{"id":44332,"date":"2021-12-14T13:43:22","date_gmt":"2021-12-14T08:13:22","guid":{"rendered":"https:\/\/www.squareyards.com\/blog\/?p=44332"},"modified":"2022-04-27T15:09:01","modified_gmt":"2022-04-27T09:39:01","slug":"what-is-construction-loan-for-home-gly","status":"publish","type":"post","link":"https:\/\/www.squareyards.com\/blog\/what-is-construction-loan-for-home-gly","title":{"rendered":"What is Construction Loan for Home? Eligibility and Documents"},"content":{"rendered":"\n<p class=\"has-text-align-justify\"><span style=\"font-weight: 400;\">A construction loan or what is popularly known as a self-build loan is a loan taken for the construction of any real estate project or house. This house construction loan is generally a short-term loan. When the long-term finance has been approved, the homeowner or the constructor of the project should move towards the house construction loan or plot and construction loan to cover the cost of the building. Since this type of loan is at high risk, the home construction loan interest rates are much higher than the usual loans. The contractors or homebuyers willing to have a customized property are the ones who usually go for a construction loan. A borrower can opt for refinancing of the construction loan by converting it into a permanent mortgage or get an \u2018end loan\u2019 which is a new type of credit for paying the loan after the completion of the construction.<\/span><\/p>\n\n\n\n<div class=\"wp-block-yoast-seo-table-of-contents yoast-table-of-contents\"><h2>Table of contents<\/h2><ul><li><a href=\"#h-benefits-and-features-of-home-construction-loan\" data-level=\"2\">Benefits and Features of Home Construction Loan<\/a><ul style=\"margin-bottom:0\"><li><a href=\"#h-longer-terms\" data-level=\"3\">Longer Terms<\/a><\/li><li><a href=\"#h-taxation-benefits\" data-level=\"3\">Taxation Benefits<\/a><\/li><li><a href=\"#h-the-facility-of-transferring-the-balance\" data-level=\"3\">The Facility of Transferring the Balance<\/a><\/li><li><a href=\"#h-home-construction-top-up\" data-level=\"3\">Home Construction Top-up<\/a><\/li><\/ul><\/li><li><a href=\"#h-the-eligibility-criteria-for-a-construction-loan\" data-level=\"2\">The Eligibility Criteria for a Construction Loan<\/a><\/li><li><a href=\"#h-documents-required-to-avail-a-construction-loan\" data-level=\"2\">Documents required to Avail a Construction Loan<\/a><\/li><li><a href=\"#h-important-real-estate-terms-you-should-know\" data-level=\"2\">Important Real estate Terms You Should Know<\/a><\/li><li><a href=\"#h-faqs\" data-level=\"2\">FAQs<\/a><\/li><\/ul><\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-benefits-and-features-of-home-construction-loan\">Benefits and Features of Home Construction Loan<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-longer-terms\">Longer Terms<\/h3>\n\n\n\n<p class=\"has-text-align-justify\"><span style=\"font-weight: 400;\">The home construction loans usually come with long tenures ranging from 5 to 30 years which means that the burden of EMIs is quite reduced for the borrower.<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-taxation-benefits\">Taxation Benefits<\/h3>\n\n\n\n<p class=\"has-text-align-justify\"><span style=\"font-weight: 400;\">Under sections 80C and 24B, one can claim tax benefits on the interest and principal amount of the home loan. Moreover, first-time buyers get additional tax benefits.<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-the-facility-of-transferring-the-balance\">The Facility of Transferring the Balance<\/h3>\n\n\n\n<p class=\"has-text-align-justify\"><span style=\"font-weight: 400;\">Most of the banks provide the borrower with a balance transfer facility in which the borrower is eligible to transfer the remaining home construction loan amount to other banks if they find the interest rate to be higher than the market.<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-home-construction-top-up\">Home Construction Top-up<\/h3>\n\n\n\n<p class=\"has-text-align-justify\"><span style=\"font-weight: 400;\">You can get a home construction top-up on the current loan amount for additional construction if you fulfill the eligibility criteria of the bank to get the top-up.