Types of Housing Loans

Housing loans are varied and range from 10 years to 30 years. Some of the housing loan types are below.

Home Purchase Loan

This is where an individual is looking to purchase a fully-constructed housing structure, either a newly constructed one or previously occupied. The loan amount sanctioned would be around 80% to 90% of the property cost.

Home Construction Loan

In this situation, the individual is looking to build a home on a vacant piece of land that he or she owns. The house, in this case, is most likely a standalone one and does not form part of society. The loan amount approved is generally based on the approximate construction cost.

Land Purchase Loan

The loan is taken to purchase a piece of land to construct a home. It is a flexible option where the owner can possess the piece of land even as an investment. The loan amount approved, on average, is about 85% of the land cost.

Home Repair/Improvement Loan

The loan is for internal and external repairs that augment the look of one’s living space. Improvement and repairs include painting, construction of overhead water tank and electrical renovation.

Home Loan Balance Transfer

Under this option, the borrower can transfer the home loan to a different lender. This is done to avail better services or lower interest rates.

NRI Home Loan

This option is available for Non-Resident Indians who wish to purchase a residential property in the Indian subcontinent. The formalities and application procedures are different from the other loan types.