Different Types of Real Estate Loans

In view of what it brings in return, real estate business is very lucrative. If you plan real estate investment, you may require a huge block of money which may not be possible to afford. That makes it more likely for the prospective investors to apply for a bank loan. The banks require the applicants to submit a well-prepared document that details the plan, partnership, architectural layout, potential profit as well as management strategies. As the banks have to put a lot of liquid resources at stake for providing real estate loan, so they need a lot of documentation to safeguard their investment.

How to Obtain a Real Estate Business Loan?

Only a few of us can afford to purchase a real estate asset with what we have. Real estate business loan comes as a good help to top up your affordability and allows you to make a purchase of immovable properties. In absence of any cut and dried rule, you can purchase commercial properties or residential houses with available funds. It means there is no binding on your buying a property, no matter whether you will use it for residential purpose or commercial activities.

Available real estate property loans can be classified under four heads, Refinance, Private, Commercial and HDB. Let us touch upon all of them one by one.

  • Refinancing of home loan is a good way to save a substantial amount on your repayment. Refinancing option is available with both private and HDB home loans. Eligibility criteria of home loan refinancing differ from one lender to another. So, ask your lender which requisites he wants you to have for a particular loan scheme.
  • Private home loan is of different types and more flexible as compared to HDB funding. This option works best for those who are non-citizens or have their income exceeding the maximum limit of earning for HDB home financing. Numerous mortgage companies provide home financing packages.
  • HDB or Housing and Development Board requires the potential home loan borrowers to submit some particular information including income details and proof of citizenship.
  • Commercial real estate property loan is s different genre that helps people with funds to purchase commercial properties like restaurants, hotels, nursing home, bars, garment shops and likes that can be strictly used for production and sale.

Real estate financing is definable under other categories including home equity loan of credit, residential equity loan, residential lot loan and recreational property loan. Home equity loan of credit refers to a type of loan that requires the borrowers to use their home as collateral. According to the contract, the mortgagee is obliged to lend the maximum amount within a certain period agreed upon.

Residential equity loan allows the borrowers to get loan against the equities tied up to their home. Residential lot loan is granted for the purchase of a residential lot that can be used for your home construction purpose.

Recreational property loan helps a borrower with requisite funds to buy or refinance a recreational property for personal use only. So, you can see that there is a good variety of real estate property loans to help you purchase or refurbish a residential structure or commercial building.