Home Loan
Some common types of home loans available in India are:
- Home loan for purchase of a flat in an apartment complex: Banks finance their customers to buy flats in residential complexes. Here you have the concept of an Undivided Share (UDS) in the land.
- Home loan for purchase of an individual house: This is similar to the type of Home Loan described above however there is no concept of ownership of UDS. The entire land belongs to the borrower. Naturally, such houses have a better resale value.
- Home loan for purchase of land/plot: Banks finance their customers for the purchase of vacant plot or land for subsequent construction of house. Usually, banks stipulate that the construction of the house should begin within one year of purchase of the land for the loan to be treated as a home loan.
- Home loan for construction of a house on own land/land: You can avail a loan for constructing your house on your land. Banks have their methods of determining the cost of construction. Naturally, you need to obtain the requisite permission from the local municipal authorities for constructing your house on the land. You need to have an approved plan as well.
- Home loan for home improvement/extension: You can approach a bank for financing home improvement or for extending the house. In the latter case, you need to have the requisite approvals and plans in place.
- Home loan balance transfer: This facility allows you to
switch over your Home Loan from one bank to the other. If you have a
high-interest Home Loan, availing this facility can be useful. You could
transfer your outstanding loan amount to another lender at low interest
rate, thus saving on interest cost.
