Eight Ways to Leverage Your Home..

Real estate can be profitable as an investment, but can you unlock the value of a self - occupied house? 

Here are some ways in which you can tap into your home to generate cash, when needed.

Home Equity Loan / or Loan against Property

WHAT FOR..?:

The borrower can use the loan against property for medical expenses, children’s education, marriage, starting a business, etc... It can only be taken against commercial or /  residential property.

HOW MUCH?

50% to 65 % of the current value of property.

TENURE

 Up to 15 years.

INTEREST RATE:

12 % to 16%

Top-up Home Loan..

WHAT FOR?..

Not specified. It can be used for anything. One can take it from the same bank or / a different one. One has to transfer the loan to another bank or housing finance company (HFCs) if one wants to take additional loan.

HOW MUCH?.

Up to 75% of the property value, minus outstanding loan.

TENURE

 Up to 20 years (age of the person is considered).

INTEREST RATE

It’s 0. 5% to 2%  more than the existing housing loan rate if one wants a top-up loan from the same bank./ HFC

Home Improvement Loan..

WHAT FOR..?

For internal and external repairs of a house and extension of the existing house by adding a storey.

HOW MUCH?

 Up to 85 % (for extension) and 85 % 90 % of the cost of renovation.

TENURE..

 Up to 25 years.

INTEREST RATE..

12% to 15 %

Home Conversion Loan..

WHAT FOR?

 It can be used to acquire another property by selling the existing one.

 An existing loan can also be transferred.

HOW MUCH?..

 Depends on the cost of the new property & your eligibility.

TENURE..

 Up to 20 years.

INTEREST RATE..

9.5% to 12% (Same as that for housing loan).

Short-term Bridging Loan..

WHAT FOR?

 It is  a loan for the period between the sale of an old home and the purchase of a new one.

HOW MUCH?:

 75% to 80 % of the cost of new property.

TENURE

1 year to  2 years

INTEREST RATE

 11% to 14%

Loan Against Rent Receivables

WHAT FOR?:

Not specified. The borrower can use the money for any purpose.

HOW MUCH?

 60% to 80% of the net rent receivable over the lease period.

TENURE

 10 years or the unexpired period of lease, whichever is less.

INTEREST RATE:

13.25 % to 14.5 %

Property Overdraft Account..

WHAT FOR

 Not specified. The money can be used for any purpose according to the borrower’s discretion.

HOW MUCH?

 Up to 70 % of the value of the property.

TENURE

 1 year to 5 years

INTEREST RATE

 12% to 14%

Reverse Mortgage..

WHAT FOR?

One has the option of a monthly line of credit or /  lump sum, which can be used for any purpose. The only criterion is that the person should be above 60 years of age.

HOW MUCH?

 50 % to 65 % of the current value of property.

TENURE

 15 years to 20 years

INTEREST RATE.

12 to 15%

Source: Economic Times

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