Acquiring a home which you can proudly call as your “Own House” is a life-time decision. It requires a lot of research, planning about your exact necessities (your family matters a lot on coming up to a conclusion regarding necessities) and finally requires huge finances. Your home has to be a place where you can easily relax after coming from day’s tiring schedule, a place where you can spend fruitful time and beautiful moments with your family.
What is Home / House Loan?
Home Loan is a Secured loan offered against the security of a house/property which is funded by the bank’s loan, the property could be a personal property or a commercial one. The Home Loan is a loan taken by a borrower from the bank issued against the property/security intended to be bought on the part by the borrower giving the banker a conditional ownership over the property i.e. if the borrower is failed to pay back the loan, the banker can retrieve the lent money by selling the property.
Types of Home Loan
There are different types of home loans available in the market to cater borrower’s different needs.
- Home Purchase Loan: This is the basic type of a home loan which has the purpose of purchasing a new house.
- Home Improvement Loan: This type of home loan is for the renovation or repair of the home which is already bought.
- Home Extension Loan: This type of loan serves the purpose when the borrower wants to extend or expand an existing home, like adding an extra room etc.
- Home Conversion Loan: It is that loan wherein the borrower has already taken a home loan to finance his current home, but now wants to move to another home. The Conversion Home Loan helps the borrower to transfer the existing loan to the new home which requires extra funds, so the new loan pays the previous loan & fulfills the money required for new home.
- Bridge Loan: This type of loan helps finance the new home of the borrower when he wants to sell the existing home, this is normally a short term loan to the borrower & helps during the interim period when he wants to sell the old home & want to buy a new one, It is given till the time a buyer is found for the old home.
- Home Construction Loan: This type of loan taken when the borrower wants to construct a new home.
- Land Purchase Loan: It is that loan which is taken to purchase a land for construction & investment purposes.