Home Loan for Resale Flats

Major Banks Offering Home Loans for Resale Flats

Bank name	Interest rate (p.a.)	Processing Fees
SBI	6.95% - 7.70%	0.40% of the loan amount plus applicable GST
HDFC Bank	6.90% - 7.85%	Up to 0.50% of the loan amount
Axis Bank	10.05% - 11.00%	Up to 1% of the loan amount
Muthoot Fincorp	12-18%	Contact the bank

1. HDFC offers custom-made home loan schemes for resale flats for salaried and self-employed applicants. This scheme facilitates immediate possession of a 'Resale Home' that meets all your requirements. Check HDFC home loan eligibility.
2. SBI has been voted as "The Most Preferred Home Loan Provider" by AWAAZ Consumer Awards. The bank offers customized repayment options on resale flat home loan along with unique features such as free personal accident insurance cover, option to avail the home loan as a term loan or overdraft facility, and much more. Check SBI home loan eligibility.
3. AXIS Bank is another major home loan provider which caters to the specific needs of those who wish to purchase a resale flat. The home loan scheme offered by Axis Bank is called "Asha Home Loans". It offers loan for a tenure of up to 30 years and finances 90% of the value of the resale property. Check Axis bank home loan eligibility.
4. Muthoot Fincorp also offer home loans for resale flats and properties. You can avail a home loan up to Rs.25 lakh with the repayment tenure going up to 20 years. Muthoot Housing lets you get up to 80 percent of the value of your property as a resale loan. Check Muthoot Fincorp home loan eligibility.

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5 Benefits of Purchasing a Resale Flat:

1. You can take immediate possession of the flat once your home loan is processed, unless there is renovation and re-furnishing work to be done.
2. The overall cost incurred from availing a home loan for a resale flat is low when compared to a flat/property under construction.
3. You get a clear idea of the final cost of the resale property.
4. A resale flat is more affordable due to factors such as depreciation, age of property, etc. and is the most cost-efficient choice.
5. You can avail tax benefits on resale flats and properties come from the payment of the very first EMI itself.

Resale Flat Loan Eligibility Criteria

1. The applicant must be at least 18 years old at the time of loan sanction.
2. The maximum age of the home loan borrower depends on the Bank's terms and rules. Some Banks like State Bank of India, permit applicants to repay the entire loan amount by the age of maximum 70 years.

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How to Apply Home Loan for Resale Property/ Flats

An applicant can apply individually or jointly for a resale flat home loan. The proposed owners of the residential property can be co-applicants. However, it is not mandatory that co-applicants of a joint home loan for a resale flat have to be co-owners of the same property. Co-applicants have to be close family members like parents, spouse, siblings or children.

Loan Tenure:

The term of the home loan depends on details such as customer's profile, repayment scheme, age of customer at the time of maturity of loan, how old the property will be by the time the loan matures as well as any other terms that are deemed applicable based on prevalent norms of the concerned Bank.

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Home Loan Documents for Resale Flat checklist

The following are some of the documents that are commonly asked for by banks, as a part of their documentation and approval process:

1. Duly filled application form.
2. Passport sized photo of applicant
3. Latest 6 months' bank account statement
4. PAN Card, Voters ID, Passport or Driving Licence to be submitted as proof of identity.
5. Latest phone bill, electricity bill, property tax receipt, Passport, or Voter's ID to be submitted as address proof.
6. Business address proof should be submitted by self-employed applicants.
7. Documents related to property, like: Agreement of Sale, Sale Deed, Letter of Allotment, Land/ Building Tax paid receipt, Non encumbrance certificate, etc.
8. Copies of approved plan and local body approval

Get the list of documents required for home loan.

Tax Benefits in Home Loan for Resale Flat

One of the greatest highlights of purchasing a resale flat on home loan is that you can get tax benefit on home loan once you gain possession of the house/apartment. A borrower can avail up to Rs.1 lakh deduction on the principal amount, under section 80C of the Income Tax Act as well as a tax exemption of up to Rs 1.5 lakh on the interest on home loan, under Section 24B. This makes purchase of property on resale, by availing a home loan, more profitable.

