There are various Housing Finance Institutions providing a range of loans. Loans which can be repaid through EMI(Estimated Monthly Installments). And there are lots of incentives too for opting for these services. Scroll down for understanding the same and some tips on Housing Finance related terms and issues

Home Purchase Loans
Basic home loans for purchase of a new home.

Home Improvement Loans
Loans given for implementing repair works and renovations in a home that has already been purchased.

Home Construction Loans
Loans provided for the construction of a new home.

Home Extension Loans
Loans availed for expanding or extending an existing home. For example addition of an extra room, etc.

Home Conversion Loans
Loans provided for those who have opted for a home loan for their present house of stay and wish to purchase and move to another home for which additional funds are required.

Land Purchase Loans
Loans made available for purchase of land for both home construction and investment purposes.

Bridge Loans
Loans designed for people who wish to sell the existing home and purchase another. The bridge loan helps finance the new home, until a buyer is found for the old home.

Balance Transfer
Loans offered to help pay off an existing home loan and avail the option of a loan with a lower rate of interest.

Refinance Loans
Loans provided to pay off the debt incurred from private sources such as relatives and friends for the purchase of present house of stay.

Stamp Duty Loans
Loans sanctioned to pay the stamp duty amount that needs to be paid on the purchase of property.

Loans to NRIs
Loans tailored to the requirements of NRIs wishing to build or buy a home in India.

EMI
Equated Monthly Installment or its abbreviated form EMI is the monthly sum payable to the lending institution till the loan money is paid back in full. It consists of a portion of the interest as well as the principal.

Incentives
a) Some companies sanction the loan without requiring you to identify a property as a prerequisite for eligibility.
b) Free accident insurance
c) Discounts
d) Waiving of pre payment penalty
e) Waiving of processing fee
f) Free property insurance

Terms

Rate of Interest
Interest rates are generally range from about 12.5% to around 16%. The interest on home loans in India is usually calculated either on monthly reducing or yearly reducing balance.

Monthly reducing
In this system the principal on which interest is paid reduces every month as the EMI commitment is fulfilled.

Annual reducing
In this system the principal on which interest is paid reduces every year with the payment of the EMI. Annual reducing is a comparatively expensive option to monthly reducing.

Repayment period options
Repayment period options range generally from 5 to 15 years.

Fixed rate of interest
Some institutions have a fixed rate of interest which remains unchanged for the entire duration of the loan. It has its pros and cons as it safeguards against interest hikes but also stands to lose in case of an interest rate fall in the market.

Floating rate
Rate of interest that fluctuates according to the market lending rate. This too has it’s advantages and disadvantages as there is the risk of paying more in case the lending rate goes up and benefit if the rate goes down.