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Chapter
4 – HOUSING LOAN

Home
loans work like any other responsibility. That is, loans are simply specific
money that we derive from a bank, a private mortgagee, or some other type of
lender. Afterwards, we must repay our errands with interest. However, unlike
other types of loans, home loans are different in several respects. Owning a
piece of land or property is a lifetime dream for every individual. There are many
home loans provider in the market. There is different type of home loan i.e.

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Types of Home Loans:


Home Purchase Loans


Home Improvement Loans


Home Construction Loans


Home Extension Loans


Home Equity Loans


Land Purchase Loans

• Bridge Loans

1.    
Home purchase loans

These
are the basic forms of home loans used for purchasing of a new home. With about
a million home lenders and mortgage brokers it’s becoming a tough challenge as
the days are progressing. But at the same time, when the sites are coming up
with all the latest tools and relevant information for us, and with  all such conveniences, obtaining a home
purchase loan or mortgage has become really pretty simple. However, at the same
time though, we may be flummoxed to look so many attractive rates and offers in
the market, not to forget the “hidden costs” associated with each of them.

 

2.    
Home
improvement loan

Home
improvement loans are used to finance improvements and add on to the existing set
of credentials of beauty on your owned house, recently purchased property or
rented accommodation. Home improvement loans are used to maintain or enhance
the value of your house. In general it includes: repairs, remodeling,
energy-related items (permanent in nature), repairs, a new kitchen, a new bathroom,
terrace, an extension or general property improvements. Luxury items and
fireplaces are generally not eligible, though. Many improvements in landscape
and even swimming pools are nowadays considered to be a part of home
improvement.

3.    
Home
construction loan

Home
construction loans are used to finance for the construction of our newly
acquired home or if we are planning to build a home.

The
factors include in calculations for house building costs


Design of the house

•Construction
cost

•Financing
Cost

•Buildable
site

All
the above mentioned costs will help us to determine the amount we may need to borrow.
For example, besides calculating the construction costs, we may also be required
to consider the total expenditures to develop the site in order to build. Each site
is unique requiring different expenditures so this specific rupee amount will
vary from site location to site location.

Payment:
Before the house starts getting build, we will be required to pay a deposit to
your builder as well as paying a deposit for the land if we are buying land. As
work progresses you will need to make payments to the builder. Certain loans
can be structured for progress payments to be made during construction.

4.    
Home
extinction loan

Home
extension loans are used by customers to get loans from the banks to extend their
houses, by adding more rooms, kitchens, wash rooms, terraces, or any other rooms
for your growing family. It may also be used to enclose open balcony/terraces pace,
or constructing a Pujaghar.

Maximum
Amount of Home Extension Loans:

Banks
generally offers about 70-85% of the total amount of home extension as loan.
The amount of loan sanctioned also depends on a number of factors such as the
age of the applicant at the time of loan, tenure of the loan, repayment
capacity of the borrower; his/her credit history etc.

5.    
Home
equity loan

Home
equity loans helps customer to en cash the market value of the commodity by
taking a loan by mortgaging the property. So, Home equity loans are availed by
customers, who wish to mortgage his/her property to the bank for taking some loan
for some other purpose. Then, it’s up to the bank’s discretion to consider the market
value of the property and accordingly decide how much to pay to the customer.
Both the residential as well as non residential property can be considered for the
approval of the loan, provided the mortgager is a licensed title holder and the
land is free from any kind of dispute. Home equity loans don’t restrict one to
use the loan money in specific investments. It might also be used in marriage,
higher education, medical expenses, etc. However it should not be used in any
illegal or speculation purposes.

6.    
Land
purchase loan

Land
Purchase loans are used by customers who wish to purchase a plot of land for commercial
or residential purpose. Everyone has his/her dream perfectly sketched in his
souls and so is his ambition to get his house erected on the exact location he
dreamt that to be. If you have found and shortlisted the piece of land, and
have arrived here for finance, you have come to the best place you could have
arrived in the web. Now, that you have decided to purchase a land as an
investment or for your own dream home, you will realize that a land purchase
loan is one you will cherish. Loans that are strictly for land purchase can be
as scarce as good residential plots. While many lending firms around the nation
compete to provide mortgages for the purchase of a house on a lot, only local
institutions typically will be interested intending for an empty lot. 

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