Home Loan Disadvantages

Acknowledgement

It gives me deep pleasure in acknowledging the valuable effort extended to me by various personalities in completion of my project because every project needs inspiration, guidance and help at every step. For this, I would like to thank Dr. Lakhwinder Singh, Head of department, for giving me opportunity to work under Dr. Fulbagh Singh, Department of Commerce, Guru Nanak Dev University, Amritsar. I offer heartfelt gratitude to Dr. Fulbagh Singh for his keen interest, suggestions, extreme support and invaluable guidance during the course of this project. I am also thankful to respective respondents who in spite of their busy schedules extended to me their full

Advantages of Home Loans

 The need for home loans emerges not because property prices are increases but because home loans become long-term saving way regarding situations. By this the common man saves money in the long run.

 Due to increase in real estate prices, more people are opting for home loans to acquire their dream home.

 For a middle class person who makes home his own resources or funds is a very difficult task and it takes many years to be completed. At that time period the prices of construction material, labour, etc. also increases. So, it is in interest of a person to take the home loan and complete his house with comparatively low cost.

 Attractive offers provided by banks or financial institutions is the another major reason for why people are opting for the home loans.

 Home loans also act as good savings instrument. According to industry estimates, the long term average return in investing in a home is double than the average cost of borrowing funds from the market today. So, it is beneficial for a borrower to invest rather than borrow from the

These loans can be used to purchase a new residential property or an old house from its previous owners. In this type of loan, lenders usually finance up to 85 percent of the market value of the house. These loans are given either on fixed interest rates or floating interest rates or as hybrid loans. Most of the banking institutions and housing finance companies provide this type of loan.

Home Construction Loans

Home Construction Loans can be availed by those individuals who want to construct a house according to their own choice instead of purchasing an already constructed house. The loan application and approval process for home construction loans are different to some extent from the approval process of those commonly available housing loans. Thus, before applying for this loan the borrower has to make a rough estimate of the cost that will be incurred for the construction of the house and then apply for the loan with the same amount. The lender then takes over the estimated cost from the borrower and then analyses the application to decide whether to sanction or not to sanction the loan. The approval or disapproval of the loan is communicated by the lender to the borrower. The loan amount may be disbursed to the borrower at the single time or in several installments according to the gradual improvement in the construction of the house. Banks like