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Can you Opt for a Home Loan if you’re Buying a Resale Apartment?

With the spiralling real estate prices, the feasible option to own a home is to either go in for a resale flat or an under construction project. While under construction projects have an element of uncertainty, a resale flat is available for immediate use.

Just as banks and financial institutions offer housing finance schemes for brand new properties, they also provide Home Loans to finance the purchase of resale apartments. The advantages of buying a resale property include- low cost of acquisition, immediate possession, and tax benefits right from the very first EMI. 

Most banks and housing finance companies are offering Home Loans for financing resale properties. They have no restrictions on approving the Home Loan as long as the value of the resale property is greater than the loan amount. 

You can apply for a Home Loan online and also calculate the EMI for Home Loan with the help of an EMI calculator. Depending on your repayment capacity, you can fix the loan tenure.

Documentation

A resale apartment has been in the possession of some other person and could have encumbrances. Hence banks require the following documents with respect to the resale property, before approving the Home Loan application.

1. Identity proof and address proof. 
2. Bank statements for the past 6 months. 
3. Property related documents - 

• Agreement of sale
• Sale deed
• Receipt for the property taxes paid
• Letter of allotment 
• Non-encumbrance certificate 
• Copies of the approved plan
• Approval letter accorded by the local administrative body. 

Tax Benefits on Home Loan

The Home Loan that you avail to finance the purchase of  resale apartment is eligible for tax benefits as well. You can avail a deduction of Rs.1 lakh on the principal amount under section 80C. Tax deduction on interest, upto Rs.1.5 lakh, is also available under section 24. 

The tax benefits and the comparatively low acquisition costs (owing to depreciation and age of the property) along with the facility to avail a Home Loan does indeed make buying resale apartments a profitable option. If your next investment opportunity turns out to be a resale apartment, grab it and get set to move into your home sweet home.