plumbing issue to a living room revamp and even remodelling. While applying for the loan, make sure you mention the specific need for the loan as it becomes easier for the lender to approve your application. The interest rates can vary from anywhere between 8% to 13% for some of the leading banks in India.
3. NRI Home Loans
If you are an NRI looking to purchase a property here, then these home loans are exactly what will help you purchase your dream home in India. Some of the documents needed to process this loan include a passport, work visa, address proof, NRE/NRO bank account statement for the last 6 months and more. Salaried NRIs need to show a minimum amount to prove that they are eligible for a home loan. For NRIs, a maximum loan to value amount of 85% has been imposed by the RBI. This, however, may differ based on the monthly income.
4. Home Construction Loans
If you are looking to construct a house on a plot owned by you or co-owned with someone else, then this loan is what you’ll have to keep in mind. You may want to construct your own house, as per your ideas and wishes. Worry not, for there’s a home loan specifically for this purpose as well. It also takes into consideration the cost of your plot. However, some of the rules you will have to keep in mind are:
- The plot must have been purchased within one year.
- A rough estimate of the total expenses for the house construction should be made.
- The plot’s cost must be specified in the loan amount. If it is not mentioned, then only the cost (an estimate) for the construction of the house will be considered.
5. Home-conversion Loans
If you have already borrowed loans to purchase a home, and now want to move to another new property, then a home-conversion loan should be your pick. When you are transferring the existing loan to a new house, you can easily buy your new home without having to repay the previous loan. Switching to a home conversion loan would be a great option for those who want to avoid paying high EMIs on another loan. Home loan conversion fees can range anywhere between 0.25% to 0.5% of the principal amount. Before choosing a home conversion loan, keep in mind the current interest rates, the outstanding loan amount from the previous loan, and any additional costs that may be incurred through the purchase of the new house. While this may be expensive, this home loan offers you a much more convenient option while moving to another new property. Here are some of the do’s and don’ts while buying a second home.
6. House Expansion Loans
If you are looking to extend or expand your living space and fit in another room, then here’s the loan you are looking for. These house expansion or extension loans are there to ease the process of altering your existing house or constructing something new in an existing space. This loan doesn’t require too many expenses, and the tenure provided is usually for 20 years.
Buying a home in India can be made a lot easier with these home loans that are made to make your journey to purchasing or moving into your new home more stress-free. Now that you have a glimpse of the type of loan you could choose, you can visit Casagrand and buy a new home. Whether it is 2BHK or 3BHK apartments or one with a wide range of facilities, Casagrand has some of the best apartments with the best facilities and prices on offer!