10 Types of Home Loans Every Homebuyer Should Know
Loan to Purchase a Plot: This type of loan is availed by the borrower to construct a house on a land plot. The loan is sanctioned for the purchase of the plot. The borrower may choose to construct the house at a later time, as and when finances permit. The bank funds up to 85% of the cost of the land. However, the borrower cannot avail tax benefits on such loans.
Home Purchase Loan: This is one of the most popular kinds of home loans offered by banks. These loans are availed to purchase a new property or a resale property and the rate of interest on this loan is either fixed or floating. The borrower can avail tax deduction under the Income Tax Act for this type of loan. The loans sanctioned by the bank, funds up to 85% of the cost of the project, the rest must be paid by the borrower as a down payment.
Loans for Construction of Home: Home loans can also be availed for the construction of a house. The banks evaluate the cost of the land and sanction the home loan amount for the construction of a house. Loans for house construction can only be availed for land purchased within the same year. All major commercial banks offer loans for construction of a house.
See Also: Home Loan Interest Rates Rising
