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Plot Purchase and House Construction Loan

An easy loan from a financial institution to purchase a plot or to construct a home is one of the most popular ways to make your dream home a reality. However, it is recommended to check your land purchase eligibility with the help of this loan eligibility calculator and also check the EMI amount with this EMI calculator. These two calculators will tell you how much loan you can get under the house construction loan and how much will be your monthly EMI.

Moreover, application processing through our smartphone application ensure faster processing of your home loan.

Features of Aavas Home Construction Loan

  • We provide finance for self-construction of residential house.
  • The land may be free-hold or a plot allotted by Development Authority
  • Tranch-wise disbursement as per the stage of construction
  • Attractive interest rates
  • Tenure of up to
    • o 30 years for salaried customers (from government/ PSU/ Private sector) with more than ₹ 35,000/Month
    • o 25 years for other salaried customers
    • o 20 years for self-employed customers.
  • We are a perfect partner for your preferred property, which may be:
    • o Development Authority
    • o Freehold
    • o RERA Approved Flats
    • o Nagar Palika
    • o Gram Panchayat
  • Integrated branch network that facilitates loan servicing at a branch convenient to you.

To Get more details about the Documents Required for Salaried or Self employed person to take Land purchase and home construction loan Click Here

Some interesting facts on Home Construction Loan

  • Nearly 9 % applications of the total applications were for a construction loan.
  • In the last 30 days, the most active age group who were looking for a construction loan have an average of 41 years.
  • 25% of construction loan applicants were women, who wanted to construct their home.
  • Mumbai has witnessed a notable hike in the number of people looking for a Home construction loan.
  • Plot Purchase plus Home Construction Loan FAQs

    Can I get a home loan for land purchase?

    No. Home Loans are strictly meant for buying homes that are already built. For the purchase of land and for constructing plot + construction composite loan from Aavas.

    What is a plot and home construction loan?

    A plot plus construction loan is the amount borrowed to purchase a plot and build a house on the same plot. The loan amount is repaid in monthly installments.

    How to apply for plot Purchase and construction loan?

    The applicant must follow the following steps to apply for the land purchase loan.

    Step 1 The borrower must fill the application form

    Step 2- The borrower must submit the necessary documents, Original documents of land, Age proof v Id proof, Residence proof, Income statement, Bank statement, Form 16

    Step 3- After successful submission of the documents, the loan amount is transferred to the borrower's bank account

    How does a home construction loan work when buying a plot?

    The construction loan borrowed from the institution can be used to purchase land, build a property on the land owned, or can be used to renovate the existing property.

    Can I get a home construction Loan with no down payment?

    No, while applying for the house construction loan the borrower has to pay 20% of the value of land as a down payment without any failure.

    Are there any tax benefits on the land purchase and home construction loan?

    There is no tax benefits on the loan borrowed for land purchase. The tax benefit can only be availed when the borrower is going to construct a house on that particular land.

    What are the minimum and maximum tenure of loan for land purchase?

    The minimum tenure for a loan for land purchase and home construction is 2 years and the maximum tenure is 15 years which can exceed up to 30 years in some cases.

    How many years can I keep the plot of land before starting construction?

    There is no lower limit as to how long you have to keep the land before beginning the construction. However, it is important that you finish construction within 3 years of getting the land purchase and construction loan approved. You have to give a written undertaking to Aavas for the same.

    Related Blogs

    Aavas Blog

    Why Constructing a Home is a Better Option than Renting

    27-Mar-2021 |Home Construction Loan,Home Construction

    The satisfaction and comfort that one derives in living in one’s own house as compared to staying in rented accommodation are immense. In fact, there are instances of people, who, tired of shelling out monthly rents, apply for home construction loan to build their own houses. Some maintain that staying in a rented accommodation costs less, while some say that having one’s own house is the best way forward as one can live with freedom and without having to worry about paying monthly rent.

    Rent keeps on increasing and the rented house always has a threat of vacating. 

    Owning a home is the dream of every person, the only fly in the ointment being the fact that the sky-rocketing property prices in the recent past have made people take the easy way out of staying in rented accommodation, rather than buying a house. However, if you have decided to stay put in the city of your choice and want to have a dream house of your own, apply for house construction loan. At the same time, make sure you have the necessary funds for the down payment and stable future cash flows.

