Home Loan for Resale Flats

Banks provide home loans for resale flats, which allows you to promptly purchase such a flat and move in without financial stress. Here, you can explore the advantages of choosing a resale flat and understand how to acquire a home loan for it.

Unlike under-construction projects, resale flats offer ready-to-move-in convenience with various other benefits. Builders or developers sell new properties for the first time, while owners list resale flats in well-developed neighbourhoods with established infrastructure. Choosing a resale flat offers several advantages:

• Enjoy immediate possession without waiting

• Avoid delays related to ongoing construction

• Save costs compared to under-construction properties

• Access existing amenities and well-developed infrastructure

• Evaluate the property’s condition and neighbourhood before purchase

It is a type of housing loan that banks or financial institutions provide to help you buy a residential property that the current owner is selling after the previous occupancy. These kinds of loans have similar features and charges to regular home loans.

While the eligibility criteria for a home loan for an old house vary, most lenders have the following common requirements to assess your credit profile and property value: 

• Age Requirement

You need to be between 23 and 67 years of age if you are salaried, and 23 to 70 if you are self-employed. Age affects repayment ability and loan approval. 

• Property Age and Condition 

Lenders assess the resale property's age and condition because it serves as collateral. A poorly maintained or excessively old property increases default risk, impacting loan approval. 

• Employment Stability 

You need to have a work experience of at least 3 years if you are salaried. Similarly, you need to have 5 years of work experience if self-employed.  

• Creditworthiness 

A strong credit profile with a good CIBIL score, responsible credit utilisation, positive repayment history, and diversified credit are factors that boost eligibility for home loans for resale flat.

Follow this simple resale flat loan process to apply for a loan with lenders available on Bajaj Markets:

1. Click on the ‘Check Offer’ option on this page

2. Select ‘New Home Loan’ and choose if you are a salaried or self-employed professional

3. Provide your mobile number and property identification status

4. Accept the terms and click on ‘Apply Now’ 

After this, a representative will reach out to you for further proceedings.

Here are some things to take care of when buying a resale house on loan:

• Check the condition and age of the property you wish to buy to avoid any damage and additional repair costs

• Verify the encumbrance certificate and other documents to check for legal clearances and the ownership status of the property

• Have a professional evaluate the property and compare it with other properties in the area to ensure that you pay a fair price

• Conduct a thorough inspection of the locality’s infrastructure, safety, amenities, etc.

• Get all the property-related documents, like the sales deed, property tax receipts, etc., vetted by a lawyer

• Access the account statement to check for any unpaid dues or penalties from the previous buyer

Under the Income Tax Act of 1961, you can get tax benefits on home loans for resale flats under the following sections:

• Section 80C: Under this section, you can claim an annual tax deduction of up to ₹1.5 Lakhs for the EMIs you will pay towards the repayment of the loan amount. 
• Section 24: This section allows you to claim an annual tax deduction of an additional ₹2 Lakhs on the interest component of your EMIs. 

When buying a resale flat, you can repay your home loan through various options:

• EMIs (Equated Monthly Instalments): Pay fixed monthly amounts over a chosen tenure
• Flexible Terms: Choose step-up or step-down EMIs based on your financial situation
• Bullet repayment: You pay monthly instalments for the applicable interest and choose to pay principal later
   

Prepaying a loan can provide lots of benefits, such as: 

• Save on Interest: Reduce total interest by lowering the principal amount before the due date
• Lower EMI: Cut monthly payments with partial prepayments
• Better Credit Score: Improve your creditworthiness with good repayment behaviour
• Tax Benefits: Claim deductions under Sections 80C and 24 within the set limits

Resale properties come with many advantages, but they also have some drawbacks that require careful consideration. Here is an overview of both:

Advantages

• You can move in right away without construction delays. This is ideal for quick relocation
• You can get an established neighbourhood and better access to amenities
• You can negotiate better prices based on the property condition or the seller’s urgency
• You can get a clear legal history of the property, as previous ownership often means resolved legal issues
• You can inspect the actual property and assess any needed repairs upfront

Disadvantages

• Older homes may need costly repairs or remodelling
• The design of the house may not match modern needs, and upgrading can be expensive
• You can expect higher utility bills due to older construction
• Title or documentation issues can delay or risk the purchase

Getting a home loan can be straightforward and stress-free with careful planning. The following tips can help you secure your loan smoothly and with confidence.

• Research Loan Options

Compare lenders, interest rates, and repayment terms to identify the most suitable choice. Taking time to explore different offers ensures that you select a loan aligned with your financial goals.

• Aim for Affordability

Choose a loan amount and EMI that you can comfortably manage without straining your finances. This helps maintain financial stability while meeting your repayment obligations.

• Spend Wisely

Maintain financial discipline by prioritising essential expenses and avoiding unnecessary outflows. Timely EMI payments not only prevent penalties but also protect your credit score.

• Choose Suitable EMIs

Opt for EMIs that do not exceed 45% of your income, ensuring repayment remains manageable. This balance allows you to cover other financial commitments without stress.

• Plan Repayment Tenure

Shorter tenures reduce the total interest payable, saving you money in the long run. Longer tenures, on the other hand, lower your monthly EMIs and ease immediate financial pressure.

• Maintain a Good Credit Score

A credit score above 750 improves your chances of quick loan approval. It also enables you to access better interest rates and favourable loan terms.

• Know Foreclosure Norms

Understanding your lender’s foreclosure policies can help you plan early repayment. This allows you to save on interest costs and close the loan ahead of schedule.

• Check Eligibility Criteria

Ensure you meet the lender’s requirements regarding income, credit history, and documentation. Fulfilling these conditions increases your likelihood of approval and avoids delays.

• Review Additional Charges

Clarify processing fees and other administrative costs before finalising the loan. This helps you plan your budget effectively and prevents unexpected financial burdens.

• Read the Fine Print

Carefully review all terms and conditions in the loan documents before signing. This ensures complete transparency and protects you from unforeseen clauses.