As life progresses, you eventually get married and have children. This demands more space, and you may want to extend your home. Depending on your financial circumstances, you might build one. You might be fortunate to have the resources to start with a home extension. The ability to satisfy the requirement for the additional room can be met with a Home Extension Loan. Any person may submit an individual or joint application for a Home Extension Loan with a housing finance firm.
What is a Home Extension?
A Home Extension is when you add a second story, a balcony, a room on your terrace, or a home office. The need for a home extension occurs with the expanding family.
What is home extension finance?
A Home Extension Loan is the sum housing finance provides you to back the cost of building a new room. You should create rough drawings for extending your home, pick the best designer, and obtain a precise estimate of the total expenditures before deciding on the loan amount. In this manner, you’ll only take out loans to pay for home extensions.
With a Home Extension Loan, you can pay for the cost of the extension project and the services of carpenters, painters, plumbers, electricians, contractors, architects, plasterboard experts, etc.
Key attributes and advantages of Home Extension Loan
Home Extension Loan has many benefits and some of them are mentioned below –
No need to move
Adapting to a new home and environment can be difficult. Additionally, you can solve the space problem without moving to a new place. And this is what benefits you when using a house expansion loan for managing the cost of extension.
Minimal service charges
On your loan application for in-house extension finance, a small processing fee is assessed based on your loan amount. It means with just a nominal fee, you can finance the expenditure of your home extension with easy EMIs.
Simple to acquire
Home Loans for extension have a simple application procedure and require a few paperwork, such as evidence of address, income, employment, etc. You can submit your application entirely online.
Lenders typically finance up to 75% of the total extension expenses. Similar to housing loans, loans for home extensions have lengthy terms, and you can easily repay the money with affordable monthly installments (EMIs) on your demands.
A tax deduction of up to Rs. 2 Lakh is available under Section 24(b) of the Income Tax Act of 1961 on the interest you pay on your house extension loan.
Who is eligible to apply?
The home expansion loan amount is established by considering several variables, including –
- Age of the candidate
- Educational background of the candidate
- Income stability and continuity of the candidate
- Number of debts of the applying candidate
- Income of the co-applicant
Home Extension Loan Rates are due for both individual and collaborative applications. The property’s owners should be the co-applicants. But not all co-applicants can be co-owners. Co-applicants are typically close relatives.
What is the Loan Period?
You have a maximum duration of 20 years to spread out your loan payments. The loan’s terms rely on the borrower’s profile, such as –
- Age when the loan matures
- Age of the property
Particularly, you can choose the repayment options you think is suitable as per your budget.
Amount of the loan made
Generally, housing finance companies sanction loans for 70 and 85% of the property value. And the final loan amount offered to the borrower is based on – age, repayment capacity, creditworthiness, loan term, credit history, and other considerations.