Are loans available for home renovation? | Mint – Mint
Are there any home loan products available for specific purposes, such as home renovation or construction, and how do they differ from regular home loans?
—Name withheld on request
Apart from regular home loans for the purchase of property, there are various specialized loans that cater to all segments.
These include home renovation loans that are designed specifically for individuals who want to renovate or repair their existing homes. These loans provide funds to cover the cost of renovations, repairs, or improvements. The loan amount is typically based on the estimated cost of the renovation project. Unlike regular home loans, renovation loans may have shorter tenures.
Another option is home construction loans, which are meant for individuals who are building a new house. These loans provide financing for the construction process, including purchasing the plot, constructing the house, and associated expenses. The loan disbursement is usually done in installments based on the progress of construction. Construction loans often have different eligibility criteria and require documents like approved building plans and estimates from architects or engineers.
Then, there is home extension loans that cater to individuals who want to extend or add additional space to their existing homes. These loans provide funds for expanding the current structure or adding new rooms, floors, or sections. The loan amount is based on the estimated cost of the extension project. Like renovation loans, home extension loans may have shorter tenures.
Another option is balance transfer loans, which allow borrowers to transfer their existing home loan from one lender to another to take advantage of better interest rates or other favourable terms.
Borrowers can also opt for top-up loans that provide additional funds over and above the outstanding balance of an existing home loan. This can be availed by borrowers who have an existing home loan and need additional funds for renovations or other requirements.
It’s important to understand that the terms and conditions for specialized home loan products may vary among lenders. Interest rates, loan tenure, and eligibility criteria can differ based on the lender’s policies. It’s advisable to research multiple lenders, compare their offerings, and carefully review the terms and conditions before choosing a specialized home loan product that best suits your specific requirements.
Anuj Sharma is chief operating officer–IMGC (India Mortgage Guarantee Corporation).
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