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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.
