How to get a Plot Loan
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 technical 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.