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Home loans are a handy respite for most prospective home buyers. When it comes to home loans, both national or private banks and non-banking financial companies in India offer a variety of options. The number of options is based on the different types of home loans available for individuals. And to know which home loan would be best for you, you would need to understand each type of loan.
Here’s a quick run-through of the different types of home loan:
A home purchase loan is a standard loan that banks offer to help people buy a residential property, which includes flats, bungalows, and row houses. Banks generally offer 80-90 percent of the current value of the property after considering the home loan eligibility of the applicant.
For this type of loan, you need to own a piece of land on which you wish to construct a house. Banks have a more tailored loan application process for a home construction loan, and it requires that:
Considering the above, banks approve the loan amount based on the estimated construction cost.
If you want to extend your existing house by adding more space, you can do it by applying for an extension loan.
With various types of home loans on offer, an individual can be rest assured that they get to choose a product that will best suit their needs.
With this type of loan, you can undertake a major renovation of your house. Some of the renovation works include serious repairs to the roofing and walls, painting, electrical wiring, digging a bore well, and so on. Among the types of home loans, some banks consider both the extension and improvement loans as one product.
This type of loan is used by an individual who wants to transfer the loan balance to another lending bank from the present bank or non-banking financial institution. The prime reasons for opting for this loan are to avail an interest rate lower than the existing one and to get a top-up loan. The approval of this type of loan depends on your credit score and other factors.
Non-resident Indians can choose an NRI home loan for a renovation of a property or construction of a home in India. The eligibility criteria include documentation involving overseas residential proof, a general power of attorney, and others, along with the typical documents needed for a regular home loan.
With this loan, you can purchase a piece of land or plot as an investment or for construction.
This type of loan is offered to more than one person, and it is repaid with equal financial responsibility. A joint home loan is generally applied by spouses, siblings, and parents.
With various types of home loan on offer, an individual can be rest assured that they get to choose a product that will best suit their needs. To know more about how you can avail of a home loan with IDFC FIRST Bank, click here.
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