A Home Loan is basically used to fund the purchase or construction of a house.
Types of home loans:-
There are different types of home loans, depending on the purpose they are used for. Some of these are:
Home Purchase Loans-
Home purchase loans are the most popular types of home loans in India. This is where an individual uses the disbursed loan money to purchase a newly constructed apartment or an already constructed property.
Land Purchase Loans-
Land purchase loans are used to fund the purchase of land where an individual is planning to build their home. Lenders usually provide a maximum of 85%-90% of its cost, while the other 15% should be put together by the individual.
Home Construction Loans-
This type of loan is for those individuals who are planning to build a house on their own land.
Home Improvement Loans-
Home improvement loans are taken by individuals who are unable to gather enough funds to renovate their houses.
Eligibility Criteria –
- A person needs to be aged between 18 and 60 years.
- An individual needs to be a salaried or a self-employed individual with a stable income.
- A person should need to earn more than the minimum income quoted by the banks.
- Your monthly income should be as much as you can able to pay 50% of your income to pay EMIs.
- Photograph along with Fully filled and signed application form.
- Identification proof and residence proof: For ID proof you can give anything like your PAN Card and for residence proof, you need to provide a copy of your passport/driving license.
- A cheque for the processing fee.
- Bank statements for the last 6 months.
Salaried professionals had to provide their payslips for the last three months along with their Income Tax Returns (ITR) filing.
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Self-employed professionals, on the other hand, there is a requirement to provide proof of academic qualification certificates and proof of their business’ existence. Along with this, they need to provide proof of ITR for the previous three years which should also include the computation of income. Lastly, they need to provide a balance sheet and profit-loss account for the previous three years. if you want to same process education loan for study in india then click here.
Benefits of a home loan-
No prepayment charges:
There are no prepayment penalties for floating rate house loans, unlike other loans where lenders levy prepayment penalties on payments made toward the loan.
So, whenever you have extra cash, you may use it to make a partial payment on your mortgage and reduce your debt.
In the case of a floating rate house loan, however, there will be prepayment penalties.
Makes it easy to buy a dream home:
For many people buying a house with their own money is not possible, a home loan as it can be repaid in easy monthly instalments makes it easier to buy a house.
High repayment Tenure:
Among all types of home loans, It has the longest repayment tenure which goes up to 30 years, so one can reduce the burden of equated monthly instalments by extending the tenure. Use our house loan EMI calculator to know how EMI changes as you change your home loan tenure.
Saves you from paying rent:
As rent in metro cities is quite high it put a strain on your monthly budget. It is better to pay the EMIs and own a house.