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-the-eligibility-criteria-for-a-construction-loan\">The Eligibility Criteria for a Construction Loan<\/h2>\n\n\n\n<ul><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">To avail a home loan, a person should be between 18 years to 70 years of age.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Home construction loans can be availed by both salaried and self-employed individuals.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">To get a construction loan, a CIBIL score over 750 is considered to be ideal.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">NRIs and Indian residents can apply for a home construction loan.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">A person should earn a minimum of \u20b925,000 to avail of the home construction loan.<\/span><\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-documents-required-to-avail-a-construction-loan\">Documents required to Avail a Construction Loan<\/h2>\n\n\n\n<ul><li><span style=\"font-weight: 400;\">Aadhaar Card, PAN card, Driver\u2019s License, or Passport as proof of identity.<\/span><\/li><li><span style=\"font-weight: 400;\">Aadhar Card, Passport, or any Utility Bill as proof of address.<\/span><\/li><li><span style=\"font-weight: 400;\">Income Tax Returns, Salary Slips of the last three months or bank statements to prove your income source.<\/span><\/li><li><span style=\"font-weight: 400;\">The title deed of the property, encumbrance certificate, or property plans is approved by the local authorities.<\/span><\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-important-real-estate-terms-you-should-know\">Important Real estate Terms You Should Know<\/h2>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>Benami Property Transaction Act<\/td><td><a href=\"https:\/\/www.squareyards.com\/blog\/benami-property-transaction-act-gly\" target=\"_blank\" rel=\"noreferrer noopener\">What is Benami Property Transaction Act<\/a><\/td><\/tr><tr><td>Balloon Payment<\/td><td><a href=\"https:\/\/www.squareyards.com\/blog\/what-is-balloon-payment-gly\" target=\"_blank\" rel=\"noreferrer noopener\">What is Balloon Payment<\/a><\/td><\/tr><tr><td>Bare Shell and Warm Shell<\/td><td><a href=\"https:\/\/www.squareyards.com\/blog\/bare-shell-and-warm-shell-gly\" target=\"_blank\" rel=\"noreferrer noopener\">What is Bare Shell and Warm Shell<\/a><\/td><\/tr><tr><td>Capital Gains Tax<\/td><td><a href=\"https:\/\/www.squareyards.com\/blog\/capital-gains-tax-ptax\" target=\"_blank\" aria-label=\" (opens in a new tab)\" rel=\"noreferrer noopener\" class=\"ek-link\">Capital Gains Tax<\/a><\/td><\/tr><tr><td>Common Areas in Apartments<\/td><td><a href=\"https:\/\/www.squareyards.com\/blog\/common-area-in-buildings-apartments-gly\" target=\"_blank\" rel=\"noreferrer noopener\">What is Common Areas in Apartments<\/a><\/td><\/tr><tr><td>Commencement Certificate<\/td><td><a href=\"https:\/\/www.squareyards.com\/blog\/what-is-commencement-certificate-gly\" target=\"_blank\" rel=\"noreferrer noopener\">What is Commencement Certificate<\/a><\/td><\/tr><tr><td>Carpet Area<\/td><td><a href=\"https:\/\/www.squareyards.com\/blog\/carpet-area-gly\" target=\"_blank\" rel=\"noreferrer noopener\">What is Carpet Area<\/a><\/td><\/tr><tr><td>Brownfield Project<\/td><td><a href=\"https:\/\/www.squareyards.com\/blog\/brownfield-projects-gly\" target=\"_blank\" rel=\"noreferrer noopener\">What are Brownfield Project<\/a><\/td><\/tr><tr><td>built-up-area<\/td><td><a href=\"https:\/\/www.squareyards.com\/blog\/built-up-area-gly\" target=\"_blank\" rel=\"noreferrer noopener\">What is built-up-area<\/a><\/td><\/tr><tr><td>Debt to Income Ratio<\/td><td><a href=\"https:\/\/www.squareyards.com\/blog\/debt-to-income-ratio-gly\" target=\"_blank\" rel=\"noreferrer noopener\">What is Debt to Income Ratio<\/a><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-faqs\">FAQs<\/h2>\n\n\n\t\t<section\t\tclass=\"sc_fs_faq sc_card    \"\n\t\t\t\t>\n\t\t\t\t<h2>How much loan can I get for home construction?<\/h2>\t\t\t\t<div>\n\t\t\t\t\t\t<div class=\"sc_fs_faq__content\">\n\t\t\t\t\n\n<p>The home construction loan amount depends on the borrower\u2019s income.<\/p>\n\n\t\t\t<\/div>\n\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section\t\tclass=\"sc_fs_faq sc_card    \"\n\t\t\t\t>\n\t\t\t\t<h2>Where can I get a home construction loan?