Home loans, also known as mortgages, are specifically designed to help individuals purchase residential property. They can also be used to refinance an existing mortgage to secure a lower interest rate or change loan terms.
Purpose: Purchase a new home, refinance an existing mortgage, home renovation or improvement, investment property purchase.
Types: Home loans from nationalized banks and other financial institutions
Loan Amount: Depends on property value, loan-to-value ratio (LTV), and lender's limits. Can range from a few lakhs to crores of rupees.
Interest Rates: Fixed or floating (adjustable) rates. Rates are influenced by credit score, down payment, loan term, and market conditions. Currently, rates range from 8.5% to 11% per annum.
Repayment Terms: Typically 15, 20, or 30 years.
Features:
Amortization schedule: Shows the breakdown of principal and interest payments over the loan term. Processing fees: Lenders typically charge processing fees, which can be a percentage of the loan amount or a fixed fee. Prepayment charges: Some lenders may levy charges for prepaying the loan before the term ends.
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