If you are wondering whether a borrower can take a home loan on an already built home? The answer is yes.
Borrowers generally take home loans to buy two kinds of properties - newly constructed properties that have only been recently built or old resale homes.
While it is quite easy to avail of a home loan for a newly constructed property, getting a Home Loan to buy an old and already constructed property is slightly difficult. Buying from the resale market has its advantages. The biggest advantage of buying an old house is that you will be able to close the deal in an affordable price range. In comparison, newly constructed homes, especially those located in a central location and having all modern facilities are quite expensive and may end up drilling a hole in your pocket. Secondly, old homes are usually located in better localities and you can move in as soon as you want.
However, lenders sanction loans on already built homes, especially old homes, after properly assessing the property. If the property is in a dilapidated state and is too old, lending money may be too risky for the lender. Thus, when it comes to taking a Home Loan against an already built or old home, lenders decide whether to approve loan application or not and what Home Loan amount to sanction based on the age of the property, the condition of the property as well as the age of the borrower.
So, when you apply to take a Home Loan against an already-built property, the first thing that your lender will do is send an expert to assess the physical condition of the property. If the audit expert thinks that the property age matches its condition and there is no risk involved for the lender in lending money to the borrower against the concerned house, your application will move to the next level where the lender will hire a structural engineer to assess the physical condition of the property.
If the property for which you are taking a home loan gets the structural engineer's approval, your lender will move to the next step of verifying documents and checking whether you meet their other eligibility requirements. If the structural engineer thinks the property is in bad condition, your loan application may get rejected right then and there.
In conclusion, yes, it is possible to take a home loan to buy an already-built home. However, be as prepared as you can to ensure your home loan application gets approved, which in this case requires careful planning and preparation.
If you are planning to apply for a Home Loan to buy an already-built home, keep these 3 things in mind:
- Start by looking for defects in the home you wish to buy. If you see flaws or structural issues, get them fixed first before applying for a Home Loan.
- Get the property assed by an expert and all the property papers checked by a lawyer. Make sure the property does not have a lien and the previous owner has cleared all dues and EMIs on it.
- Make sure you have all the documents ready with you before beginning the Home Loan application process.
*Terms and conditions apply.
