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Types of Home Loans: 5 different kinds of Home Loans
If you are planning to buy or build a new home, you may be shopping in the market for a Home Loan. However, before applying for a Home Loan, it is important to have a working knowledge of the various kinds of Home Loans available in the market, today. Depending on your circumstances you can apply for a loan that is aligned to your specific housing needs.
Different types of Home Loans
Basic Home Loan
This is the most basic, among the different kinds of house loans. This is a secured loan where the funds are allocated solely to purchase an already constructed new home.
Home Construction Loan
Let's imagine that you own a plot of land and want to build a house. A Home Construction Loan goes towards enabling you to fund the construction of your future home.
Composite Home Loan
This loan helps cover both the purchase of a plot of land, followed by the construction of the home over a specified tenure.
Balance Transfer Home Loan
Say that you have already taken a Home Loan but are unhappy with the terms and conditions. You have the option of seeking out a Balance Transfer Home Loan with a new loan service provider who can offer improved terms such as lower interest rates and a longer tenure. The benefit is that the Balance Transfer Home Loan works out to be more economical for your pocket.
Home Renovation Loan
Say you already own a home but want to upgrade the facilities due to wear and tear of the property. You can now apply for a Home Renovation Loan, which covers expenses such as remodelling, fixing, painting, and repairs of your home.
Documentation required for types of Home Loans
Home Loan documentation falls into multiple categories. The following documents are mandatory to avail various types of mortgages:
Mandatory documents
The loan application form and PAN Card are the mandatory documents.
Proof of identity
- Passport
- Aadhaar Card
- Drivers license
- Voter’s ID
- GOI issued photo ID
- Job Card by NREGA duly signed by an officer of the State Government
- Letter issued by National Population Register confirming details of name, address, photograph.
Proof of address
- Aadhaar Card
- Drivers license
- Voter’s ID
- GOI issued photo ID
- Gas bill
- Electricity bill
- Telephone bill
- Property tax receipt
- Job Card by NREGA duly signed by an officer of the State Government
- Letter issued by National Population Register confirming details of name, address, photograph.
Date of birth proof
- Passport
- Aadhaar Card
- Driver's license
- PAN Card
- SSC certificate
- Birth certificate
Signature proof
- Passport
- PAN Card
- Bank’s verification
Proof of income
- For salaried professionals: 3 to 6 months of salary slips; 6 months of bank statements showing salary transfer
- For self-employed professionals: Income tax returns for two or more years; 6 months of personal and business bank statements; tax audit report; business continuity proof
Additional documents for Balance Transfer Home Loan
- 12 months loan account statement
- Loan details
- 6 months' bank statements showing EMI deduction
Also Read: Ways to choose the right Home Loan for your needs
The takeaway
Now that you know the various types of Home Loans — from Composite Home loans to Renovation Loans, you can make an informed decision. Choose from a wide range of Home Loans offered by Axis Bank for diverse housing needs. Interest rates start from 8.7% for salaried applicants, and 9.1% for self-employed applicants. You can take a Home Loan of between ₹3 lakhs and ₹5 crores, based on your needs.
Enjoy the benefits of seamless online applications via Internet or mobile banking, easy disbursal of Home Loans, and EMI waivers, which result in cost savings.
FAQs
What are the different types of Home Loans?
There are five types of mortgages: a regular Home Loan, a home construction loan, a home composite loan, a home balance transfer loan, and a home renovation loan.
Why do banks provide Home Loans?
Banks offer diverse types of Home Loans to make housing more affordable to consumers like you, based on your specific needs. On the other hand, banks generate revenues by charging interest on the various types of residential loans.
Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.
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