Home Loan: Building a house or renovating an old one can be costly, often requiring people to take out loans. However, if the land or house is in the name of your mother or grandmother, the process of securing a loan differs from standard procedures. Here’s what you need to know if you’re planning to get a home loan under these circumstances.
Home Loan for Construction or Renovation
If you plan to build a new house on land owned by your mother or grandmother, the first step is to visit the bank and have the land papers verified. Once this is done, you can apply for a home construction loan. In the case of renovating an already built house, you can directly apply for a home renovation loan.
Adding Mother or Grandmother as Co-Applicant
According to property expert Pradeep Mishra, the most effective way to secure a loan in such cases is by making your mother or grandmother a co-applicant. This is crucial because the bank requires all owners of the property for which the loan is being taken to be co-applicants. By adding them as co-applicants, the loan approval process becomes smoother, and the likelihood of getting a loan increases.
Why You Can’t Get a Loan in Your Name Alone
Banks approve loans based on the validity of the land papers and the name on the property documents. If the land is in your mother’s or grandmother’s name, the bank may refuse to grant a loan solely in your name. In such cases, you have two options: either take the loan in the legal owner’s name or apply as a co-applicant with your mother or grandmother.
Why Not a Loan in the Mother’s or Grandmother’s Name Only?
Many might wonder why a loan can’t be taken directly in the name of the mother or grandmother. The reason is that banks assess the regular income of the applicant before approving loans. If the mother or grandmother doesn’t have a stable income, the bank might reject the loan application. Thus, it is essential to add yourself as a co-applicant, ensuring the bank that you can manage the loan repayment.
In conclusion, if your mother or grandmother owns the property, you will need to become a co-applicant to increase your chances of getting a home loan for construction or renovation.
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