Renovating your Home? Apply for A Home Loan
Oct 28, 2017 Home Loan
Many people are unaware that while planning for an up gradation of your house, you can actually apply for a “Renovation Home Loan”. You can alter the tilling, floors, painting or plastering your house by simply paying equated monthly installments (EMI’s). Financial institutions offer financial assistance for renovating or upgrading your house and also provide options to claim tax benefits.
Read below to know more facts:
Cost estimation of the renovation:
Before applying for a renovation home loan you must get an estimation of the cost involved in the renovation from a registered architect/ contractors. Financial institutions/ lenders will then assess the application of your home loan based on the estimates of cost provided by the contractor and process the loan further. As lenders do not provide 100 percent of the cost estimates so you need to arrange 10 to 20 percent of the estimated amount to start the renovation works.
Technical Verification from Lender
Once the lender sanctions the loan it does not mean the complete loan amount will be disbursed in one go. Lenders will only disburse the amount only after determining the level of renovation committed by the contractor. And this will be done through technical verification by the evaluator which is assigned by the financial institution/ lender, who will provide a bi/tri-monthly technical report. And based on this report and level of renovation, the loan amount will be disbursed.
Structure of Home renovation loan:
Let us understand what all things are included and excluded from the home renovation loan. The extension of the room or balcony, painting, flooring, tilling, changes in the bathroom and construction of modular kitchen are taken into account on a renovation loan provided the renovation is taking place within the built area ( i.e area covered by inner and outer walls and additional areas mandated by authority). However, the durables used for the home renovation are excluded from the renovation home loans.
Home renovation loan Eligibility:
Existing home loan applicants, as well as new applicants, can apply for the Home renovation loan. The maximum funding will be 80 percent of the estimated amount and may go higher depending upon the relationship with your bank and improved credit score ranging between (750- 800) to get your processing fees waived off.
The first and important requirement for applying renovation loan is the approved plan of improvement and the amount of the loan will be disbursed as the renovation progresses. And at every level of disbursement, you will have to contribute funds towards the renovation.
Eco-Home features:
Setting up of additional eco-home features like rain water harvesting and solar panel installations are also included in the home renovation home loans.
Tax benefits of home renovation loan:
Home renovation loan can only be availed if the completion certificate is received or the possession has been gained and the tax deductions are not eligible under Section 80C. However, under Section 24 (B) the interest component of the loan EMI is eligible for deduction under the head “income from house property”. The eligible amount of tax deduction under this section is Rs. 30,000 per annum on the interest paid on the home renovation loan.
Read below to know more facts:
Cost estimation of the renovation:
Before applying for a renovation home loan you must get an estimation of the cost involved in the renovation from a registered architect/ contractors. Financial institutions/ lenders will then assess the application of your home loan based on the estimates of cost provided by the contractor and process the loan further. As lenders do not provide 100 percent of the cost estimates so you need to arrange 10 to 20 percent of the estimated amount to start the renovation works.
Technical Verification from Lender
Once the lender sanctions the loan it does not mean the complete loan amount will be disbursed in one go. Lenders will only disburse the amount only after determining the level of renovation committed by the contractor. And this will be done through technical verification by the evaluator which is assigned by the financial institution/ lender, who will provide a bi/tri-monthly technical report. And based on this report and level of renovation, the loan amount will be disbursed.
Structure of Home renovation loan:
Let us understand what all things are included and excluded from the home renovation loan. The extension of the room or balcony, painting, flooring, tilling, changes in the bathroom and construction of modular kitchen are taken into account on a renovation loan provided the renovation is taking place within the built area ( i.e area covered by inner and outer walls and additional areas mandated by authority). However, the durables used for the home renovation are excluded from the renovation home loans.
Home renovation loan Eligibility:
Existing home loan applicants, as well as new applicants, can apply for the Home renovation loan. The maximum funding will be 80 percent of the estimated amount and may go higher depending upon the relationship with your bank and improved credit score ranging between (750- 800) to get your processing fees waived off.
The first and important requirement for applying renovation loan is the approved plan of improvement and the amount of the loan will be disbursed as the renovation progresses. And at every level of disbursement, you will have to contribute funds towards the renovation.
Eco-Home features:
Setting up of additional eco-home features like rain water harvesting and solar panel installations are also included in the home renovation home loans.
Tax benefits of home renovation loan:
Home renovation loan can only be availed if the completion certificate is received or the possession has been gained and the tax deductions are not eligible under Section 80C. However, under Section 24 (B) the interest component of the loan EMI is eligible for deduction under the head “income from house property”. The eligible amount of tax deduction under this section is Rs. 30,000 per annum on the interest paid on the home renovation loan.
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Mithlesh
2017-11-08 14:14:38I want to home loan
