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.

Resale flats refer to residential properties that an existing owner sells to a new buyer. 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:

• Ensure 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.

Some of the leading banks and NBFCs that offer loans for resale properties are:

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

Loan applicants must be between 23 and 70 years old. Age affects repayment ability and loan approval. 

• Property Age and Condition 

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

• Employment Stability 

Stable employment with a higher disposable income enhances eligibility for affordable second-hand flat home loans. 

• 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.

To apply for a home loan for an old house, you may need to produce the following documents to the lender: 

• A complete and accurately filled application form 

• Your passport-size photographs 

• Bank account statements for at least 6 months 

• PAN card, Voter ID, Passport, Aadhaar card, driving license 

• Proof of business income (for self-employed applicants) 

• Property-related documents such as: 

1. Sale Agreement

2. Allotment Letter

3. Non-encumbrance Certificate

Follow these simple steps to apply for a home loan for resale flat on Bajaj Markets:

1. Click on the ‘CHECK OFFER’ option on this page

2. Provide your personal and income-related information

3. Next, select a lender from the list provided

4. Enter the loan amount you wish to get and your preferred tenure

5. Check all the details entered, then submit the application

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 damages 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

• Prepayment: Make extra payments toward the principal to reduce interest and the loan tenure

• Foreclosure: Pay off the entire loan early. Check for any applicable charges

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 repaying 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’s an overview of both:

Advantages

• You can move in right away without construction delays. This is ideal for quick relocation

• You will get an established neighbourhood and better access to amenities

• Negotiate better prices based on property condition or seller urgency

• You will get a clear legal history of the property, as previous ownership often means resolved legal issues

• 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

• Expect higher utility bills due to older construction

• Title or documentation issues can delay or risk the purchase