The popularity of home loans as a medium to acquire the dream property has been on the rise across the country in the past decade. Every day more and more people apply for this wonderful financial tool that lets you own a home and have a array of other fringe benefits. Home loans are meant only to buy a house but they can be used for a variety of associated purposes. There are different types of home loans which cater for varying requirements of the customers. Mentioned below are some the most popular types of home loans that are being used customers to meet a host of needs.
The Home Purchase Loan: This is the most basic variant which is used to buy a house. The customer can use such a loan to acquire a newly constructed house or an existing residential property from the previous owner.
The Home Improvement Loan: This type of loan is useful for getting all kinds of repair works done in a house that one already owns. Improvements, modifications, additions and renovation can be undertaken with such loans.
The Home Construction Loan: This is similar to the home purchase loan and can be used to construct a house on a piece of land that the borrower owns from before. The disbursement of the loan may be in a single installment or in a number of installments as the construction of the house progresses.
The Home Conversion Loan: This type of loan is availed by people who have already taken a home loan and wish to buy another house for which they require certain additional funds. In such cases the bank provides a new home loan that covers the existing portion of the already availed home loan and some additional amount which can be used for buying the second home.
The land Purchase Loan: This loan is made available to a customer who wishes to purchase a piece of residential land from the money and subsequently apply for a home loan to construct a house on that land from the same financier. In some cases the clause requiring a home loan application at a subsequent stage is not applicable and the loan can be taken for buying the land only.
The Bridge Loan: This is a unique type of loan which meant for people who want to sell off an existing property to buy a new home. The loan provides the customer with the money to a new home until such time he is able to sell off his existing house.
Most of the variants of home loans have the added advantage of tax exemptions which make them so lucrative. It is up to the customer to decide the type that is required by him and most suitable for his purpose. It is advisable to adequately study all options available in the market even prior to searching for a house. Employing the right home loan may save a huge amount of money for the informed customer.