Looking to buy or construct your dream home? Well, you may also be looking through different ways to fund your purchase. A home loan or mortgage loan is one of the most popular and best ways to finance this dream. The loan is offered by leading financial institutions and lets you borrow a significant amount backed by an assurance of making timely repayments through an EMI structure.
There are different types of home loans that you can choose from. The most suitable one for you will depend upon the amount that you can pay and the period for how long you wish to pay the installments.
Read on to know the different types of home loans that you can avail of and one that is right for you:
Home loan with a fixed interest rate – This kind of loan provides you with a fixed rate of interest on your total loan amount. It is one of the most preferred kind of loans as it brings with it a sense of predictability. The rate of interest remains constant throughout the loan tenure. The payable amount remains constant irrespective of any fluctuations in the market economy.
Home loan with an adjustable interest rate – As opposed to the home loan with a fixed interest rate, this loan allows you to pay with an adjustable rate. The rate you pay will fluctuate depending upon the market. In times when the market remains constant, you may have to pay up a fairly low price in interest. This loan option is a preferred choice among people with a bad credit record.
Bridge loans – If you wish to move into your new home, before selling you old one, then the bridge loan is a suitable choice for you. With this loan, you can move into your new home while putting your old home on sale. Once the old home is sold, you can pay off the mortgage. Bridge loans make for a good choice if you are in a hurry to move into your new home.
Home construction loam – As the name suggests, home construction loans are offered for serving the purpose of constructing a home. The procedure involved in availing this loan differs from the usual kind of home loan. The cost of the land may or may not be included in the total loan amount depending on when it was purchased.
While the process of finalizing the home you desire is fairly straightforward, getting a loan can get complex if you do not follow a process. Work with your preferred financial institution to arrive at the right home loan pick for yourself.