<\/h2>\t\t\t\t<div>\n\t\t\t\t\t\t<div class=\"sc_fs_faq__content\">\n\t\t\t\t\n\n<p>You can consult any bank or financial institution to get a construction loan<\/p>\n\n\t\t\t<\/div>\n\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section\t\tclass=\"sc_fs_faq sc_card    \"\n\t\t\t\t>\n\t\t\t\t<h2>What are the current construction loan rates?<\/h2>\t\t\t\t<div>\n\t\t\t\t\t\t<div class=\"sc_fs_faq__content\">\n\t\t\t\t\n\n<p>The current construction home loan rates fall between 6.5% &#8211; 7%.<\/p>\n\n\t\t\t<\/div>\n\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section\t\tclass=\"sc_fs_faq sc_card    \"\n\t\t\t\t>\n\t\t\t\t<h2>Can I get a home loan for an under-construction property?<\/h2>\t\t\t\t<div>\n\t\t\t\t\t\t<div class=\"sc_fs_faq__content\">\n\t\t\t\t\n\n<p>Yes, you can avail of a home loan for under-construction property.<\/p>\n\n\t\t\t<\/div>\n\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section\t\tclass=\"sc_fs_faq sc_card    \"\n\t\t\t\t>\n\t\t\t\t<h2>Can I get a loan to buy land and build a house?<\/h2>\t\t\t\t<div>\n\t\t\t\t\t\t<div class=\"sc_fs_faq__content\">\n\t\t\t\t\n\n<p>Yes, there are specific types of loans that can be availed for buying the land and building a house.<\/p>\n\n\t\t\t<\/div>\n\t\t<\/div>\n\t\t<\/section>\n\t\t\n<script type=\"application\/ld+json\">\n\t{\n\t\t\"@context\": \"https:\/\/schema.org\",\n\t\t\"@type\": \"FAQPage\",\n\t\t\"mainEntity\": [\n\t\t\t\t\t{\n\t\t\t\t\"@type\": \"Question\",\n\t\t\t\t\"name\": \"How much loan can I get for home construction?\",\n\t\t\t\t\"acceptedAnswer\": {\n\t\t\t\t\t\"@type\": \"Answer\",\n\t\t\t\t\t\"text\": \"\n\n<p>The home construction loan amount depends on the borrower\u2019s income.<\/p>\n\n\"\n\t\t\t\t\t\t\t\t\t}\n\t\t\t}\n\t\t\t,\t\t\t\t{\n\t\t\t\t\"@type\": \"Question\",\n\t\t\t\t\"name\": \"Where can I get a home construction loan?\",\n\t\t\t\t\"acceptedAnswer\": {\n\t\t\t\t\t\"@type\": \"Answer\",\n\t\t\t\t\t\"text\": \"\n\n<p>You can consult any bank or financial institution to get a construction loan<\/p>\n\n\"\n\t\t\t\t\t\t\t\t\t}\n\t\t\t}\n\t\t\t,\t\t\t\t{\n\t\t\t\t\"@type\": \"Question\",\n\t\t\t\t\"name\": \"What are the current construction loan rates?\",\n\t\t\t\t\"acceptedAnswer\": {\n\t\t\t\t\t\"@type\": \"Answer\",\n\t\t\t\t\t\"text\": \"\n\n<p>The current construction home loan rates fall between 6.5% - 7%.<\/p>\n\n\"\n\t\t\t\t\t\t\t\t\t}\n\t\t\t}\n\t\t\t,\t\t\t\t{\n\t\t\t\t\"@type\": \"Question\",\n\t\t\t\t\"name\": \"Can I get a home loan for an under-construction property?\",\n\t\t\t\t\"acceptedAnswer\": {\n\t\t\t\t\t\"@type\": \"Answer\",\n\t\t\t\t\t\"text\": \"\n\n<p>Yes, you can avail of a home loan for under-construction property.<\/p>\n\n\"\n\t\t\t\t\t\t\t\t\t}\n\t\t\t}\n\t\t\t,\t\t\t\t{\n\t\t\t\t\"@type\": \"Question\",\n\t\t\t\t\"name\": \"Can I get a loan to buy land and build a house?\",\n\t\t\t\t\"acceptedAnswer\": {\n\t\t\t\t\t\"@type\": \"Answer\",\n\t\t\t\t\t\"text\": \"\n\n<p>Yes, there are specific types of loans that can be availed for buying the land and building a house.<\/p>\n\n\"\n\t\t\t\t\t\t\t\t\t}\n\t\t\t}\n\t\t\t\t\t\t]\n\t}\n<\/script>\n","protected":false},"excerpt":{"rendered":"<p>A construction loan or what is popularly known as a self-build loan is a loan taken for the construction of any real estate project or house. This house construction loan is generally a short-term loan. When the long-term finance has been approved, the homeowner or the constructor of the project should move towards the house [&hellip;]<\/p>\n","protected":false},"author":31,"featured_media":45993,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[216],"acf":[],"_links":{"self":[{"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/posts\/44332"}],"collection":[{"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/users\/31"}],"replies":[{"embeddable":true,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/comments?post=44332"}],"version-history":[{"count":7,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/posts\/44332\/revisions"}],"predecessor-version":[{"id":57646,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/posts\/44332\/revisions\/57646"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/media\/45993"}],"wp:attachment":[{"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/media?parent=44332"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/categories?post=44332"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}