Borrowers generally avail of 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 may get slightly difficult. However, buying from the resale market has its advantages such as you may be able to close the deal in a more reasonable price range. Secondly, you can move in as soon as you want.
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 funds 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 a loan application or not and what Home Loan amount to sanction based on factors including, but not limited to 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's age matches its condition and there is no risk involved for the lender in extending a loan 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.
In conclusion, yes, it is possible to take a Home Loan to buy an already-built home.
However, if you are planning to apply for a Home Loan to buy an already-built home, keep these 3 things in mind:
- Check if there are any 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 assessed 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.
