You wanted to move into a home of your dream. For this, you thought that availing a Home Loan would be a smart move. However, after you visited some of the ready possession homes, you did not like the construction style and more.
After analyzing all aspects, you thought of building a home of your choice with the help of the Home Construction Loan.
Now that you have decided to opt for the Home Construction Loan to build a home as per your own preferences, you will need to consider some points.
Yes, some points related to the Construction Loan such as documents and more can help you get quick approval from a prospective lender.
Thus, before you jump on to applying for the Home Construction Loan online, you should consider some points to help you get a speedy approval.
Consider These Points to Get Quick Home Construction Loan Approvals
Keep Some Funds Handy
You need to know that the Home Construction Loan is a bit different from the conventional Home Loans. You will not get the entire loan amount in one go as you would need to request for an amount as per the stages of your construction. Yes, the lenders will provide the loan in instalments. As a result, it is advised to keep some amount handy so that you cover the needs of the construction. You can use your funds to pitch in the need when the next instalment is due from the lender.
Stick to your Home Design
One of the prerequisites of the Home Construction Loan is providing the home design to the lender. Once it gets approved and if you then don’t follow it and start adding one more floor, remodel other aspects and more, it that case the lender will freeze the loan. Thus, if you don’t want your home construction to hang in nowhere, stick to the original home. Let the home construction to be completed and then again you can avail a Home Construction Loan to add another floor and more elements.
Take a Stock of the Home Loan EMI
Like any other Home Loan, even the construction loan will need you to repay the loan in easy EMIs. Thus, before availing the loan, ensure to use the Housing Loan EMI calculator to know how much EMI your existing income can afford. Applying for a higher loan may not see getting it approved and even if it’s approved, you would have to pay the higher interest rate and pay higher EMIs that will eat up your monthly income.
Home Loan Balance Transfer
While the normal online Home Loans are easy to transfer, it is difficult to do so in the case of a Home Construction Loan. Thus, ensure to negotiate for an interest rate that will be affordable for you at the time of avail it as you won’t be able to transfer it later.
If you don’t furnish the documents as per the requirements of your lenders, they won’t approve the loan. Some of the standard documents required for the Home Construction Loan are:
- Residence proof
- Identity proof
- Income proofs
- Offer letter or employment letter from your employer
- Last 6 months bank statements
- Deeds for the plot titles
- Sanctioned home plan
- Construction estimate attested by a qualified architect
- Cheques for the payment of the processing fee
The Bottom Line
Since you are aware of the tips and things to consider for the approval of the Home Construction Loan, assess your case, needs, and affordability. Once you have analyzed all parameters, then only apply for the Home Construction Loan online. All the best!