Home Loan

Home Loan

For the majority of individuals, owning a home is one of the largest ambitions they will ever realize, and it is also an expensive one. Giving such a dream life demands a lot of work on the part of the buyer, and the only way to fit the property into their budget is by taking out a home loan.

A home loan can be used to purchase a new home or apartment, the land on which to build it, or even for home renovations, additions, and repairs.

The most popular kind of home loan used to buy a property is this one. Housing loans are available from a variety of housing financing firms, public banks, and private banks. You may borrow money to buy the home of your choosing and return the loan over time in monthly instalments.

Types of Home Loans in India

Loan for Home Construction

If you already own a piece of land and need money to build a house on it, this form of mortgage is what you need.

Loan for Home Extension

Let’s say you currently own a home and would like to add a room or a floor to it to suit your expanding family. Loans for home extensions might be used to finance this.

Home Improvement Loan

A home improvement loan provides financing for renovating or repairing the house if there’s any fault in the existing system, such as painting the house’s interior or exterior, plumbing, upgrading the electrical system, waterproofing the ceiling, and more.

Home Loan Balance Transfer

The current home loan interest rate may be overwhelming, or you may not be happy with your current lender’s service; you can transfer the home loan’s outstanding balance to a different lender who offers a lower interest rate and better service. Upon transfer, you can even check out the possibilities of a top-up loan on your existing one.

Benefits of Taking a Home Loan

Tax advantages

The ability to deduct interest and principal payments from your income tax is the main advantage of having a mortgage.

Decreased interest rate

In comparison to other loan options, the interest rate on a house loan is significantly cheaper. If you run into financial trouble, you might be able to extend your current house loan at a cheaper interest rate than a personal loan to get by.

Diligent property management

When you buy a house through a bank, the bank will thoroughly investigate the property from a legal standpoint and determine whether all the paperwork presented are legitimate.

You will be less likely to be scammed as a result of the bank’s diligence assessment. You and your home are protected if the bank authorizes the property.

Long repayment tenure

Unlike any other loans, home loans come with longer repayment tenure, as much as 25-30 years. This is owing to the significant loan amount one will have to borrow to purchase a house. Spreading the loan amount and interest applicable over a longer tenure will reduce the monthly EMIs reducing the borrower’s burden.

Eligibility

Banks have a list of eligibility criteria for home loans. The first thing banks look at is one’s credit history to understand their repayment habits. Typically, a credit score of 750 and above is preferred. Some other important factors taken into account are as follows: