Home loan for a builder floor in Delhi
Banks lend on builder floors when the title, the sanctioned plan and the completion papers are clear. How much you can borrow depends on the bank's valuation, your income and your other loans, so ask for 3 things early: the bank's checklist, its legal opinion and its valuation.
· By Raghav Chopra, founder, in South Delhi real estate since 2010
Which documents do banks ask for?
Banks usually ask for the registered chain of sale deeds, the sanctioned plan, the completion or occupancy certificate, the property tax receipts and an encumbrance check, along with your income and identity papers.
Each bank runs its own legal and technical check, so ask for its checklist before you pay a token.
Why do some builder floors get rejected?
The common reasons are a gap in the title chain, a building that differs from the sanctioned plan, a missing completion certificate or a plot with a dispute.
Raghav Chopra runs the same checks before a floor reaches you, so a bank's check should not be the first time you hear of a problem.
How much can you borrow?
Banks lend a share of the property's value, set by their valuation, not the price you agree. The share differs by bank and by the size of the loan, so ask each bank for its figure in writing.
The amount also depends on your income, your age and your other loans, so ask the bank for a sanction in principle before you commit.
Can you get a loan for an under-construction floor?
Banks do lend on under-construction floors, usually releasing the money in stages as the building progresses, after checking the builder and the plan. Expect more scrutiny than for a ready floor.
The booking article explains the stages and the checks.
Documents a bank usually asks for
| Document | Why the bank wants it |
|---|---|
| Chain of registered sale deeds | Proves the seller's title |
| Sanctioned plan | Shows what was approved to be built |
| Completion or occupancy certificate | Shows the building matches the plan |
| Property tax receipts | Shows no dues are pending |
| Encumbrance certificate | Shows no other loan or charge |
Every bank sets its own list. Ask your bank for the current checklist.
Frequently asked questions
Will a bank finance a builder floor?
Yes, if the title, sanctioned plan and completion papers are clear and the property passes its valuation. Banks treat a builder floor like any other property once the papers are in order. Ask for the checklist early so the papers are ready before you pay a token.
Does the bank value the floor at my price?
Not always. The bank lends against its own valuation, which can be lower than the price you agree. The difference comes out of your own money, so ask for the valuation before you commit, and budget for the gap between the valuation and the price.
Does a loan change who should own the property?
It can. The bank usually wants the borrower to be an owner, so a loan can decide whose name goes on the sale deed. This also affects stamp duty, as the guide on buying in your wife's name explains, so decide the structure before the deed is drafted.
Should I arrange the loan before I pay a token?
Ask for an in-principle sanction first, so you know your limit, but do not wait for the final sanction before the token if the property is one you want. Make the token subject to the documents, and to the loan if the seller agrees.
This is general information, not legal or tax advice. Confirm with your CA or lawyer before acting.
Related reading
More guides from Raghav
Talk to Raghav
One person, start to finish. Your message goes to Raghav, not a call centre.