Home loans are the financial assistance that a person asks from a financial institution or bank to purchase a house by mortgaging the house documents. There are specific companies also accessible that provide only housing loans and are generally called housing finance companies. The lenders charge a few percent of the house’s purchase price in the form of down payment and finance the remaining amount to the borrower. The funded amount includes all miscellaneous charges, such as stamp duty, registration fee, and so on.
There are many types of home loans accessible for the citizens, such as:
- Construction loan: If the borrower needs to reconstruct his existing house or construct a house on his plot, he can go for home loans. The owner of the land can also avail of the facility of a home construction loan if he has to complete an unfinished construction.
- Improvement loan: If the owner needs to repair or furnish his existing home, then these loans are most popular, charging a meager rate of interest. The owner is required to have a regular source of income for the payment of loans and principal amount along with necessary documents.
- Purchase loan: If a person desires to buy any flat, bungalow, or residential property, he can avail of these kinds of home loans. The eligibility criteria for taking a purchase include the minimum age of 18 years and employment experience of 2 years, along with a credit score of 750 or more than 750. The lending companies demand the documents of the property that is to be purchased by the borrower from the loan amount with the condition that the property must be legally registered.
- Extension loans: When the owner or borrowers wishes to extend the space of his house by constructing or adding more rooms in the existing space, he should apply for home extension loans. The essential documents needed for the verification depend from lender to lender, but a registration certificate of the house is mostly required.
Among these home loans, the borrower can choose one, as per his accordance and requirements. He is just needed to have a monthly income source to pay the interest charges and the loan amount after a fixed period, to avoid any kind of inconvenience from the part of lending companies. In-depth verification of the schemes and policies of the loan before applying is also suggested for a safe deal.