Home Loans- Features and Benefits
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What is Home Loan?
For many people paying the entire cost of the new house in one go is impossible. Here Property Loan or home loan gives an enormous support to buy your new house.
A home loan is an amount of money that a person borrows from a bank or money lending company at a particular rate of interest to be paid with the EMI monthly. The property is taken as a security by money lending company for the house Loan. The property may either be personal or commercial. If the borrower is unable to pay the dues, the lender will possess all the legal rights to recover the outstanding loan amount by the sale of the property in question.
Types of Home Loans:
- Home Purchase Loan: This is a loan that a person takes for purchasing a home.
- Home Improvement Loan: This loan covers expenditure related with repairs of your home or maybe renovation.
- Home Construction Loan: This loan comes in handy if you are building a new house.
- Land Purchase Loan: Someone wishing to shop for a plot of land for constructing his/her own house can avail this loan.
- Home Extension Loan: Suppose you want to add another room, garage, bathroom or kitchen to your home. This is the loan that you simply should apply for and this also comes in handy if you’re getting to have another floor.
- Joint Home Loan: These are loans taken by two people or maybe more. As an example, spouses can apply for joint home loans.
- Home Loan Balance Transfer: You’ll use this mechanism to modify your outstanding loan amount to a different lender with better terms and conditions and lower interest.
- Top Up Home Loan: This type of loan helps you borrow some extra money above the outstanding loan amount.
Home loan (HL) EMI:
HL EMI may be defined as the amount you’ll pay for the repayment of your loan per month until the loan is wholly paid. However, the EMI amounts remain same, monthly the part of interest keeps coming down and the principal keeps on increasing, except when the rate of interest increases. HL tenure in India ranges from 5 years to a maximum of 18 years. The basic method applied for calculating the EMI is that, bigger the loan amount, higher are going to be the EMI, smaller the loan, lower the EMI. Longer the tenure, lower the EMI.
Who qualifies for a home loan?
- Cost/value of the property against which you would like loan are considered
- Your income, savings, debt obligations are considered.
- Your record for other loans, credit cards repayments will be taken into consideration
Documents required for Home Loans:
- PAN CARD/PASSPORT
- PROCESSING FEE CHEQUE
- BANK STATEMENT
- CREDIT SCORE
- AADHAR CARD/PASSPORT
- COPY OF PROPERTY DOCUMENTS
- BALANCE SHEET FOR THE LAST 3 YEARS
- LATEST OD/CC SANCTION LETTER
- INCOME TAX RETURN OF LAST 3 YEARS
- PROOF OF BUSINESS
- PROFIT & LOSS STATEMENT
Advantages of Home Loan:
- Lower interest rates as its secured loan
- Helpful for all Home related expenses
- Eligibility is greater
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