Before applying for a home loan with any lending financial institution, e.g., it is important to know which loan variant you actually need. For that, you need to identify whether you are purchasing, renovating, reconstructing, or doing other modifications in your house. Once you identify this, you will be able to apply for the loan easily. You can compare different offers online and choose offers like ICICI home loan that are best suited for you.
What are the Types of Home Loans?
The various types of home loans which you can apply for are as follows:
1. Home Purchase
The most commonly known and easily accessible type of home loan is the home purchase loan. You can use this variant to purchase a new residential property or a second hand property from its old owner. It is generally available in a hybrid loan form.
Besides, you can apply for it on settled investment rates or skimming premium rates. Go through these various rates of the lending financial institutions like UBI home loan interest rate, and apply accordingly.
2. Land Purchase
Another very famous type of loan is the land purchase loan which is taken to buy land for building a residential property. In this type of credit, you can get up to 85% of the total cost of the area to be purchased from your respective lending financial institution. In addition, you can use this loan variant for private and speculative purposes.
3. Home Construction
A home construction loan is available for people who already have purchased the land or had the land before and now want to build a house. You can apply for this loan variant to cover the costs of constructing this house.
However, if you are purchasing the plot, then keep in mind to do so within a year of availing the loan. This is because the expense acquired in purchasing this land will be incorporated for ascertaining the total cost of your house.
4. Home Extension
Extending a house means modifying the current structure of your house and adding space like another room, hallway, extra bathroom, etc. The credit available to fund these kinds of changes are known as home extension loans.
5. Home Conversion
Imagine you have already applied for a loan to acquire a house but due to some unpredictable reasons, you need to choose an alternate house and move immediately. In such cases, you can apply for a home conversion loan to exchange your current loan for the new house you are moving into.
6. Home Improvement
Home improvement loans are usually acquired to renovate or remodel an old house which will require a huge amount of funds to be fixed. You can use such loans for painting walls, interiors, repairing old walls or floors, etc.
What are the Benefits of Applying for a Home Loan?
The benefits you will get after applying for a home loan are as follows:
- Tax benefits: A home loan can give you the advantages of tax deduction and hence save on taxes.
- Risk reduction: Considering the inspection carried out by the lending financial institution before giving you the loan, it prevents you from investing in the wrong residential property.
- Liquidity goals: Getting a home loan will keep your savings intact and help during uncertain obligations.
For more home loan benefits you can check out the interest rates and the offers of your respective lending financial institution.
What are the Documents Required to Apply for a Home Loan?
The documents you will need to apply for a home loan with any financial institutions like ICICI home loans, are as follows:
- Identity Proof: PAN Card, Aadhaar Card, Driving Licence, or Voter ID
- Address Proof: Amenity Bills, Passport, Aadhaar Card, Driving Licence, or Voter ID
- Income Proof Documents:
- For Self-employed Applicants or Co-applicants
- Income Tax Returns (of last 3 years)
- Qualification Certificate (for professionals)
- Profit and loss statement (of last 3 years)
- Balance sheet audited by certified CA
- Business Licence details with address proof
- TDS Certificate
- For Salaried Applicants or Co-Applicants
- Salary Slips (of last 3 months)
- Form 16 or Income Tax Return (ITR) (of last 2 years)
What are the Eligibility Criteria to Apply for a Home Loan?
The eligibility criteria you need to meet before applying for a home loan are as follows:
- Nationality: Indian residents
- CIBIL score: 750 and above
- Employment: minimum 3 years (for salaried individuals) and minimum 5 years (for self-employed individuals)
- Age: 23 to 63 years (for salaried individuals) and 25 to 70 years (for self-employed individuals)
How to Apply for a Home Loan?
The step-by-step processes to apply for a home loan are as follows:
Step 1: Visit the application page of the home loan with the respective lending financial institution.
Step 2: Fill out the basic details in the application form like identity, address, income, and other details.
Step 3: Undergo a verification process through OTP.
Step 4: Enter your required loan amount, tenure, and rate of interest.
Step 5: Submit the loan application form.
Step 6: Wait for approval and the loan amount to get disbursed.
Now that you know in detail about all the home loan types, along with their application process, apply for it soon. However, before applying, do not forget to choose an offer like a UBI home loan. Check the interest rates, tenures and all other deals to grab the best loan offer.