A home loan refers to the sum of money that an individual obtains from a financial institution, such as a housing finance company, for the purpose of purchasing a new or previously owned home, constructing a new residence, or renovating or expanding an existing property.
This type of home loan is the most frequently utilized option for acquiring a residence. Numerous housing finance institutions, as well as public and private banks, provide housing loans that allow individuals to borrow funds for the purchase of their desired home, which is then repaid through monthly installments.
Borrowers can secure financing amounting to 80% to 90% of the property's market value. The lender retains ownership of the property until the loan is fully repaid.
Acquiring a home represents a significant aspiration and a major financial objective for many individuals. The advantages of homeownership extend beyond merely establishing a legacy for future generations. Although the prospect of purchasing a house may appear daunting, it is essential to recognize the various benefits associated with homeownership, including the opportunity to build equity. Furthermore, when the property is not occupied or utilized, it can serve as a source of passive income through rental opportunities.
When contemplating the acquisition of land, it may be necessary to secure a home loan to facilitate the purchase. Although many individuals associate home loans solely with the acquisition of residential properties, these loans can also be utilized for the purchase of undeveloped land intended for construction or other uses.
In the process of obtaining a home loan for land acquisition, the lender will evaluate both the property's value and your creditworthiness to establish the loan's terms and conditions.It is important to note that purchasing raw land can be a riskier investment than buying an existing home, as there may be unexpected costs associated with preparing the land for construction environmental regulations.
Get QuoteWhen considering the construction of a new residence, it may be necessary to secure a home loan to facilitate the financing of the project. This specific type of loan, referred to as a construction loan, is intended to supply the necessary capital to cover the expenses associated with building during the construction phase.
In the case of obtaining a home loan for the purpose of constructing a dwelling, the lender generally disburses payments directly to the contractor or builder in alignment with the progress of the construction, rather than providing a single lump sum at the outset. This method, known as a draw system, ensures that the funds are utilized appropriately and that the construction advances according to the established plan.
Get QuoteAn extension loan refers to a financial product specifically intended to support the expansion or renovation of an existing property. These loans aim to assist homeowners in enhancing both the value and utility of their residences without the necessity of selling or relocating.
By obtaining an extension loan, individuals can allocate the funds towards various expenses related to the addition of new rooms, the enlargement of current spaces, the modernization of appliances, or other enhancements to their homes. Generally, extension loans are secured by the property itself, which acts as collateral for the borrowed amount.
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