Buying a new or under-construction house has been a common trend in India. However, there is a large market for property resale, and buying old or used homes quickly becomes an accepted norm. Moving into a home which you can call your own gives you the highest level of satisfaction.
If you plan to buy a used apartment, arranging a home loan will not be an issue. Many banks and financial institutions offer home loans for the same. Here are the various aspects you need to know while applying for a home loan against a resale flat.
Loan eligibility criteria
- The applicant’s minimum age must be 18 years at the time of the sanction of the loan.
- The maximum age of the applicant during the repayment of the loan must be below 65-70 years, which can vary from lender to lender.
- The borrower must have a good credit score, preferably 700-750 points or more.
How to apply for a home loan?
- You can apply for the resale home loan both individually or jointly. The co-applicants can either be the spouse or any close family members.
- These home loans can be applied through online and offline options.
- Once you have applied for the loan, a certified chartered engineer may survey the resale flat or home you wish to buy. If done, the engineer will prepare a report and send it to the lender. They will calculate the valuation, amount and you may receive 70%-90% of the valuation amount as your home loan, depending on the loan to value ratio of the lender.
Home loan terms
The home loan interest rates and tenure depend on a variety of factors such as,
- Borrower’s profile
- Borrower’s age at the time of loan maturity
- Scheme of repayment
- How old will be the property at the time of loan maturity
Type of home loan interest rate – The interest rate is determined at a floating or fixed rate, or the lender makes a combination offer. The home loan interest rates for a resale flat can start from as low as 6.9%, depending on the prevailing rates at the time.
Documents required for the approval of the home loan of resale property
- Home loan application form correctly filled and signed
- Passport size photo of the applicant(s)
- Identity proof
- Residence proof
- Business establishment proof
- Income proof
- Property documents
- Bank statement
Resale apartments don’t come much cheaper than new ones. If everything fits, soon you can have a home ready to move into! Therefore, use a home loan EMI calculator to figure out the EMI burden on your monthly budget.