For someone who is looking to buy a property, a home loan is an intelligent option in India. It gives you ownership of the house in easy installments plus it gives you certain tax benefits.
Owning a house is a major decision both financially and emotionally. Purchase of real estate after all is an investment, giving you good returns in the long run.
For this, you must choose the right type of mortgages and loans with the best offers and interest rates. There are certain facts about the Income Tax Act in India you should be aware of as well.
Home loans can cover the following – purchase of land, renovation, extension and construction. The following are different types of loans banks in India offer:
1. Home Purchase Loan: This is the commonly sought loan. It is used when you buy a new apartment or house.
2. Home extension loan: This loan can be taken up when you need to extend your current apartment or house further like for example, an extra bathroom, another room etc.
3. Home construction loan: This is taken up when you want funds to construct a new home on an existing property. This loan can sometimes be confused with home purchase loan but you should know that the terms and conditions of this loan are very different from purchase loans.
4. Home conversion loans: This loan is used when you want to want to move to a new home and need the extra funds for it. This eliminates the need of prepayment of the previous loan.