All About Types Of Home Loan
Home loan refers to a mutual agreement between the borrower and the lender in which the borrower purchases a property and the lender keeps the same property as security for the amount borrowed by the borrower. There are different types of home loans available in the market, and you should have the enough knowledge about different kinds of home loans before applying for one.
The different types of home loans that are presently available in the market are as follows:
Home Purchase Loan
These type of home loans are used for purchasing a new house.
Home Improvement Loans
These loans are used for implementing repair works and renovations in house that has already been purchased by the customer.
Home Construction Loans
The construction of a new house is available for these loans.
Home Extension Loans
For the expansion of an existing house of a customer these loans are given. For example: addition of another room in the house, etc.
Home Conversion Loans
The available loans are for those who have already financed their existing house with a home loan and wish to buy and move to another house for which some extra funds are required.
The existing loan of the customer move to the new house is with home conversion loan, which includes the extra amount that the customer requires. This eliminates the need of pre-payment of the previous home loan that the customer borrows.
Land Purchase Loans:
For purchasing the land for construction these loans are available . This loans are also available for the purpose of investment.
The bridge loans that can be taken by you, if you wish to sell the existing house and purchase another one. The bridge loans help in financing the new house, until a buyer is found for the new house.
Eligibility For Taking Home-Loan
The person who is of 21 years or above is home loan eligibility to apply for a home loan but he must have a regular income.
There are certain documents that a salaried person has to submit to the bank to get home loan. Documents that a bank needs to sanction your home-loan include:
· An Application form with a photograph
· Identification proof and Residence proof
· Current salary slip
· Form16 or Last Income Tax Returns document
· Last 6 months or annual bank statement
· Processing fee cheque
Maximum Loan And Maximum Term Of The Home Loan
· Maximum loan is 85 % of the cost of the house and it is also based on the repayment capacity of the customer.
· Maximum term for home loan is up to 20 years, and is also calculated keeping in view the retirement age of the customer.
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