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What Type Of Home Loan Is Best For A First Home Buyer?

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Buying a dream home is almost everyone’s dream. But today, it is difficult for people to own a home due to high property prices. Because of that, banks provide loan facility which helps families living in their own home. A home loan is the best way to finance house purchases without burning savings.

Due to this, banks and housing finances offer customers a variety of home loans. They make home loans convenient with tax benefits, low interest home loans, zero prepayment charges, and extended repayment tenure. 

Most financial institutions in India are made with home loan assistance because it is easy for customers to pay EMIs rather than the whole. As the demand for a home loan increases, real estate prices are also significantly increasing. So here are some of the most reliable home loans you should consider.

Type of Home Loans

Banks and other financial institutions provide a wide variety of home loans to customers. Here are some popular home loans for you to check out:

Regular Home Loan

A regular home loan is the topmost preferred home loan for borrowers. The lender provides funds based on eligibility and repayment capacity.Once the loan’s overall amount is received, the borrower can repay the loan through EMI. Borrowers can choose the repayment tenure while applying for this loan. According to the eligibility criteria, the lender approves around 80-90% of the total cost of the property. 

Construction Home Loan

As the name refers, a construction home loan is especially for those interested in constructing a new home. People who already have land but lack money to construct a home on it apply for construction home loans. In the construction home loan, the lender doesn’t provide the amount at once; instead, they distribute it in instalments per the house construction progress. Lenders approve rough construction low-interest home loans based on the house construction cost.

Conversion Home Loan

People who have made a house through a home loan, but now wish to move into a new house, can choose the conversion home loan facility. In the conversion home loan facility, the lender transfers the existing home loan to the new house. In the process, the borrowers don’t have to pay the loan of the previous home, and all the loan outstanding falls on the new house. The conversion loan can be a little expensive, but it can make things convenient. 

Home Improvement Loan

A home improvement loan is among the most popular loans where the lender distributes money to improve the existing home. If anyone already has a home but is willing to improve a room, floor, kitchen, or anything else, they can ask for a house renovation loan or improvement sanction. However, inflation hitting new records makes the cost of constructing anything expensive, costing lakhs in house improvements.

NRI Home Loan

As the name suggests, it is meant to assist non-resident Indians in buying Indian property. NRI home loan system doesn’t work like other home loan facilities. Instead, it follows a separate procedure for verifying documents & eligibility criteria. Both private and public banks offer the NRI Home Loan facility.

Bridged Loans

It is specially meant for existing homeowners looking to buy new property. The lender enables the borrower to buy a new house based on an existing property. The borrower has to verify their old and new home document to the lender, and the loan tenure is usually less than two years. A bridged home loan facility is reliable and preferred for those who already own a home.

Conclusion 

Make sure you research properly to determine which loan would best suit you as per your requirements. Before applying for a home loan, make sure to prepare all the required documents and ensure the interest cost.

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