Process on Applying Home Construction Loan
Home construction loan is availed for building an already constructed, under construction or under-launch-stage house. You may also seek home construction loan to construct a house on open land as per your desires. The process of applying home construction loan to the bank is simple and needs proper documentation and compliance from your side.
One of the commonly availed types of home loans is the home construction loan. You are supposed to do proper paperwork of the same for getting quick approval of your home loan application made to the bank.
Keep ready your documentation
Need not to remind that you need to go to the sales office of the bank for making inquiries regarding home construction loan. But you must get yourself familiar with the documentation needed. In addition to the documents, you must be aware about the situations which can create obstacles in the approval of your home loan application. Let us first understand the documents needed.
You need to get qualified for a home construction loan. You must select the project beforehand. You are required to submit the basic documentation about your identity, current residence, bank statements, income proofs, number of dependents and income of your spouse, if needed. The employment proofs must be added. The next part is about your house construction project. You must not fail to acquire all the relevant details regarding the construction project in which you are intending to buy the house. If you are going to construct a house on a plot, then submit a rough estimate of the projected costs.
You must give details regarding the builder and references so that the bank feels that the construction project is genuine and is not involved in any scams. If the developer is a known person, then you have the added advantage. Banks are familiar with the renowned construction developers and builders. In case of open plot, the title deeds and license details are also required for verification purpose.
Plan your rough estimates carefully
It happens that bank does not provide entire loan amount to the applicant. It depends on the verification process and the rough estimates provided by you. Your rough estimate must be true and accurate enough. There must not be hidden or miscellaneous costs. Banks will not entertain applications with random budgets.
Take care during construction on plot
If you intend to construct a house on open land, then note that there are two possibilities. If the land is purchased one year prior to the construction, then it is included in the cost of your house. And if the land is purchased before one year, then the cost of land is not included in the price of your house.
Receipt of Loan amount
It depends upon the bank to provide you loan amount in installments or in lumpsum. Some banks give the loan amount on the basis of construction progress. Hence, while applying for loan, you must include elements such as construction site, house designing costs and building costs.
Hence, if you are performing a proper research of legal and financial elements, then you can get approval of your loan application easily.
Recommended Read :
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- Home Loan Pros and Cons Benefits Risks of House Loan
- Home Loan Terms in India
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- What is a Joint Home Loan How Does it Work?
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To apply for a home loan one has to have all the papers clear. So is the case for applying home loan for construction. The various papers involved like the income proof of one or both the spouse, no of dependents, the basic personal identification. The second part is the proof of the construction site, the builders or the developers involved.