Do you want to lease or buy a new property? If yes, the market has several options for finance. However, exploring such options give rise to practical questions. Like this one: What is the difference between a home loan and a land loan?
In simple words, a home loan is an amount of money you borrow from banks or financial institutions. This home loan definition applies to house loans too. The purpose of this loan is to purchase a house or residence. Borrowers can select a suitable interest rate scheme.
Land loans are different from home loans in one aspect. This type of loan allows a borrower to make money to purchase a plot of land. This money is available from banks or other financial institutes. Land loans are of three basic types: – Raw – Improved – Unimproved
You might be wondering why there’s a fuss about the home loan vs. land loan query. Even though the definitions seem straightforward, there are certain similarities. The following points are nearly the same for both home and land loans: – Application process – Terms and conditions – EMI options