Buying a house is not just a dream; it is a dream bigger than anything for the common man. Has it become easier and more accessible to get a home loan lately? Without a doubt, it has. This is due to the easy home loan options offered by banks and NBFCs. The question here is not whether you can get a home loan, right? It is whether you are getting the right kind of home loan.
Everyone wants to have a home of their own. In order to top that list, it is the best form of long-term investment too. However, if you are confused about applying for a home loan, we are here to answer all those queries, and you are good to go into getting that home loan.
Things to Ask Yourself Before Planning to Apply for a Home Loan
- Have you considered using a home loan EMI calculator?
- What is your current debt? Can you handle another huge one?
- Do you have enough to spend each month on other expenses?
- Can You buy what you need each month after paying your home loan EMI?
If the answer to these questions is positive, you do not have to worry about a lot; just get into it.
Don’t you want to know the different kinds of home loans available before you get one? Let’s learn about them.
What are the Different Kinds of Home Loans in India?
The various kinds of home loans available in India are:
1. Home Purchase Loans
This is one of the most common types of home loans, and it is offered to the individuals who buy a new, or even a pre-owned residential property.
2. Home Improvement Loans
Home improvement loans are designed so that people who are looking forward to repairing or renovating their existing houses can take advantage of them. This form of home loan also includes different types of remodelling, repairs, and improvements.
3. Construction Loans
These construction loans are given to individuals who want to construct a house on land that they already own. The funds are usually disbursed in stages according to the progress of the construction.
4. Land Purchase Loans
Land purchase loans are given to individuals who want to buy land for residential construction. These loans are suitable for those who want to build a house on the purchased land.
5. Home Extension Loans
These are home loans issued for individuals who wish to extend their existing houses with additional rooms or floors.
6. Home Loans for NRI
Non-resident Indians could get home loans in India, too. Yes, it might be surprising, but it is true. They can buy property in India, and the terms and conditions would differ a little based on the particular needs of the NRI.
7. Balance Transfer Home Loans
Home loan borrowers who already have a running home loan can transfer the remaining principal amount to another lender who offers him/her a lower rate of interest. This would help you lower the overall interest burden.
8. Top-Up Home Loans
A top-up loan is an additional amount of home loan that you could get on your existing home loan. It could be utilized for personal or even professional purposes, including renovation, education, and medical expenses.
9. Reverse Mortgage Loans
Banks have designed this form of home loan specifically for senior citizens. Reverse mortgage loans let homeowners convert a portion of their equity in their homes to cash. The bank offers periodic payments to the homeowner, allowing them to use their property for their financial needs.
10. Bridge Loans
Bridge loans are short-term loans that help bridge financial gaps between the sale of an old property and the purchase of a new one. These loans are usually for a very short period of time and carry a higher rate of interest.
11. Pradhan Mantri Awas Yojana
Under the Indian Government schemes, several subsidies are offered for home loans to make housing much more affordable for everyone. The Pradhan Mantri Awas Yojana is a scheme that targets the economically weaker sections of the country.
Every kind of home loan has its own rules of eligibility criteria, rates of interest, tenure, terms and conditions and more. We cannot tell you which scheme is the best scheme for you; instead – we can tell you to understand your needs and shortlist a scheme that suits you the best.
What are the Perks of Taking Up a Home Loan?
Applying for a home loan has some advantages. Do you want to know them? Read on!
1. They come with tax benefits: Home loans offer significant tax benefits under various sections of the Income Tax Act of 1961. These sections include 80C, Section 24(b), and Section 80EEA.
2. It has affordable interest rates: Home loan interest rates in India are known to be much lower than other kinds of loan interest rates, especially when you are looking into a personal loan or credit.
3. Balance transfer option: Through home loans, you can make balance transfers to another lender willing to offer you a much cheaper interest rate with better terms and conditions.
4. Longer repayment tenure: Home loans have a longer repayment tenure, often extending for 30 years. This helps you pay off your loan slowly and steadily.
Conclusion
What is the big wait now that you know home loans so well? Go ahead and make that big purchase. Buy yourself something you have always wanted —a home.