Buying An Old House? Get A Home Loan!

Posted on July 31, 2018

Buying your own home is one of the most cherished dreams of every individual. You have been working hard just to realise this every dream, all the while cutting down on your expenses and maximising your source of income, just to be able to save as much money you can to be able to purchase your dream home. With the rising prices of residential properties all over India, it has become just a little harder to be able to purchase a new residential property. Most of the time you just end up playing the catching up game, and this could lead to you becoming frustrated with the whole process and might think of giving up on your dream of owning an amazing house. There is no need to be frustrated and desperate. You can realise your dream of owning a residential property right now, just apply to get a Home Loan from any of the multiple lenders operating in the Indian market.

Home Loans are one of the most popular financial products on the market at the moment as they enable you to realise your long-cherished dream of owning great residential property. Home Loan is a secured loan wherein the property purchased through the Home Loan must be mortgaged with the lender, but you can continue to use the property for your residential purpose or rent it out to a tenant. As the amount availed as a Home Loan might run into lakhs of rupees, the repayment tenure can be extended up to 30 years. At present, the rate of interest against Home Loan starts from as low as 8.45% and can vary slightly according to the lender. The amount availed as the housing loan can be used to acquire a residential property such as a house, plot, flat, bungalow only.

With the rising popularity of Home Loans, most lenders have now started offering them through online channels. You can  now Easily Get a Home Loan, all you need to do is to log-on to their website or access an online finance marketplace such as MyMoneyMantra to find out about the different loan products, interest rates, terms and conditions, Home Loan eligibility and repayment tenure, and so on. This information is vital to make an informed decision.

Buying an old house with a Home Loan

If you think that you cannot buy an old house with a Home Loan, then you are mistaken. Many lenders offer Home Loans to enable prospective buyers to purchase an existing residential house. Some people prefer to go for an under-construction property as they get the flexibility to pay the money to the developer in installments but this also exposes you to the risk of non-delivery by the builder. What would happen if the builder does not make the delivery as promised? You would be stuck paying the EMI (Equated Monthly Instalment) for the Home Loan as well as rent for the house you are living in. This double burden could be too much for anyone.

When you buy an old house, you get ready possession, and with some minor modifications, you can move into the house instantly. The only issue here is that you need to have sufficient money with yourself to pay for the margin money, stamp duty, registration charges, moving charges, and others as you will need to bear these expenses instantly.

Factors affecting your chances of getting a Home Loan for an existing House

There are various parameters and factors that a lender would consider while processing your application for a Home Loan for an old house. Some of the most important factors have been listed down below:

  • Financial stability: Like any other Home Loan, the lender will assess your financial stability to ascertain your eligibility. This involves checking your Income Tax Returns, Bank Statements, Form 16/Net worth statement, Form 26 AS and credit score.
  • Age of the borrower: Your age will also be taken into consideration. If you are a young person under the age of 30, you can get extended repayment tenor of up to 30 years while if you are in your 50’s, then you will get reduced repayment tenure. Most lenders consider the maximum age for borrowers, by the time the loan repayment period ends, to be 60 years for salaried individuals and 65 years for self-employed individuals.
  • Age and condition of the property: Age and physical condition of the building in which the property is present is also taken into consideration while processing the Home Loan application. The loan amount available will depend on the expected life of the house calculated as per the structural audit by the lender’s consultant.
  • Conveyance: The lender will check if society had been formed and if the land was conveyed in favour of the society. If the land was not conveyedin favour of the society, you could not get a Home Loan.
  • Legal and Technical report: The lender will get a legal and technical report for the said property prepared from a lawyer or consultant to ascertain the legal status of the house. Your loan will be processed only if the legal and technical report comes as positive.

Buying an old house is a wise decision if you do not want to undertake the process of constructing a house from scratch or wait for the builder to hand over the possession but you must take the decision only after checking the physical condition of the house as well as its legal status.

Also Read: When and How to Plan for Your First Ever Home?

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