Home Loan Vs Land Loan: What’s the difference? And how wisdom properties will guide you to get loan from bank

A home loan is among the most crucial things you should understand before making the purchase, whether you're a novice or seasoned home buyer. While many people prefer to purchase a house or apartment that has already been built, many others opt to purchase a residential piece of land, either as an investment or to build a home of their design.

At this point, you must choose between applying for a plot loan or a home loan.

What distinguishes them, then what are the advantages of each?

A home loan should only be used to purchase a residential property that has already been built or is currently being constructed, irrespective of whether it's a mansion or an apartment. A plot loan, also known as a land loan, should only be used to purchase a piece of land that will be used to build a house.

Consistencies of a land loan

Consider the following before you seek a land loan:

1. The parcel of land needs to be situated inside the corporate or municipal boundaries.
2. Land for agriculture cannot be purchased with a loan.
3. The land shouldn't be situated near industry or a community.
4. The loan's term may last up to 15 years.
5. Only loans used to build the property just on the land are qualified for a tax deduction, and that tax cut can only be used once the building has been completed.
6. You will receive a loan-to-value (LTV) ratio of up to 80%, which also means a loan for up to 70% of the price of the asset will be supplied.
7. You can obtain a plot loan to acquire a plot either through direct allotment or even to purchase a resale plot dependent on the lender.

Specifications of a mortgage

1. To purchase real estate anywhere in the world, you can obtain a home loan.
2. The loan's term may last up to 30 years.
3. A tax deduction is available.
4. According to the lender, the loan-to-value (LTV) ratio might range from 60% to 90% of the property's cost.
5. If a husband and wife take out a combined home loan and each has their source of income, they can each claim a revenue tax deduction for both the interest-bearing and principal portions of the loan.
6. You can obtain a home loan from such an approved builder to purchase an apartment, bungalow, as well as row house depending on the lender.
7. You can also obtain a loan to purchase real estate from state development agencies, cooperative housing societies as well as apartment owners' organizations that are already established, or from privately built residences.

Home loan and land loan similarities

Similar eligibility requirements, interest rates, as well as application procedures apply to both home loans and plot loans, though they may vary depending on the bank or NBFC you apply through. Whether you are applying for a mortgage or a plot loan, your credit score is a critical factor in the process.

Whether you're purchasing a ready-to-move-in residential unit or one which will be built later to meet your circumstances, knowing the features and functions of both a home loan as well as a plot loan can help you determine which one would have been best suited to one's needs.

Why Purchase from Wisdom Properties?

A reputable real estate developer in Chennai, Wisdom Properties offers residential lots, luxury villas, farmland, and other industrial land parcels in prime areas on the outskirts of Chennai.

The idea that starting with a large sum of money is necessary for real estate investment is a frequent one. Understanding the various real estate financing decisions is essential for making wise investments.

Knowing the financial side is essential because it has a significant impact on how you fund a certain deal.