There are several housing finance schemes available in India; each meant for a specific purpose. It is recommended that you keep all the documents handy to prevent last-minute hassles.
When talking about home finance, one would think about a loan amount that is solely meant to buy a brand new home. However, that’s not always the case. Apart from offering standard home loans, financial institutions also let you opt for different types of financial schemes meant to fulfil other aspects of the home you already own. Below we discuss the types of housing finance in India:
Home Purchase Loan
This is the most common type and one that you are already aware of. As the name suggests, the loan allows an individual to purchase a brand new home. This can either be a newly constructed home or one that is being resold. Apart from merely offering the loan amount, some institutions may also assist you in choosing the most appropriate home.
Home Construction Loan
Several loan lenders also offer financial assistance to help you build your dream home on a plot of land you already own. However, keep in mind that the interest rate on home construction loans is usually higher compared to that on a standard home loan, as the process involves various risk factors.
Home Extension Loan
There are times when you plan to add up more space to your existing home. In this case, you may approach an institution that offers home extension loans. You may choose to add a bedroom, a reading room or simply an extended space based on your personal requirement. But, before you go ahead with the extension process, you need to seek the necessary permissions from the authorities.
Home Conversion Loan
You can avail the loan if you already own a house that you have purchased with a home loan, but intend to move to another home, which would possibly require some additional finances. In this case, the lender will simply transfer your existing loan to your new home by adding the extra amount. When opting for a home conversion loan, you don’t have to go through the paperwork all over again, as the lender already has all the necessary information required.
Land Purchase Loan
Chances are you already own a home, but wish to buy a piece of land. In this case, a land purchase loan would be the most appropriate financial solution. You may either buy the land for home construction or just as an investment.
NRI Home Loan
This loan scheme is meant for non-residential Indians who wish to buy a home in India. If you reside abroad you may be required to fulfil some additional formalities. Therefore, it is recommended that you thoroughly go through the terms and conditions set by the loan lender you intend to choose.
The ones listed above are just some of the major types of loans offered by financial institutions in India. However, numerous lenders also offer customized home finance schemes meant for purposes other than the ones mentioned in this article.