Owning a home is a matter of pride. Each one of us dreams of becoming a home owner someday. But with the ever-rising rates of real-estate, many of us have to keep postponing our dream to own a home, simply because it is a huge investment. Thankfully, you can fulfil this dream of purchasing your perfect abode, simply by taking out a home loan. Just chose the type of loan that suits you best and approach a bank that offers the best interest rates and tenures. Here are the various types of home loans that you should be aware of.
Loans to purchase a home: This is the most common and the most popular type of home loan. You can take out a loan on a new or a pre-owned home. Most banks offer this loan in several different variants. The interest rates for such a home loan can be both, fixed or floating and typically ranges between 8% and 12%. Banks generally offer 85% of the total amount of the house as loan.
Loans to purchase a plot of land: Many Indian banks offer loans to borrowers wishing to purchase land. Through this flexible option, a buyer can take a housing loan to purchase a piece of land and construct a house on it whenever he has the finances for the same. Alternatively, he can use the piece of land to make any other investment of his choice. Nationalized Indian banks such as Bank of Baroda, SBI, Central Bank of India as well as private sector banks offer up-to 85% of the cost of land as loan amount.
Home construction loans: People who prefer to construct a house as opposed to purchasing a pre-constructed house may take out a home construction loan. The cost of the plot is also taken into account during the loan approval process. To ensure that the plot cost is included in your loan amount, you need to purchase the construction plot within a year. Banks may disburse the loan amount in multiple instalments or in a single instalment. For construction loans, applying for a Bank of Baroda housing loan is a great option.
Home improvement loans: As years go by, and as our home becomes older, we find the need to remodel or revamp it. It may need painting or repair; you may have to undertake electrical renovation or fix a leaky roof. All these things cost a lot of money. In such cases, you can apply for home loan to remodel your home. Taking out a home improvement loan can help you spend on necessary repairs and reconstruction.
Home expansion loans: When you decide to redo your home, you may wish to increase the number of rooms. You may want to add a balcony, a bedroom or even a bathroom. You may want to expand your kitchen or add a storage room. Whatever the case may be, a home expansion loan allows you to make all these structural changes.