Different kinds of Loan
To encourage the ownership and the property buying trend the banks also offer various types of home loans that suit various needs. Home loans are not only restricted to the purchase or construction of a new home; they can also be used for re-mortgaging, home improvement or renovation, and raising cash. We list at some popular home loan types
1. Home Purchase Loan: As the name suggests, its a loan taken to purchase a new home.
2. Top-up Loan: It caters to expansion or extension of an existing loan. An example of a situation where people take this loan when they exhaust existing funds.
3. Home Construction Loans: Home Construction loans are provided by most of the prominent banks and financial institutes. Generally, there are two types of construction loans. The first one is provided as an all in one loan and changes into a home loan upon completion of the home. The other one is the construction only loan that is due when the construction is complete and then the loan must be paid off. The first type of loan is generally taken by individuals and the second one is availed by builders as construction of a group or society of properties takes time and the developers get the time and arrange the money to pay off the loan.
4. Bridge Loan: Planning to buy a new property by selling an old one? Bridge loans can be an ideal instrument for such deals. Bridge loans are designed to bridge the gap between a new plot and the one that is sold. It helps in financing the new home until a buyer is found for the old home. The difference of amount between the two homes is financed by bridge loan.
5. Home Improvement Loan: Home Improvement Loan is the loan given by banks for making changes or improvements in the home. It helps in making your home a refreshing place for the entire family.
6. Refinacing loan: Home loan transfer (also known as refinancing or balance transfer) is an option that most individuals opt for to avail the benefit from lower interest rates prevalent in the market. Here Individuals looking for better interest rates can discuss with their bank or their competitors on re-negotiating the interest rates based on the good repayment track record and changing interest rates etc.