What is a home loan?
A home loan, often known as a mortgage, is a sum of money borrowed by an individual from a bank or other lending institution. The borrower must repay the loan amount plus interest through Equated Monthly Instalments, or home loan EMIs, over a period of time that can range from 10 to 30 years, depending on the loan type.
What are the various types of home loan?
There are various types of home loan that vary based on the applicant requirements, some of them are as follows:
- Home purchase loan
- Construction home loan
- Land purchase loan
- Home improvement loan
- Home repair loan
- Home extension loan
Factors to be considered before opting for a home loan
- Principal
- It is the amount that the person borrows from the bank.
- Tenure of the home loan
- It is the duration for which the home loan is taken.
- Interest
- The bank or financial institution charge an interest per annum in exchange for the money lending services.
- Bank fees
- Banks and financial organizations usually charge home loan fees for the lending loan, therefore the borrower should check which organizations charge fewer fees and make the choice.
- Home loan balance transfer
- Applicant should check whether the financial organization provides the opportunity of home loan transfer or not and make a reasonable choice.
The home loan process is very simple, the applicant can apply for the loan both online or offline. If the documents are correct, the loan gets sanctioned within 72 hours. Various financial companies offer low-interest home loans for a very large span of time extending up to 30 years. Therefore, a borrower should make a wise decision after taking into account all the factors affecting the loan.
Read Also: Know about Home Loans in India 2021
