Some of the popular home loan types available freely with most banks and non-banking financial companies (NBFCs) include:
Home Purchase Loans
It is the most common type of home loans available for the purchase of a new house or apartment. Usually 80 to 85% of the market value of the property is provided in the form of a loan. Depending on each financial institution’s policies, the loan tenure period, interest rates and methodologies (fixed or floating) vary. It is generally inclusive of the cost of the flat, deposits and charges, stamp duty and registration fees.
Such loans are given for the purchase of land or empty plot for the purpose of residential activity, construction or investment. Lands loans are not available for buying an agricultural plot of land. Land loans offer a loan-to-value (LTV) ratio of up to 70% in most cases.
Home Improvement / Extension Loans
This type of loan is extended to support the costs of repairs, construction and renovations in your property. You could take a Home Improvement loan for constructing a new room or balcony or for taking care of your painting, flooring or plumbing expenses.
Bridge loans extend timely financial help for those who possess a property but don’t have the time to wait for someone to buy it before purchasing another one.
Balance Transfer is a facility offering the customer a choice to transfer the outstanding balance of the loan availed from the existing provider to another for better terms & conditions.
Top up Loan
In case you had already taken a home loan of Rs.55 lakhs, five years ago for a term of 15 years. The current outstanding on your loan is Rs.30 lakhs and you want to carry out major renovation in your house and are in need of financial assistance. You need not opt for a Personal Loan at high interest rates. You could choose a Top-Up Loan at lower interest rates with tax benefits, without asking for any additional security. There are however certain terms and conditions that must be met before taking such a loan.
Loans to NRIs
Almost all the major financial institutions extend financial assistance, subject to certain eligibility criteria to meet the special needs of NRI’s, who wish to purchase a house in India.