Kinds of home loans
- Home Purchase Loan: The most common type of home loan availed is a home loan for buying ready-to-move-in properties, under construction properties, and pre-owned homes/resale properties. RBI guidelines state that lenders can offer a loan-to-value (LTV) ratio of up to 75-90% of the property value.
- Home Construction Loan: With this type of home loan, you can only get the money if you own a plot of land and plan to construct a house on it.
- Composite Loan: In order to get a home loan, you will need to first purchase a plot of land. This type of mortgage is perfect for individuals who want to invest or build their house. The first disbursement will be made towards the purchase of the plot, which means that it won't matter how much money you put down as long as you have enough saved up.
- Home Renovation/Improvement Loan: This can be used to finance home repairs and renovation expenses of the existing house. The interest rate for this loan is the same as that for a regular home loan, but its tenure is shorter.
- Bridge Loan: A short-term home loan can be suitable for individuals who wish to purchase a new house with the sale proceeds of the existing home. The loan helps you cover the gap between buying a new house and selling an existing one.
- Interest Saver Loan: In order to take out a loan, borrowers need to have their bank account linked with their home loan. If you deposited an amount over and above the EMI amount, your prepayment towards the loan will be used in a different way - it will be saved on the interest rate.
- 7 Step Up Loan: Another type of home loan is where borrowers pay lower interest rates during the initial years, but after that they receive an increasing EMI.This makes the overall loan affordability for young professionals who have just started their career!