Know Home Loan & It’s Type
If you see today’s scenario of this world having own house is a bit strenuous due to the increase in the rate of land. A good loan facility is needed to fulfil one’ dream in such a situation. Many banks provide home loans which can help you to get your dream home. To make loan procedure easier at your fingertips, banks have come with their apps.
According to the finance, the loan is lending of the money by one or more individual. Organizations, or the entities for individuals, organizations etc. Borrower the Recipient incurs the debt, and is liable to pay interest on the debt until it’s repaid, and also should repay the borrowed principal amount.
Documents which evidence the debt, eg. A promissory note which will normally specify, among the other things, money borrowed principal amount, the interest rate which the lender will charge and repayment day. For the period of the time, a loan entails the reallocation of the subject asset(s) between borrower and lender.
Interest always gives incentives to the lender for the engagement in the loan. Each of the obligation and the restrictions are enforced by the contract in a legal loan, Loan covenants place the borrower under the additional restriction.
Banks and credit card companies act as the provider of loan which is the main activity of financial institutions. For other institutions, issuing the debt contract such as the bond is a typical source of the funding.
There are some types of popular home loan which are available with banks and no-banking financial companies include:
1. Home Buying Loan:
Commonly known as a home loan or housing loan.
• These loans are for Buying Houses or apartments.
• Normally all the banks provide home load up to the 60times of your current month net income.
• Various documents are required for application of home loan, which are aadhar card, Pan card and photos.
• Typically offers 80-85% market value of the property.
• They are available for the various tenture periods and with the fixed floating interest rate.
2. Land Loans:
• A land loan is available for the purchase of land or the empty plot for the residential activity, constructions or the investment purpose.
• This loan is not for buying agriculture land.
• Land loan offers LTV up to 70% in most of the cases, Unlike home loans which offer LTV of ration pertaining to 80 to 85%.
3. Improvement of Home Loan:
• This loan is for home renovation.
• This is extended towards all the construction and renovation works.
• The quotation will depend on the renowned architect, through which the loan will apply or approved.
• Under home improvement loan following things are covered
• Extending room, new balcony making, flooring, painting, plumbing works, etc.
4. Bridge home loan:
• This loan is useful for the people who sell their existing property and also use the funds to upgrade their home or purchasing of a new home.
• It is not necessary to wit till final sales execution of the existing property. Bridge home loan allows to purchase the new home and repay to the bank once the existing home is sold.
5. Mortgage Home Loan / Loan against the property(LAP)
• This loan is useful for the people who are ready to keep their own house or any of the other property mortgaged to take up a new house.
• In this loan, the property or the real estate is used as the collateral.
• Buyers get in with the contract with the lender, due to which the buyers will get a specific amount for his property according to the current valuation.
• The payment is due to the period of time until the amount of loan is cleared upon to which mortgage is removed.
• A mortgage loan is the most considered as the secured loan, as the financial institution has your property as the security.