Kumari Palany & Co

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What are the avenues for an additional home loan?

Posted on: 16/Jun/2018 4:30:22 PM
Most of us interested in buying a home are entirely dependent on bank loans. However, it may not be wise to decide on buying a home wile exclusively depending on the bank loans. Banks offer loans only up to a maximum of 80%. The balance will have to be organized/arranged by the buyer.

Apart from that, there are strong possibilities that the construction cost may persistently increase costing more.

Generally, those buying a house will ensure all the minimum facilities required and then move into the new house first. They would think the balance facilities/work can be completed gradually once having moved into the own house.

For example, the kitchen may need some wooden furniture this would be done only later especially as this expense would have run beyond the budget. The buyer might have planned a nice interior decoration in the reception but this may run into a few lakhs of Rupees. So, the general tendency would be that these aspects can be taken care of in future. Sometimes, purchase of somewhat essential items such as air-conditioner, etc., would be postponed.

There is a provision called top-up in the housing loan. If the regular record of the EMI for the availed housing loan has been regularly paid, there would not be any difficulty in getting the top-up loan.

After the main construction of the house is completed, it is possible to obtain top-up loans for the minor modifications. For example, if the buyer is interested in converting the kitchen into a modular one, the top-up loan can be taken. Otherwise., it is also possible to take the top-up loan in the case and the additional room is thought of. The top-up loan can even be taken to build a car-parking facility.

One stipulation is that at least 6 months should have passed after getting the housing loan. Only then, it will be eligible to apply for the top-up loan. The amount of top-up loan offered is based on the number of years since the primary housing loan was taken. There are prospects of getting a top-up loan of 1% to 20% of the original housing loan. As for the banks, it will also be based on the duration of the earlier loan. There are possibilities of obtaining even 50% of the housing loan taken earlier.

In case the top-up loans are utilized for the house construction, there is a provision to avail a concession on the Income Tax as well. The tax concession may be up to 1% of the earlier housing loan taken. This may vary from bank to bank. There are no special documents required to avail this top-up loan. The documents already submitted with the earlier housing loan application will suffice.