Owning a House Is a Celebration- Purposes For Which Housing Loans Are Sanctioned
Why Housing Loans are important?
Shelter is one of the three basic needs of life, the other two being food and clothing. With the population explosion and migration of unemployed people from rural areas to industrial areas in search of jobs, the real estate prices have skyrocketed. The importance of Housing loan has become multifaceted over a period.
• Without a housing loan vast majority of the population cannot own a house.
• The Housing loan market plays a major role in keeping the real estate segment ticking.
• House construction and related activities offer employment opportunities and economic development.
The power of housing sector to provide thrust to the economy is a well-accepted fact and hence governments have always been encouraging the sector through various incentives like tax exemption for interest paid, deduction of repayment from income etc.
What are the purposes for which Housing loans are sanctioned?
Various banks and financial institutions have formulated schemes considering genuine requirements that arise during the process of owning a house. The purposes for which an individual seeks financial support can be grouped as shown below:
• For acquisition of land and construction of a house in that land
• For construction of house in the already owned land
• For acquisition of ready built house/flat/ villa
• For acquisition of flat /villa under construction
• For purchase and completion of incomplete houses
• For purchase of land for subsequent construction of house
• For repair / renovation / remodeling / extension of existing house / flat/villa.
• For construction of additional floor in the already existing house.
• Reimbursement of debt incurred for construction/outright purchase/ furnishing of a new house purchased/built without any loan from any institution
• For purchase of house plots under special Scheme – Scheme formulated by Government agencies or co-operative societies
• For takeover of already existing housing loans from other banks/financial institutions with or without additional loan/reduction in interest rates
• Loans to an individual to acquire full rights of a family house during partition among members of family.
For availing Housing loans, individuals have to satisfy the stipulations by the Bank/ Financial institution.
