Banks often ask for additional verifications when sanctioning home loans for under-construction property, unlike a ready-to-move or resaleable property. Therefore, the documentation process followed while processing a home loan for an under-construction property is different.
Applying for an under-construction home loan
When you are on the lookout for buying a property, you may be persuaded by the extravagant advertisements that give you a view of swanky housing projects. As a buyer, you need to ensure that the promises are likely to be delivered.
- Visit the project plot and scrutinize every detail, including the work progress and quality.
- Check out the record of the builder regarding project delivery.
- Get the assurance that the layout of the flat and carpet area mentioned in the property papers is corroborating.
- Verify that the builder has all the essential property papers to build the property at the said place.
- Make a proper valuation of the property and estimate the property’s future price.
List of documents required for getting a loan for under-construction property
Verification of documents is mandatory before the bank sanctions a home loan for under-construction property. Below is the list of copies that you can keep handy to conclude your application process without any hindrance.
- Complete documents of your KYC (Know Your Customer).
- Documents to support your income proof.
- Khata certificate and khata extract.
- Deed of Sale.
- A duly registered and stamped agreement was made with the builder.
- NOC (No Objection Certificate) from the builder.
- Letter from the builder specifying the recent progress of construction.
In case the project isn’t a registered one, ask your builder to furnish the following documents:
- One copy of the agreement with the builder.
- One original copy of the money receipt issued by the Sub-Registrar.
- A proof of Own Contribution Amount.
- The builder acknowledged one copy of the authority letter.
- One bought a copy of the authority letter addressed to the Sub-Registrar.
You should also find out if the builder has a tie-up with any banks or home finance institutions. If yes, you can get all the verification documents from such a bank or institution. Apart from getting the documentation right, a homebuyer would also get affordable home loan interest rates. This can be checked by using a home loan EMI calculator. So, the home loan must be sought from the institution that provides the best loan offer.
Although the process of documentation for an under-construction home loan is longer than a ready-to-move property, under-construction properties are more affordable. If you choose your property wisely, you can save the purchase cost of your home.