Home Loans

There are many types of home loans available in India offered by various Banks and Housing Finance Companies like:

• Home purchase loans : Loan for purchase of a house.
• Home improvement loans : Loan for repair works and renovations in a home already purchased.
• Home construction loans : Loans for construction of a new home.
  
• Home extension loans : Loans for extending or expanding an existing home.
• Home conversion loans : Loans for those who have financed the present home with home loan and wish to purchase and move to another home for which some more fund is required. Existing home loan is transferred to new home without need of pre-paying the previous loan.
• Land purchase loans : Loans for purchasing a land (plot) for both home construction and investment purpose.
• Bridge loans : Loans are designed for people who wish to sell the existing home and purchase another. The bridge loan helps to finance the new home until a buyer is found for the old home.
  
• Balance transfer loans : Loan to help you to pay off an existing home loan and avail the option of a loan with a lower rate of interest.
  
• Refinance loans : Loans to help you to pay off the debt you have incurred from private sources like relatives and friends for the purchase of your present home.
• Stamp duty loans : Loans for paying stamp duty.
• Loans to NRIs : Loans for NRIs wishing to build or buy a home in India.

Why one should take a loan ?

The loan not only gives you tax benefits, it gives you the facility to repay the loan in EMIs. Both principal as well as interest paid attract tax benefits.

But the loan does not come free.

Other costs are involved.

• Processing charge : It is a fee payable to the bank or hosuing finance company at the time of applying for a loan. It may be a fixed amount or may also be percentage of the loan amount.
• Pre-payment penalty : When loan is paid before the expiry of the agreed duration, the person has to pay penalty fixed by the company / bank and it may 1-2 % of the amount being pre-paid
• Commitment fees : Though not all banks / companies, many banks / companies levy a commitment fee in case the loan is not availed of within a stipulated period of time after it is processed and sanctioned.
  
• Miscellaneous charges : Some lenders may levy a documentation or consultant charges.
  
• Registration of mortgage deed.

If you want a loan, though you like it or not, you have to pay these charges.

Documents required.

• Income proof : A salary slip for employed, or IT returns of at least 3 years for self-employed.
• Residence Proof : Ration card, land line bill (preferably MTNL), Electric bill.
  
• Photo ID Proof : Driving License, Pan Card, Voter's ID card etc.
• Age proof