Financial institutions provide a number of variants of Home Loans depending upon your requirements and the type of property
Home Purchase loans:
•Loans are provided for purchase of plots, ready built houses and under construction residential properties. Generally, financial institutions extend loans maximum upto 80% of registered value of the property.
•In case of purchasing a property in an under construction project, it is most important to check if the project has been approved by requisite civil/municipal authorities and by leading financial institutions.
•In case of purchasing a ready built property vide a resale transaction, wherein the seller has already availed of a loan, it is important to obtain loan details and check with the proposed financial institution in advance regards their ability to transact a home loan with closure of seller’s loam through financed amount. Please note that not all financial institutions support such transactions.
•In case of purchasing a plot, please do note that financial institutions normally fund composite loans only i.e. plot purchase plus construction. Depending upon their internal policies, they may extend the time of initiation of construction upto 2-3 years from the date of purchase of the plot
•Loans can be availed for construction of house (on plot of land) subject to availability of approved plans from requisite municipal authorities. Financial institutions extend upto 100% of the construction estimate value subject to overall loan not exceeding 80% of the property value as determined by empanelled technical evaluation firms.
Renovation or Home Improvement loans:
•Financial institutions extend, loans for renovation of your existing house. Immovable fittings, furniture and civil work can be included, however, any movables, including electronic equipment, etc. are excluded. Financial institutions extend upto 100% of renovation or improvement estimate subject to overall loan not exceeding 80% of market value of the property as determined by empanelled technical evaluation agencies. You can claim income tax benefits under Sec of the Income Tax Acts when availing of this loan type
Balance Transfer and top-up loans
Financial institutions offer takeover of existing home loans at lower rate of interest from other institutions and can extend topup loan upto 80% of market value of the property as determined by empanelled technical evaluation agencies subject to the top up loan being restricted to a certain percentage of the main loan being taken over. Important to note that the end usage of funds of the top up loan should be for legitimate purposes only and not for speculation. The financial institution may require you to furnish details on the end usage of funds post-facto (post disbursement of loan)
Commercial Property purchase
Majority of the financial institutions provide loan for purchase of commercial property. The nature of usage may be for office or shop/retail purpose. The loan may be extended upto 80% of the registered value of the property subject to market value being restricted at maximum of 80% as determined by empanelled technical evaluation firms. Most financial institutions do not fund under-construction commercial properties and therefore it is important to check before purchasing a unit in an under-construction project. Also imperative to check that the property is approved as a commercial unit by local municipal guidelines.