How to get a plot loan
Formalities required to get a home loan approved for constructing own house on a plotApnaloan.com Research Bureau
10 Aug 2007
I plan to buy a plot and wish
to construct my own house. What are the formalities required to get my home loan
approved?
You will need to submit an estimate of the total
cost of construction, certified by a registered architect. The cost of the plot
to you or the current market value, whichever is lower, will also be taken into
account to work out the total cost of the project. The bank will decide the home
loan amount based on this total cost. The loan will be released in parts, based
on the progress of the construction, and after you have brought in your full
margin. The bank may insist on sending its own
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personnel to assess the progress of
construction or may rely on certificates/photographs submitted by you. Some
banks are not comfortable funding self-constructed properties and hence, you
will need to take that into account while finalising your
lender.