How to get a home loan to build a house?

Ghar Banane Ke Liye Home Lone Kaise Milta Hai

Home Construction Loan: What is the eligibility

If you want to take a loan to build a house, then the applicant has to fulfill the following qualifications:

Age:18 to 65 years

Residence Status: Must be Indian or Overseas Indian (NRI).

Employment: Self employed or employed

Credit score: more than 750

Income: Above Rs 25000 per month

Which documents are required?

Apart from the documents of Know Your Customer (KYC) and income, you will need to show the documents to the lender to get the house constructed on the land owned by you, which will prove your ownership of the land. This piece of land can also be a freehold plot or a plot allotted by a development authority like DDA, CIDCO. You can also get loan against leasehold land. But the lease should be for a longer period. You will also have to submit a no encumbrance certificate regarding the property.

Apart from the plot documents, the plan and layout of the proposed house will have to be submitted, which has been approved by the Gram Panchayat or local body bodies. You will also have to give an estimate of the cost of construction, which has been certified by an architect or civil engineer. Based on these documents, if the lender is satisfied with your eligibility and the cost submitted, it will approve your home loan based on the terms and conditions.

Margin money

Like any other home loan, the borrower will have to pay margin money for the construction of the house, depending on the amount of home loan sought. If the plot has been taken recently, then the cost of the plot is considered while calculating your contribution.

The value/cost of the plot is not taken into account while calculating your contribution, if it is received by you as an inheritance or gift or if it has been purchased long back.

Disbursement of Loan

The disbursement of the construction loan will be done in parts as the money will be released based on the progress of the construction. The same process is followed even when you book an under construction flat with a builder. Although the lender No one will give money unless you have agreed as to your contribution and produce proof of that. To avail the benefit of payment from the bank, you need to submit photographs and certificates of the house to an architect or civil engineer regarding the completion stage of the house.The lender can either rely on the certificates and photographs submitted by you, or entrust one of its technical persons to do the verification. Hence, if the construction is completed quickly, the lender will pay the money faster.SBI, HDFC Ltd., ICICI Bank etc. are very active in the construction loan segment. However, not all lenders who offer home loans also offer construction loans. Some lenders are not comfortable giving loans for self-contained properties.

SBI home loan rules for construction

Public sector bank SBI offers 'Realty Home Loan' for construction of a house. You can also take a loan to build a house on a plot under SBI Realty. Those who are taking a loan should ensure that the construction of the house is completed within 5 years from the date of sanction of the loan. The maximum loan amount a customer can get is up to Rs 15 crore and the repayment period will be 10 years.

HDFC Home Loan Rules For Construction

HDFC Bank of the private sector also gives loans for construction of houses on freehold, plots allotted by any development authority and leasehold plots. Currently, HDFC is offering construction loans at the rate of 6.95 per cent. However, to get the best interest rate on a construction loan, the customer needs to fulfill several conditions.

Note that home construction loan and plot loan are not the same. Plot Loans in HDFC is a separate product. Rates on plot loans are different from home construction loans. Paper work is also different in both the loan applications.

keep these things in mind

Customers who are planning to take a construction loan should be aware that not all lenders offer loans in this category. Therefore, before going to the nearest branch, check the website of the bank whether they give construction loan or not. It should also be kept in mind by the customers that banks do not give the full amount of the loan at once. It depends on the progress of construction.

Consider these factors before applying for a home loan

Calculate EMI: Customers applying for a home loan will have to pay a fixed amount every month to the bank as EMI, which will include the principal amount and interest. So calculate the EMI you have to pay and compare it with your income. With this you will be able to decide whether you will be able to repay the loan with the income or not.

Interest Rate Banks offer different types of loans and their interest rates are also different. The longer the tenure of the loan, the higher will be the interest to be paid. Therefore, customers should choose the right interest rate and tenor so that they can repay the loan without any financial burden.

Right Institution:Many financial institutions offer loans for buying a new home. It is important for you to choose a reliable and secure institution to avail the loan.

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