Home Loans Home Loan Types of Home Loans

Types of Home Loans

98
6
SHARE
Types of Home Loans

Which Are The Different Types Of Home Loans?

The most popular and advantageous way of buying your dream house is availing a home loan. Now-a-days, many people are applying for home loans. They are interested in buying residential properties for residing or for investing. The types of home loans include home purchase loan land purchase loan, home construction loan, home renovation loans and so on.

Home loans are featured with different benefits such as tax benefits. Banks and financial institutions provide various types of home loans according to the requirements of customers. There is no single type of loan. Home loans are of different types like for purchase of open loan or for renovation. Let us discuss following types of home loans.

Home Purchase Loans

These are the most commonly found home loans. This loan can be availed for purchasing new residential property or a used one. You can obtain this loan on fixed or floating interest rates. Thus, these are also known as hybrid loans. These loans are provided by all banks and financial institutions.

Land Purchase Loans

These loans are availed for purchasing open plot of land so that you can construct a house on it as per your preferences. You also have the opportunity of buying this land for investment purpose. Most of the leading banks of the country provide these loans and up to 85 percent of the price of land.

Home Construction Loans

With this loan assistance, you can build a house according to your desires. Please note that the home construction loan is different from that of land purchase loan. Land purchase loan provides loan only for the purpose of buying land. It is up to you whether you want to construct a house or invest it for long-term gains. You cannot build a house with land purchase loan. The construction of house on the land can be done with home construction loans. Before applying for this loan, you need to buy land one year prior. For application purpose, a rough estimate of the house construction needs to be submitted to the bank. Many leading banks provide this kind of loan facility.

Home Extension Loans

As the name suggests, this loan is given to the applicant for extending the house. Extension of house refers to including a balcony, adding a new room or a complete floor. But for approval of this loan, prior approval is needed for such extension from concerned authorities.

Home Improvement Loans

You already own house but cannot decorate it beautifully due to shortage of funds. For this purpose, you can opt for home improvement loans. Home improvement or renovation includes painting, flooring, repair works and does not include purchase of furniture or consumer durable goods.

Home Conversion Loans

You have already taken loan for your house but want to shift to new house. Then, you can transfer the existing loan and purchase the new house. You are not required to repay the previous loan.

Conclusively, as per your dynamic needs, banks are providing different types of home loans. You must be familiar with this type of loans before applying. With sufficient knowledge, you can select the most appropriate home loan.

6 COMMENTS

  1. The above listed home loans are best in there own way. I didn’t knew about the land loan and home conversion loan. Many people are benefited from this and also are fulfilling there dreams of having there own home. More loan schemes should be introduced by the bank with low interest rates so that below average income earners can also have a house of there own.

  2. It is great that these days financial bodies are providing loan for expanding home. I was planning to construct a room and a bathroom on my open terrace but I was not able to plan due to lack of fund. Since my builder is ready to approve for extension, I can now realize my dream. I already have loan on the same home and now I will inquire bank to pass loan for the extension. Thanks for such a wonderful information!

  3. This article, truly is a guide for every reader. It very precisely yet effectively describes the types of home loans. One may not be knowing about loans provided for basic things such as renovation,flooring,repair etc. It compiles all the home loans from the pre-construction to post-construction of a home and it’s maintenance as well. It is really an informative piece!!

  4. This is truly an eye opening article. I had an illusion that home loans were just confined to purchase or build a new home from a third party. After reading this article I realized that one can go for a home loan for buying a land, renovating the existing home and to shift to a new house as well.

  5. There are so many types of home loans available it is very overwhelming if you’re going to buy a new house, or build a new house, or even renovate your current house so it seems new.
    It’s nice to be able to go to the bank armed with a bit of knowledge about which type of loan you want – then maybe you can get a better deal. You can save a bit more money and make your own life easier… plus the other articles on here about how to get a home loan and homes loans for low income earners have REALLY made my life easier!

  6. Home loans for all the various needs is always appreciated and popular. Home loans are itself popular cause of the tax exemption associated with it. The various types like land purchase loan, construction loan, renovation loan,extension loan to name

Comments are closed.