    There is no denying the fact that having your own home gives you that rare sense of security and happiness which staying in a rented accommodation can’t. Buying a house with a loan makes things easier as you mentally prepare yourself to pay the EMI over the long term. After your EMI is over, you can breathe easy knowing that you don’t have to pay any further money on your housing loan.  

    Experts are of the opinion that the best period of buying a house is at a young age; maybe, just after settling down in a secure job, or sort of settled in a business-owned or parental business because one doesn’t have to worry about the financial part. Managing the EMIs initially may be difficult, but after, say, five to ten years, when income goes up, it would be fairly easy to pay monthly EMIs. Moreover, there is a corresponding rise in property prices with each passing year.

    Those who happen to occupy a rented accommodation, count their blessings once the landlord extends the tenure of their stay through a legal agreement. But not all are lucky in this respect. It all depends on the whims and wishes of the landlords. Moreover, the rising rental prices cause anxiety among those who are not in a position to buy their own homes. However, there is good news for those in a mood to buy their new homes thanks to the availability of lower interest rates and the government subsidy for first-time buyers of affordable homes.

    Owning a house gives you the additional advantage of getting extra income through rentals or from paying guests. Those who happen to pay monthly rents in rented accommodation may find the expenses cheaper in the short run as compared to the EMI, but in the long run, you actually end up paying more. Needless to mention, there is no way you can recover the cost of your rent. As a homeowner, you can easily mortgage the property but a tenant cannot mortgage a rental property.

    Buying a house is a smart idea for many as there are tax benefits on the principal amount, the interest one pays, in addition to some more benefits that can accrue to you if you are a first-time buyer. There is no doubt that home construction loans are a unique way to reduce tax and own the house of your choice.

    One more advantage of owning a home is that it frees you from the annoying ritual of monthly rent payment because your mortgage payment each month turns out to be your investment for your own secure future. You can pay as much or as little as you like by going for a payment schedule that suits you from many mortgage options. Needless to say, a day will come when your house might be worth more than you paid for it. So, always work toward having your own house which is a golden goose for your future.

    For construction cases, in fact area of construction can also be restricted to suit our cash flows and as the cash flows increase over a period, he can extend the house. 

    Aavas Blog

    Things to Know About Home Construction Loan

    20-Feb-2021 |Home Construction,Home Construction Loan

    Constructing one’s own beautiful home on a piece of land is every man’s dream. And if you happen to be one of those lucky few with a piece of land at your disposal, then it’s time that you thought seriously about constructing your own home.
     
    Frankly speaking, constructing a house is no walk in the park. You need to have the necessary financial wherewithal to meet the escalating costs of the project. In other words, constructing a house involves a lot of money. In this situation, you can make arrangements for necessary funds by applying for a Home Construction Loan. You can either employ a contractor for the job or handle the entire thing all by yourself. The choice is yours. You also need to keep in mind that the process of approval and disbursal of the home construction loan is different from the regular Home Loan. Before you choose the lender, you should do thorough research of the different financial institutions and review their interest rate, documentation requirements and loan terms.


    Four Must-Known Facts About Home Construction Loan

    HOW MUCH ARE YOU ELIGIBLE FOR
    A construction loan, which is also known as a “self-build loan", is considered a short-term loan that is sanctioned by a bank to finance the building of a home or another real estate project. As for the loan amount that you are eligible for, it depends on your income and repayment eligibility. You can be eligible for construction loans up to 80 - 85% of the value of the property.
     
    A REAL MONEY SAVER
    Borrowing a home construction loan would definitely help you save more money in the bargain. Ideally, you should settle for an owner-builder construction loan; it would save money on the labour. On the other hand, if you hire a builder to do it for you, the construction cost in all probability would shoot up.


    Loan Disbursal Process
    When you apply for a home construction loan, the amount will be disbursed in instalments only. This is, however, not the case with home purchase loans, where the lender pays you the full amount in lump sum. However, in the case of home construction loans, one should tread carefully. The approved loan will be disbursed in phases, depending on how much progress the construction has made. Most banks in India, as a rule, pay the approved loan amount in about 3-5 instalments. This obviously implies that you must have sufficient funds at your disposal to purchase the raw material and get started.

    The bank which has sanctioned your Land purchase and construction loan must be convinced that the work is making smooth progress. It is only then that the bank concerned would disburse the loan.


    Using Construction loan for interior work:
    Home loan for self-construction is generally sanctioned for the immovable construction works. And it is always ideal to check with the concerned institution, whether the sanctioned construction loan can be used for interior work or not?

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