Do you know you can get home loan to buy properties in resale market too?
Banks give loan for buying properties in resale market, but, before sanctioning the loan amount, banks conduct many types of investigations. How is the loan amount decided?
Before disbursing a loan, the bank assesses the location and condition of the house. If the construction has been approved by the local administration or authority, then there should be no issues in getting the loan approved. The age of the house does not play any role in determining the amount of loan sanctioned.
Banking expert Suresh Bansal says, “The amount of home loan approved depends on two factors. First, the market value of the property, and second, the financial condition of the buyer. The age, credit history, monthly income and the ability to timely repay the loan of the buyer will decide how much loan they are eligible for. However, the bank first conducts a valuation and legal investigation of the property. These checks are not waived off under any circumstances”.
How is valuation done?
To ascertain the value of an old property, banks seek professional help. For this, they have hired agencies. Some banks also keep a construction expert on their professional panel. Before disbursing the loan, banks determine the property’s value through them. The condition, location and prices of properties nearby become the basis of assessing a particular property. Depending on the report of the valuation team, the loan amount is approved
Legal Report
Banking and housing finance companies ensure loan paybacks before giving a loan. To ensure that no individual can pledge a contested or fraudulent property and get a loan against it, banks conduct a thorough legal investigation of the property. This enquiry includes lawyers as well. The legal team scrutinizes the previous chain of property’s ownership i.e. verifies the sale deed and also how many times has the property been sold previously. The team also verifies whether the property is entangled in a legal dispute. Only when all these details are cleared, the bank progresses with the loan file.
How much will be the loan amount?
You can get a home loan even for purchasing a flat in an existing society. However, make sure you thoroughly evaluate the condition and location of the house before buying it, so that you don’t end up regretting your decision later.