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FAQs on Home Loan for Resale Flats

• How does a home loan work for a resale flat?

  Financing a resale flat home loan is similar to financing a new home. The lender will consider the legal documents, title ownership, and the condition of property. The lender will approve the home loan following examination of documents, etc. After the loan is approved, the lender will disburse the loan amount directly to the seller on behalf of the buyer financing the flat etc. The buyer will then repay the loan amount monthly as agreed by the tenure of the loan. Buyers must also make sure that property i.e. titles and approvals are clear and that the buyer isn't purchasing anything with title problems or court problems in the future. 

• How much loan is possible on a resale flat?

  Generally, a bank will finance a resale flat loan amount between 75% to 90% of the market value or of the agreement value, whichever is lower. The percentage of loan amounts disbursed will vary depending on the age, location, condition and resale flat borrowers credit profile amongst many other factors but typically loans on property valued between Rs. 20 lakhs to Rs. 75 lakhs would be around 80% and then progressively lower for each subsequent higher value property etc. 

• What to check before buying a resale flat?

  Before acquiring a resale flat, you should evaluate whether the seller has the correct ownership documents of the property such as the title deed and sale deed to prove clear ownership. The required approvals for documents, occupancy certificate, building plan approval, compliance with all property tax and maintenance dues on the framework should also be completed. You may also want to check if the project is registered under RERA for the security of your money before purchasing. 

• What is the tax benefit for the resale of flats?

  Tax deductions on home loans related to resale flats are permitted as per sections 80C and 24(b) of the Income Tax Act. The principal repayment can be claimed as a tax exemption up to Rs.1.5 lakh on Section 80C whereas the rate of interest paid on the loan can be claimed for deduction up to Rs.2 lakh under section 24(b). First-time home buyers could also claim additional exemption on sections 80EE and 80EEA subject to prescribed conditions.

• What are the criteria for being eligible for a home loan on a resale flat?

  You must be aged between 21 and 65 years, have consistent income sources with copies of pay slips or income tax returns, a good credit score along with clear records, and legal titles over the property. If these are in satisfactory condition as per lender standards, you will be able to secure a home loan on a resale flat easily.

• What documentation will I need for a home loan on a resale flat?

  Documentation required consists of proof of ID such as an Aadhaar card or passport, proof of address, proof of income in the form of salary slips and/or bank statement(s), proof of sale with sale deed, title deed, and occupancy certificate. You will also need legal documents for a NOC-(No Objection Certificate) and tax receipts to prove compliance and ownership.  

• How does the loan disbursal occur on a resale flat?

  Once the documents are verified and legal matters are concluded, the bank disburses the loan amount, typically by wire transfer directly into the account of the property's seller. This could happen with a single payment or multiple payments. This would depend on the agreement. The borrower's repayment would start as monthly instalments over the term as arranged and set out by the bank.

• Will I be able to obtain a home loan for a resale flat aged more than 10 years?

  Yes, banks will offer home loans for resale flats over 10 years old, provided they are reasonably maintained and do not contain any illegal issues. While obtaining a loan for an older resale flat may affect the amount of loan and its tenure, you will still be able to get a home loan for a resale flat over 10 years old, or banks may have different criteria or restrictions on lending for a resale flat over 10 years old.

• Are there any prepayment and foreclosure charges on home loans for resale flats?

  Prepayment and foreclosure charges are different for every bank and loan, and in particular, whether the bank or lender allows prepayment or foreclosure without a charge. There are some banks that allow prepayment and/or foreclosure, without a charge at all, but other banks will impose charges according to the remaining tenure or outstanding amount owing on the home loan. It is always advisable to check the home loan agreement and consult the bank or lender, to determine what charges will apply for each option before making any early repayments.