Owning a house in a city like Mumbai, in itself, is an achievement for many. But the attractive returns that property prices have given proud house owners has resulted in Mumbaikars looking at a possible option of owning that second home
A second home may be in the form of a farm house or a weekend retreat just on the outskirts of Mumbai. Second home or weekend home could also be a property that is bought from an investment angle given that the yield is pretty high. In the current scenario even a ‘small’ investment in real estate can often mean lakhs of rupees, and the added financial pressure from buying a second home can often be over whelming. But today, the home loan options available to the buyer are in plenty even for that second home. We’ve got some important tips to get you through this. Buying your second home may be easier than you think:
The basic assumption here is that the house buyer is eligible for a loan on the basis of his income.
If you are taking home loan to buy a second home or a weekend home – the only care that needs to be taken is that the property is on Non-Agricultural land since most banks do not provide finance for a property on Agricultural land.
If the property is on Non-Agricultural land, there are various ways in which a customer can look at financing the property as below :
The first care that the house buyer needs to take is that the property is being bought at a location that is being serviced by the bank or financial institution who is going to give you a home loan. This may be of prime importance since there is a physical technical valuation of the property that is done by bank to establish the approximate value of the house.
The next thing in the buyer’s list of priorities is that the property is more than the minimum area in sq. ft. that is acceptable to the bank. Most the banks have a cap on the minimum area of the property that is funded.
Stage of construction is major factor to get a home loan. Almost all home loan providing banks would release funds on the basis of the stage of construction of the property.
The next most important thing a house buyer has to evaluate options is in terms of amount financed as most financial institutions or banks have a cap on the loan amount provided as a % of the property value. Generally this cap is lower for a buyer of a second home than for the first home.
Customers who are already running a home loan for their first home can also look at the option of taking a top-up on the existing house to fund the purchase of the second home. In today’s scenario of rising prices, this is a simpler and useful option.