In this article I will be writing about the different types of home loans. If you take any product in the market, there will be multiple options to the customer. In home loans aswell depending on the needs, customer can choose the type of loans whether it can be home improvement loans, home loans, etc. This article will explore more about the types of home loans and the difference amoung them. In our previous articles we have covered many types of home loans, if suitable I will link back to the older article . I would like to hear feedback from you after reading the article. Please post it in the comments section. You can subscribe to our future articles here.
Home Improvement Loans
I have written a detailed article on the home improvement loans. Typically home improvement loans are used for extending the existing homes like constructing balcony, kitchen or even you can use that money to paint your house or beatification work. It will be just work like the home loans when in the home loans you will have to work with builders here the money goes to construction contractors. To avail the home improvement loans first you have to estimate the amount required for extending the house and then submit the plans to your financier(bank). They will be verifying with the constructors about your estimation and visit your home. Some banks will sanction the loan only if you submit the receipts of payment to the contractors. You can learn more about Tax Benefits on Home Improvement Loans. The following are coming under the home improvement loans:
- External repairs
- Tiling and flooring
- Internal and external painting
- Plumbing and electrical work
- Waterproofing and roofing
- Grills and aluminum windows
- Waterproofing on terrace
- Construction of underground/overhead water tank
- Paving of compound wall (with stone/tile/etc.)
Home Extension Loans
Home Extension Loan makes it convenient for you to extend or add space to your home. Be it an additional room, a larger bathroom, or even enclosing an open balcony. Some times the same applies to the home improvement loans. It depends on the bankers how they categorize the type of loans.
Short-term Bridging Loans
This kind of loans are taken while you are buying a new house by selling your old house. Some times you may take more time to sell your old house. In the interim period you can apply for this kind of loans to buy your dream home. Normally this kind of loans are given maximum of two years. As per the HDFC’s website, you can get the loans for 90% of the new property.
Land Purchasing Loans
If you wish to buy a plot of land, you can take this loan. You can get a loan for up to 85 per cent of the cost of land.Maximum term is 15 years subject to the retirement age.
Home equity loans
This is another way of seeking the loan. The loan amount can be used for any purposes other then illegal activities. For example if you have taken a home loan worth Rs.15 lacs for your new property, after some time the property value is increased and you have reduced the outstanding loan amount to Rs.5 lacs. This gives you chance for getting more loan amount for the same property as the security. Most people follow this approach to get the loan amount for the personal work like Mrriage,etc.
In this article I have written about the different types of home loans Home Improvement Loans, Home Extension Loans, Short-term Bridging Loans, Land Purchasing Loans. The type of the loans may vary on different banks. I have taken these details based on the HDFC bank’s home loans policies. But, most of the banks will have the same type of loans with minor differences. Thank you for reading the article!!!. I would like to answer your questions. Please post it in the comments section.