Home Construction Loan

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Home Construction Loan

Home construction loans are a type of financial product specifically tailored to fund the construction of a new home. Unlike traditional mortgages, which provide funds upfront for the purchase of an existing home, construction loans release funds in stages as the construction progresses.*

Following are some key important factors

Purpose

Home construction loans are used to finance the construction of a new residential property. This could include building a home from scratch on purchased land or major renovations and additions to an existing property.

Disbursement in Stages

Instead of receiving a lump sum at closing, the loan funds are typically disbursed in stages or "draws" as construction milestones are met. These stages may include clearing and preparing the land, pouring the foundation, completing the framing, installing major systems like plumbing and electrical, and finishing interior work.

Conversion to Mortgage

Once construction is complete, the construction loan usually converts into a traditional mortgage loan. This process may involve refinancing the construction loan into a mortgage with a longer repayment term and regular principal and interest payments.

Qualifications

Lenders may have stricter requirements for construction loans compared to traditional mortgages. Borrowers may need to demonstrate a solid credit history, sufficient income, and detailed plans for the construction project, including building permits and construction timelines.

Multi-Feature Security Loans

Typically, these loans offer multi-feature security, ensuring comprehensive coverage for the entire construction project.

Documents required for Self and Salaried Person

Please note that the list of documents mentioned is indicative. During loan processing, additional documents may be needed. The same shall be communicated to you as and when required.*
✓ KYC Documents – Passport, Driving License, Aadhaar Card, Voter ID Card, Pan Card.
✓ Employment details - ID Card, last 3 months’ salary slips(salaried) / ITR returns along with the income generated by the applicant and the business entity (CA attested) for the last three financial years ( self-employed )
✓ Bank account statements for the last 6 months (salaried)/ 12 months (self-employed).
✓ Document of proof of business of minimum 5 years (for businessmen/ self-employed professionals).
✓ Form 16 (Part A & Part B) and filed Income Tax Returns (ITR) for the past two years.

Property Documents
✓ Encumbrance certificate
✓ Plot Title Deeds
✓ The local authority has sanctioned a copy of the plan.

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