Own house is everyone’s dream. There is no need of enough money in hands. Banks and NBFC agencies are giving loans easily. There are many types of loans.
Home purchase loans,
The loans for new build homes or buying old properties are called as home purchase loans. Not only home, purchasing of plots also come under this. Banks give 85% as loan for the value of that property at the time of purchase. But it varies depend on some conditions.
Home construction loans,
Plot is already available and planning a house on that will get this kind of loans.
Home extension and expansion loans,
These loans used to modification for home, and to build extra rooms or laying an extra floor.
Home improvement loans,
Loans for modernization of home and repairs.
Home conversion loans,
Already taken a home loan. But planning to buy a new home and change into it. Then the applied loan is called as conversion loan
Land purchase loans,
Land purchase loans are for buying plot and place. Many banks are giving 85% as loan for the total value of the plots.
Stamp duty loans,
If you are planning to buy a big place and home then need to pay high amount for stamp duty. Banks giving loans for the purpose of stamp duty.
Already have a home and willing to sale it but nobody available to buy it. At the same time other house is available for good price. Banks are providing bridge loans for this. This loan is in action from buying a new home to purchasing old one.
LTV ratio is loan percent of property value. Home loans can be 80-85% or some time up to 90%. For land loan only 70% is available.
No tax benefits,
There are discount on interest rate on income tax for annual payments of Rs.1.50 lakhs on home loans. But there are no benefits available for land loan.
No chance for NRIs,
Almost no bank is giving land loan to NRIs. If any bank willing to give they are charging interest rates.
Low time period,
For home loans repayment period is up to 30 years. But for land loans it is 15 years.
Documents needed to get loan,
For self-employed and businessmen identity proof, residence proof, passport size photos, income details of past 3 years. for businessmen last 3 years balance sheets, educational qualifications, proof of active business, three years income tax returns should be submitted. Job holders should submit identity, resident proofs, passport size photo, six months bank statement, form 16 and latest salary slip.
Loan applicants should bare 15 to 30 percent of construction value or land value. This is called as down payment.
Fixed, floating interest rate,
Fixed interest rate is static and no increase in it. But some banks are increasing them after 5 years. Banks check their PLR for every three months. If reserve bank of India do any changes in interest rates then banks also change PLR. Then there is a chance of changing from fixed to float or float to fixed.
The investment do not change till the end. If interest get increased then the time period will increase but there is no change in EMI.
If you repay the amount before the date of payment then they are collecting 0.5 to 2% pre-payment charges. Some banks not collecting any charges.
One bank to other bank,
To get the benefits of low interest rates RBI wants the banks to facilitate Home loan transfer. If you want to transfer the loan to other bank then the application of particular bank to be submitted. After verifying it bank gives NOC letter. And also gives statement for remaining loan amount. These documents should be submitted to the new banks.