Home Construction Loan 101 – Breaking Down the Basics

Understanding the basics of a housing loan in India is vital for potential borrowers to plan efficiently. Here are some prerequisites and things to consider for a home loan that they must know to take the right steps. 

Prerequisites for Home Construction Loan

Individuals must keep the essential prerequisite ready while applying for a housing loan: 

1.Keeping the construction plan ready

Financial institutions ask for a home construction plan while evaluating loan applications. So, it is essential to integrate all the intricate details in the plan to ensure credit approval. 

2.Keeping the property documents ready

Borrowers must prepare the property documents before applying for home loan. This will help them to complete the application process quickly and smoothly.

Additionally, borrowers must know certain things before applying for a home construction loan. 

Things to know about a home construction loan

Below are some things that an individual must know regarding a home construction loan:

(a) Borrowers cannot change the construction plan after getting loan approval.

(b) Financial institutions will disburse the home loan amount only after a borrower has completed the down payment.

(c) Lenders will not sanction any money for covering the cost of interior decoration of the house.

(d) If there is a considerable delay in the construction, a financial institution can halt credit amount disbursement. 

(e) Individuals will have to pay pre-EMI during construction of the house.

Noting the above pointers is essential while applying for a housing loan in India. Additionally, individuals should also research thoroughly to select the right financial institution.