You cannot always stay in a rented house and raise your family; getting home at a particular point becomes necessary. Moreover, if you consider settling down somewhere, you will need to buy a house. However, with the price of everything rising, owning a home is a big concern. Thus, knowing about housing loans is imperative.
There are indeed various types of home loans available in India. These loans are designed based on the requirements of an individual. Therefore, when you decide to borrow a chunk from a financial institution, it is wise to know the different types of housing loans.
A Brief Keynote on Housing Loans
A home or housing loan is a secured loan obtained to purchase a house or property. These types of loans are usually paid through an EMI, and once you pay, the property you have purchased will transfer to your name. Loan lenders provide multiple types of flexible repayment tenures. Its purpose is to make the loan more affordable to loan applicants.
You can opt for a payment tenure of 30 years to reduce the financial burden. Generally, all types of home loans are granted after thorough verification. Before seeking any home loan, it is best to analyse your budget and the monthly EMI you can afford. Hence, calculating EMIs in advance plays a crucial role. Get the loan from someone who has the shortest turnaround time.
Types of Housing Loans
With the need for a house skyrocketing, the demand for home loans has increased these days. Knowing about the four main types of housing loans offered by banks and other financial institutions will help you in the long run.
1. The land purchase loans
Many institutions provide loans so you can get a piece of land and build your own house. In that regard, you must know that purchasing land is an individual and flexible choice. You can consider building a house on that land or holding it as a long-term investment.
2. Home purchase loans
Housing loans for purchasing a home are the most common of the four kinds of loans. These loans are widely accessible and usually supplied by various financial institutions. The interest rate on home loans may vary between 9.85% and 11.25% daily. But, again, you can check with the financier before borrowing the amount.
3. Home construction loans
As the name suggests, these loans are usually designed for individuals who borrow money to construct a house. These home loans cater to individuals who prefer to avoid buying a pre-built house.
These loan patterns are specially designed to help you cope with the cost of the construction and building items. You also need to know that you can repay these loans within a tenure of thirty years, which makes them quite accessible.
4. Loans for home extensions
You can also take a housing loan for home extensions. These loans are usually appropriate for those considering making minor home modifications. For example, a home extension loan will be the right choice if you are considering extending a balcony or redecorating the porch but are short on money.
Why Consider Home Loans?
If you are considering getting a home loan, it is best to know why it is a good choice. Here are a few benefits of housing loans.
- Easy and flexible repayments: The repayment period of home loans is longer. Hence, you will find it relatively easy to cope with the repayment of home loans.
- You can have tax benefits: Once you get a home loan, you will become eligible for tax benefits. That will allow you to save a lot of money.
- Freedom to choose the rate of interest: It is a fact that home loans, at times, come with a floating rate of interest that allows you to choose the rate of interest. This gives you the freedom to select the rate of interest that will be easy for you to repay.
- Enhanced capital appreciation: Home loans help you get a property that becomes a lucrative investment over time. Thus, it makes it easy for an individual to be drawn to fixed assets.
Documents Required for Home Loans
There are certain documents you need to have to get a housing loan. A few documents that you will need to provide are:
- The loan application form
- A few passport-size photos
- One or two identity proofs
- The residence proof
- Bank account statement
- Property details documents
- Original salary certificate of the borrower
All these documents will be a significant deciding factor in the financial institution’s decision to grant you the loan.
Now that you have a clear idea about housing loans and their benefits, you should understand your needs. Please check with Piramal Finance to clear out your doubts about home loans. You are sure to get the best home loan-related assistance from Piramal Finance. They have an outstanding team of professionals to stand by your side throughout the process. Home finance needs are best fulfilled with the help of Piramal Finance.