Building a dream home on your own plot of land?

A plot and home construction loan can help finance the building of your dream home just the way you wanted it.

Many people dream of having their own villa or bungalow. In their imagination, the house is big and airy, with large rooms and spaces that provide a comfortable living experience. There is a shaded garden or backyard, a separate car parking space and a dear little walkway leading from the road to the house.

This dream can become a reality for those who show the foresight to purchase a plot of land anywhere in the country. The plot of land can hold their dream house, which can be built as per their aesthetic preference. However, buying the plot is not easy – the buyer may not have the necessary finances on hand to buy both the land and then to construct a house on it. When this happens, it is time to take a land purchase loan.

What is a land purchase loan?

It is a loan product that helps potential home builders finance the construction of their dream home on their own plot of land. It facilitates the purchase of non-agricultural land for the purpose of building a house on it.

The best housing finance companies in India offer land purchase loans at competent rates of interest and with a host of benefits to boot. The loan helps the home buyer buy the land of his choice, basis a thorough vetting by the financial institution. The land is checked for municipal and Government permissions, market value, byelaws, and buyer’s income profile, among other factors.

Further to the land purchase loan, the financial institution can also offer a home construction loan that helps the borrower build their dream house from start to finish.

The plot and home construction loan is disbursed in periodic phases, over the construction cycle of the house.

Are there any benefits of taking this loan?

The best housing finance companies in India offer land purchase loan and home construction loans at competent rates of interest. The loan product is quite affordable and the application process is quite simple. Once the applicant and the land/ready plot is evaluated, the approval is granted quite quickly. The applicant can also check their eligibility before applying for the loan, on the financial institution’s website.

The loan tenure is up to a period of 30 years if the applicant is a salaried individual, and 20 years for self-employed individuals. Besides, there are no pre-payment charges if the applicant takes a floating rate of interest.

3 Major Reasons You Should Buy a House to Call Your Very Own

Owning your own home is a big reason to be happy, since it not only enhances your future financial security, it also gives you the pride of ownership.  Once you buy a house of your own, you can focus on fulfilling your other needs. like saving for your child’s education or marriage. Easy and quick availability of loans for homes and lower interest rates offer you the option of investing in real estate and buying a house for your personal use.

Positives of Buying a Home

The debate about owning a home versus living in a rented one has been an ongoing one, with the final decision depending on the individual circumstances, including the person’s income, family size, the nature of their job and several other factors. Buying a home involves several complex decisions, including arranging the necessary funds followed by the actual transaction, its tax impact, and its impact on your other expenses, etc.

• Pride of Ownership: In the Indian society, owning a house is considered a matter of pride and indicates that you are financially secure. This proud feeling of owning a house is much better than living in a rented home, which brings with it several tensions. Owning a home means you can decorate and maintain it the way you want to, attach permanent fixtures according to your needs and tastes. In contrast, if you live in a rented home, you need to follow the instructions given by the landlord, besides living in a house that has been designed and maintained according to his needs and tastes.
• Appreciation Potential and Financial Security: Owning your own place provides a sense of security, especially financially. You know you do not have to worry about paying rent in case you lose a job or are short of money. Also, in case of dire emergencies, you can always sell off or mortgage your home to raise the necessary funds. Lastly, real estate has good appreciation potential over the long run and can be sold off to generate some good profits. Investment in a home also offers a good hedge against inflation.
• Easy Funding Options Available: While buying a home requires you to collect all your savings and use them, easy availability of loans for homes in recent years has changed the situation. The Indian government has introduced several measures and schemes to boost the housing segment and is aiming to provide affordable housing to everyone by 2020. Some of the measures include lowering of interest rates, simple terms and conditions, and quick processing of loan applications. All this has made buying a home easier and within the reach of people who otherwise could not afford to make outright purchases of houses. Taking a home loan means you just have to divert funds that you were using to pay rent towards the EMI of your loan.

While there are a lot of benefits of buying a home, the decision should be taken considering the time for which you are planning to stay in that city (a time frame of at least ten years is required to make such an investment), have adequate savings to make the initial down payment, your other critical goals for life, etc.