What are the Types of Home Loans?

Home Purchase Loans

These are the basic forms of home loans used for purchasing of a new home.

Home Improvement Loans

These loans are given for implementing repair works, remedial and renovations in a home that has already been purchased.

Home Construction Loans

These loans are available for the building of a new home.

Home Extension Loans

These loans are given for increasing or extending an existing home. For example: addition of an extra room etc.

Home Conversion Loans

These loans are available for those who have financed the present home with a home loan and wish to purchase and move to another home for which some extra funds are necessary. Through home exchange loan, the existing loan is transferred to the new home including the extra amount required, eliminating the need of down payment of the previous loan.

Land Purchase Loans

These loans are available for purchasing land for both construction and venture purposes.

Bridge Loans

Bridge loans are intended for people who wish to sell the existing home and purchase another one. The bridge loans help finance the new home, until a buyer is found for the home.

Stamp Duty Loans

This loan is sanctioned to pay the stamp duty amount that needs to be paid on the purchase of property.

Balance-Transfer Loans

Balance Transfer is the transfer of the balance of an existing home loan that you availed at a higher rate of interest (ROI) to either the same HFC or another HFC at the current ROI a lower rate of interest.

Re-finance Loans

Refinance loans are taken in case when a loan for your house from a HFI at a particular ROI you have taken drops over the years and you stand to lose. In such cases you may opt to swap your loan. This could be done from either the same HFI or another HFI at the current rates of interest, which is lower.

Current Profile

Current profile of an applicant is very important criteria for granting a loan. This is specially for the people who are self employed or who have small business. Experience; number of years you have been working as salaried or self-employed in also taken into consideration.

Annual Income

Total income of the applicant at the end of financial year will be considered. A history of around 3 years will be required. Earning spouse improves your ability to repay.

Previous Loans

If you already have a loan then your chances of getting bigger loans are less, however you can take a loan to repay a loan. If you have already repaid a loan then that adds to your creditworthiness.

Owned Assets

If you own assets (land or house) then it can be mortgaged against then, loan making you further eligible to acquire a loan.

Academics

Educational background is a measure to an individual’s career and financial institutions are generally interested to know the same. A master’s degree is a boost to your sound educational background.

Bank Statements

A bank statement to check your spending and saving habits

Tax History

The amount of tax you pay defines your actual earnings, this is especially for self-employed.

Work Stability

How stable is your work profile? Can you go on the same path for more than 10-15 years? These are few questions which a financial institution is interested in.