Loan for construction purposes basically means that once you have purchased the home and now you want finance to undergo construction or expand your house. It may include any type of construction you want to undertake like constructing more rooms or adding more floors in your existing house. Sometimes, you may have a plot near your home lying vacant and you want to extend the structure of your home to include the area. It also happens sometimes that you many need to redo the interior architecture of your home so as to make it more suitable according to your present requirement.
More often than not, home loans are sought for fresh construction of a house on the plot you might have inherited from your ancestors or have purchased recently. Before applying for home loans, you must estimate the amount required for the construction, the time needed to complete the project and the expected increase in the rate of building materials and other cost factors during the entire course of construction. Then you should proceed towards contacting officials of different banks and finance companies to evaluate and compare their home loan procedures, the rate of interest they charge and the mode of loan repayment.
The lender or the housing finance companies, which offer loan for home construction, has to know the story behind the construction you plan to undertake. If you already own the land on which you want to undertake construction then that is considered as equity on the construction loan. This is a kind of loan against the property that you are already in possession of.
Until a few years back, not many private banks were offering loan for house construction. There were, however, only nationalized banks, such as State Bank of India, Canara Bank, Punjab National Bank, etc who used to provide such facilities. Now the scenario has changed completely. The entry of global players in Indian market has increased the flow of cash and opened a new chapter in the realm of home loans. To know the bank in your city which offer loan for home construction, browse the site indiahousing.com.