Home Construction Loan Eligibility/Qualifications:
Like other loans, for a construction loan, you must be a salaried individual between 21 and 62 years of age.
But unlike home loans, the banks would be lending money to a Proposed project, so there’s always a chance of it not turning out to value as much as it cost. So, to keep their money secure, banks have very strict qualifications for a construction loan:
1. A Qualified Builder/Contractor – A qualified builder will always have a reputation for his quality. Hence, a good contractor can always turn the tables towards you. However, if you are posing in an owner/builder, it could be a problem.
2. Detailed Specifications – For a lender who is putting money on you, it is very essential for him to know where his money will be going. Therefore, banks require a detailed schedule of everything from the ceiling heights to the construction material that would be used in the process.
3.Plot Value Estimation – Even though it is difficult to know the exact value of the project prior to construction, but the buyer must have an appraiser estimate his plot value. Large Down Payment – For the lenders to ensure that you are equally invested in the project they ask for as much as 25% down payment (generally 20%).
4.Income – Like other types of a standard loan, you must also provide the lenders you’re your income and current home information to ensure them that you’re capable of the EMI repayments.
Meeting all these at par with good credit will ensure that your loan gets sanctioned.
Checklist For Applying For Home Construction Loan After you submit an application for the loan along with all the prerequisite documents, the bank/lender will verify it, cross-checking with your income (for EMI paying capability) and the architectural plan for the authenticity of requirement. For a Home Construction Loan, you must provide your lender/bank with three types of documents.o.
Verification Process For Home Construction Loan:
1. Technical Verification
2. Legal Verification
Home Construction Loan Disbursement: The loan payments begin once all the formalities are completed and the property is fully verified. The payments are done in the form of cheques, signed by the operations manager.
Home Construction Loan Limit:
Depending on whichever is lower, you can either get a loan of up to 100% of the estimated construction price or to a maximum of 90% of its market value. for the loan requirement up to Rs. 30 lakh*.
Estimated construction price is always certified by a chartered engineer/architect and duly verified by the Technical Officer. Depending on whichever is earlier the maximum term of your home loan can either be up to 30 years or cannot extend beyond your retirement age. Top Up Loan Facilities For Home Construction Loan A top-up loan is like a bonus. It is a no-restrictions-accompanied additional loan over your other loans for funds or expenses such as education, buying a car or even a vacation.
Eligibility For Top Up:
The sanctioning of a top up loan is done after the lender reviews your payment history and the home loan amount. In case your property has a high market value, your top up amount can also exceed your home loan.
Application & Requirement Document Like other loans, a top up loan can apply for by filling out a simple form, both online and offline. Like all the construction loan, you will have to submit the required documents (mentioned at the start) for the approval process
1. KYC Documents – ID & Address Proof – Pan Card, Passport, Voter ID, Aadhar card (Any One) and Residence Proof – Any Utility Bill, Ration Card, Copy of Passbook (Any One)
2. Property Documents – Allotment letter, Title search report, Sale deed, development agreement, tripartite agreement, Registration and stamp duty receipt, Plot survey document, Sale deed, agreement of sale with the plot developer, property chain title for 40 years, encumbrance certificate for 60 years, Grant deed, Khata extract, Property tax paid certificate.
3. Income Documents – Salaried Individual – Bank Statement, Income Details on company letterhead, Salary Slips Self Employed Professional – Qualification certificate, Income tax return copy Self Employed Non-Professional – VAT or Service tax return copy, bank statement for 6 months
4.List of requisite plans – In addition to the identity proof and plot documents, a local municipal authority approved detailed layout plan of proposed building on site must also be submitted. Along with this, a certified architect or engineer must submit an estimated cost of construction. Based on all these documents, if the bank is sure that the project is safe to lend money for, your loan will be sanctioned.
