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Choosing The Right Home Loan

If you are planning to buy a home, you should be familiar with home loans processes, troubleshooting and how to choose the right home loan for the house that falls within your budget. There are various types of home loans offered by different financial institutions. You need to figure out which type of home loan is best for you.

Types of Home Loans Available:

  • Home Equity Loans
  • Home Extension Loans
  • Home Improvement Loans
  • Home Purchase Loans
  • Land Purchase Loans
  • Mortgage Loans

Many banks and financial companies offer home loans; however, before choosing a home loan option,consider few points as mentioned below.

Property Types: You should know more about the type of property in lieu of which you seek the loan. There are loans offered by banks to Resident Indians and NRIs for ready property, under construction property, self-construction and home improvement.

Loan Tenure: The loans provided by financial institution are offered in tenures or period of years. You should check out the tenure for loans available in the market. There are loan tenures available for up to 25 years.

Repayment Options – You need to choose between fixed and floating rate home loans. Many banks and financial institutions will provide you with the option of switching from a floating rate home loan to a fixed rate home loan once a year at no extra cost. But you need to check out the facts first with the loan providing firm.

No Penalty option - There are also no penalty options offered by some of the finance companies. In this mode, you can opt to pre-pay up to 25% of your loan every year. Pre-payment is permitted after a minimum of 6 months following loan disbursal.

Tax Benefits – You should be aware of the rights of your tax benefits on home loans. Resident Indians are eligible for certain tax benefits on principal and interest components of a housing loan under the Income Tax Act, 1961.

Always check with a financial home loan expert or financie company to understand home loan processes and to avail the best bargain on your home purchase.

Categories: Home Loans