The housing loan options are of multiple choices being available in our country. Buying a house is a crucial part of an individual’s life as an individual has to spend the life savings just for buying one house. The home loan options available are buying a new construction flat, buying a resale flat, buying a bungalow, buying a house in a low-cost housing scheme under the government project. The housing projects are massively getting constructed in India, mostly amongst the tier I cities metros and tier-II cities. The pandemic and work-from-home system have led many people to shift to smaller cities amongst the tier-II cities and invest there in properties. The growth in metro cities is also seen high as the future growth potential of an individual lies still mostly in the metros. There is ordinary kind of homes & the other is premium luxury apartments. The premium ones are the ones that cost more than Rs.1.50 crore. The demand for luxury homes which was slack has also seen a rise in demand post the pandemic. The demand for housing is ever increasing due to India’s rising population and large-scale migration from rural places or smaller towns to the metros.
The real estate market is expected to grow rapidly due to the ever-increasing population. The demand is expected to rise in the metros as more people are expected to migrate in the urban region from the rural region in India in search of job opportunities. After buying the first home, people are also running behind the second homes for investment like villas, penthouses. Etc. Due to demonetization and also the COVID wave has taken a hit in the investments of the real estate markets for holiday homes and villas, penthouses. The luxury markets are also expected to rise in case of the rising demands for the premium up markets, mostly in metros. The Real estate market is rising in metros due to the economy’s recovery back to normal and the rising stock markets, which have crossed the 50,000 mark for the first time in India. Low-cost housing is another potential market for the real estate sector. In metro cities like Mumbai, Delhi, Bangalore & Chennai, due to the scarcity of land and high prices, there is a huge demand for small-sized homes suited for the lower-income groups.
Following are the different home loans option available in India:
Loans for residential property:
The bank finances a loan up to 80% of the property value for buying a house. Loans for buying the residential property are the most sought loans as buying the house for staying is the most common purpose of buying the house for which home loans are taken.
For home extension & expansion:
The loans can be availed for the extension or redevelopment of the house as well. The loans can be taken only if the municipal authorities approve the FSI. In the case of FSI being approved, the loans can be taken to maintain the exterior part of the house or even to construct new houses by the demolition of the existing ones. Banks can approve loans up to 90% of the construction cost, and the tenure can be maximum of 20 years for the construction of a new house in case of a bungalow or else a building.
Loans for purchase of plot:
The conditions applicable for the purchase of the plot are similar to that of buying the flat. The bank expects the property documents should be with clear titles as the chances of disputes are higher in the plot as compared to the flats. Thus loans can be taken by the bank for the purchase of the flat as well. And also, for the construction of the house on the residential plot, loans can be availed.
For balance transfer:
The loans can be availed for the balance transfer as well. If the interest charged by the bank is higher than the competitors, then, in that case, a home loans balance transfer can be availed by the borrower. The balance transfer can help reduce the interest repayment by transferring the loans to another lender. Also, the tenure can be increased or else decreased by the borrower subject to the lender’s approval. This home loan balance transfer can help in reducing the repayment liabilities of the borrower.
Thus multiple options are being available for the type of home loans that can be availed. The home loans for residential property can be availed at attractive interest rates of 6.50% per annum. Also, loans can be availed for the balance transfer, plot purchases, and the renovation of the exterior part of the homes or else for the redevelopment of the house. As the interest rates are sliding down gradually, it is becoming more attractive for homebuyers to avail of loans.