A majority of Indians dream of owning a home.
The cost of purchasing a home is typically high, necessitating financial support in the form of a home loan obtained from banks and housing finance companies (HFC).
For those residing in large cities and urban areas, this typically refers to a prefabricated, multi-story apartment or custom home or villa created by a builder.
A home loan is additionally offered for building a house on a plot of land according to one’s preferences.
Additionally, some lenders provide composite plot loans that can be used to pay for both the purchase of a plot and the building of a house on it.
Plot Loans, as the name implies, are a sort of housing loan provided by financial organizations for the purpose of purchasing a plot of land intended for the construction of a home.
Such plots can be purchased directly from government agencies like the Delhi Development Authority, City and Industrial Development Corporation, Jaipur Development Authority, Maharashtra Housing and Area Development Authority, Bangalore Development Authority, etc., or from an individual or private developer.
It is comparable to a typical home loan, except it can only be used to purchase residential land or a building lot, not a prefabricated house.
Similar to a home loan, this loan is only granted after a thorough evaluation of the property and the applicant’s suitability.
Requirement for a Plot Loan and a Mortgage
The applicant must be qualified:
In a manner similar to how a home loan is granted, lenders assess the applicant’s eligibility while giving a plot loan.
Simply said, the applicant’s eligibility is a measurement of his or her ability to repay the loan, established by the applicant’s income, income stability, credit score, and other relevant indicators.
The property must be eligible:
Similar to home loans, lenders only approve loans for plots of land after carefully examining the property’s legal status, price, location, seller, type of property, and other factors.
Difference between the LTV of a home loan and a plot loan
Most lenders contribute between 70 and 80 percent of the plot’s purchase price as stated in the selling agreement, or its market value as determined by the lender, whichever is less.
The Loan-To-Value Ratio is another name for this. However, the LTV ratio for a typical house loan at the majority of banks ranges from 75 to 90% the LTV.
To determine the market worth of the plot, many lenders hire a third party to do an independent valuation of the property. With a typical home loan, this is extremely uncommon.
Additionally, some lenders provide cheaper interest rates or may not offer land loans for parcels outside of cities.
Ask a professional and qualified realtor for your area if you are thinking about purchasing a Residential Plots Sale Purchase in Panchkula. They may assist you in creating a financial plan and determining how your business might develop over time.