Home / House Loan, also known as a mortgage, is the amount of money lent by an person, typically from banks and companies that lend money. The borrower must repay the balance of the loan with interest in Simple Monthly Instalments or EMI over a period of time that can range from 10 to 30 years depending on the nature of the loan.
CHOOSE A HOME LOAN THAT SUITS YOUR NEEDS
There are various types of home loans that can be made to accommodate each particular situation. You may take home loans to purchase properties that are either commercial or personal in nature.
Here are some of the different kinds of home loans you can take.
- Home Purchase Loan: You can buy any house or home that is within your budget.
- Construction Home Loan: You can use this loan to fund the expense of constructing a house.
- Land Purchase Loan: You can use this loan to purchase a piece of land.
- Home Improvement Loan: You can use this loan to renovate and improve your house.
- Home Repair Loan: Pay for the cost of fixing and rebuilding your home.
- Home Extension Loan: Increase the amount of built up space at your home using this loan.
TAX SAVING THROUGH HOME LOANS
Interest paid on home loans is tax deductible, which ensures that you will report expenses as you file income tax.
WHAT HAPPENS IF YOU CANNOT REPAY THE LOAN?
When you take out a home loan, the bank or financial institution accepts the property you are buying as security. This ensures that, in the case of non-payment, it retains the legal right to property.
IMPORTANT FACTORS TO CONSIDER WHEN APPLYING FOR A HOME LOAN:
- Principal: This is the amount of money you borrow from a bank or a financial institution.
- Duration: How long you’re going to be paying the loan back. Depending on the essence of your projected profits, you may choose the time that suits you.
- Interest: The bank or financial institution charges interest in return for its money lending services. The interest rate depends on the amount of the principal and the length of the loan being repaid.
- EMI Amount: You will be paying monthly instalments for the duration of your borrowing, until the end of the loan period. Each EMI is a combination of principal and interest. With each EMI, you will be paying back more of the principal and the rate of interest will steadily decrease.
ELIGIBILITY CRITERIA FOR HOME LOAN
The eligibility requirements for the Home Loan are simple and any Indian national with a strong financial profile can be funded. The criteria vary depending on whether you are salaried or self-employed. The parameters are often interdependent. For example, for two people of the same age, a person with a higher credit score is likely to be able to borrow a higher loan amount