All You Need To Know About Home Extension Loans
All of us aspire for big, spacious homes, but, we settle down with the one which fits into our budget – and that’s a wise decision. After all, one can’t keep waiting to gather enough financial resources to buy one’s dream home. It can be done later as you grow in life.
Need for bigger space is realised when children grow up, when parents or in-laws come in to live in the same house or when you need an additional room such as study room, pooja room or for creating work-out station. That is the right time to either buy a bigger house or extend the existing one.
However, buying a new house is not always a practical solution as it involves a lot of nitty-gritty and managing a lump-sum amount after a particular stage in life is not always possible. So people turn their heads towards extension. Though extension of home also needs funding, it would be less than the capital amount required for buying a new home. It will also eliminate unnecessary pains that arise in case you sell the older house and look for a new one. What you need most for extension at this point is just to manage the funds to meet the extension cost, which you can swiftly do by applying for home extension loan.
It is generally assumed that home loan is available to buy or construct a residential property. However, home extension is also deemed as a housing solution. Banks have been providing funds for extending home under a separate category called as home extension loan.
Here is what you need to know about home extension loans:
Home extension loans can be applied by anybody, provided the person has repaying capacity and has a decent credit score. If an individual is already servicing a home loan, he is eligible to get home extension loan as a part of extended service provided by the bank. Moreover, the process of disbursal would take lesser time as lesser documentation is required in such cases.
There is no reason to worry about as you are not required to repay the extension loan in a hurry. The tenure provided for the home extension loan is generally 20 years. But at the same time, age of the applicant, outstanding period of the ongoing home loan and other conditions are also the determinants of the tenure offered by the bank.
Interest rates for home extension loan are more or less similar to home loan interest rates. But, again, age of the applicant, source of income, nature of income and other factors play an important role in determining the interest rate.
So, if you are planning to add a room or a floor to accommodate your extended family or needs and there are no other financial resources to depend upon, you can consider availing of home extension loan with an ease of repaying it back till your home loan matures.