How to get a home loan to construct your own house
Ashish is someone who is always looking for ways to customise when presented with an idea. He prefers tailor-made garments over standard industry-fit clothing. He always has a specific set of instructions for the chef when going out to eat. Well, it doesn’t come as a surprise when Ashish wishes to build his own home instead of going for an apartment built by a builder.
Having our own home is perhaps one of the biggest aspirations for most of us. Constructing a dream home the way you want leads to unparalleled happiness and a feeling of fulfilment that many of us long for. Building a home requires considerable time and effort. Whether you want to construct it on a piece of land you inherited from your parents or a vacant plot you bought, a home construction loan is a tool that helps you fulfil the dream of building your own home.
A home construction loan is a type of home loan that is given by the lender to help you build your own house. The total loan amount is broken into multiple instalments, and the payment is released over various stages from planning to execution based on the pre- defined disbursal criteria.
To apply for a home construction loan, you have to share the documents related to the planning and execution of the construction along with the budget for building your home with the bank or lender. Post the approval of the loan, finances for home construction loans are disbursed based on the requirement of that particular phase of construction as per the detailed plan shared earlier.
Listed below are key points you need to keep in mind while applying for a home construction loan:
Maintain a good credit score
One of the key factors considered by a lender while processing a request for a home construction loan is a good credit score. It is useful in expediting the loan approval process and can help a great deal in securing the loan as your creditworthiness is directly linked to your credit score. The higher the score, the better are the chances of loan approval by the lender. Get a good credit score by ensuring bills and monthly instalments are paid on time and by maintaining a clean record with respect to repayments of previous loans.
Check the lender’s website for information
Loan approval, in most cases, is dependent on your repayment capacity and your monthly income. It is prudent to compute the loan EMI and to check the loan eligibility criteria before applying for a home construction loan. One of the quickest ways to do that is by visiting the website of the lender and using the EMI calculator feature provided on the web portal. Ideally, the EMI amount should be less than half of an individual’s monthly salary.
Keep the documents handy
To approve the loan, a lender has to be satisfied with the documents submitted by the borrower. It is advisable to keep the documents such as a detailed construction design plan, land ownership documents, and construction budget papers at hand before applying for the home construction loan..
Work with qualified builders
A qualified builder/contractor generates trust and helps build the lender’s confidence in the project. Moreover, having a good contractor will lead to less stress for you.
Keep the buffer
No matter what project you undertake, it is always wise to keep some extra cost as a buffer. From inflation leading to a surge in the pricing of material used for construction to unforeseen circumstances, the cost of building your own home can put a constraint on the budget. Hence, it’s recommended that you keep some savings as a buffer to manage an unplanned increase in the total construction cost.
Some of the salient features of a home construction loan are given below.
Unlike the apartments built by a builder, building your own home is like painting on a blank canvas. Constructing your home lets you dictate every aspect of the construction such as colours used, quality of the material, home design, etc.
The disbursal of a home construction loan happens at regular intervals based on the stage of construction. Hence, the interest on the loan is paid only on the amount disbursed at that stage rather than the whole amount.
Constructing your dream home from scratch is a unique and fulfilling experience. While it might seem difficult at first, watching your dream come true brick by brick is a rewarding journey. A home construction loan is a tool that equips you to build your home as you desire.
- Aadhar Housing Finance has been awarded and recognised as ‘The Best Brand 2021’ at the 4th Edition of ‘The Economic Times – Best Brands 2021’ held at Sahara Star in Mumbai on 21st December, 2021.
- Aadhar Housing Finance was conferred with the 'CSR Times Award 2021' for the successful initiatives implemented under its CSR project, ‘Aayushmaan Aadhar’ at the 8th National CSR E-Summit, on 17th December, 2021.
- Aadhar Housing Finance was conferred with 'India CSR Leadership Award 2021' on 10th Dec, 2021 in 'Community Health' category for its impactful community-centric initiatives conducted under Aayushman Aadhar project.
- Aadhar Housing Finance has received ‘Maharashtra State Best Employer Brand Award, 2021’ at the 16th Employer Branding Awards hosted on 23rd Nov, 2021 by World HRD Congress for our exemplary work in HR. Aadhar has translated and combined vision with action leading to better people strategies and cultivation of competencies in order to enable the organization to be future ready.
- Aadhar Housing Finance Ltd bagged 5 awards across below categories at ‘Banking Frontiers NBFC Awards & Conference 2021’ (DNA Awards 2021) virtual summit held on 20th Aug, 2021. 1) Best Cyber Security Initiative - 1st Prize 2) Best API Initiative - 1st Prize 3) Best Omnichannel CX Initiative - 2nd Prize 4) Best Cloud Initiative - 2nd Prize 5) Esteemed Trophy (IT & Digital Group)
- Awards & Recognition: We received two prestigious awards at the 7th Edition of ‘National Awards For Excellence in BFSI 2021’ which was held virtually on 26th Aug 2021, in mentioned categories: 1) Aadhar Housing Finance Ltd received the ‘Affordable Housing Finance Company of the Year’ award, 2) Shri Deo Shankar Tripathi, MD & CEO, Aadhar Housing Finance Ltd has was conferred with ‘CEO of the Year’ award.
- Awards & Recognition: For the Second consecutive year, Aadhar Housing Finance has been certified as a ‘Great Place To Work’ by Great Place To Work Institute, a Global authority on recognizing high-trust and performance driven culture at workplaces.
- Awards & Recognition: Aadhar Housing Finance is certified as a ‘Great Place To Work’ by Great Place To Work Institute (India). This is a significant milestone for Team Aadhar as ‘The Great Place to Work Model’ is the world’s most researched, accepted and sustainable definition of a great workplace from an employee’s point of view. It is a comprehensive framework encompassing the overall employee experience ecosystem.
- Awards & Recognition: Aadhar Housing Finance won for the 3rd year in a row at The Outlook Money Awards. Team Aadhar received the Silver award in the Affordable Housing category at the Outlook Money Conclave held in Mumbai on 27th Feb, 2020.
- Awards & Recognition: Shri Deo Shankar Tripathi, MD & CEO, Aadhar Housing Finance received the ‘Top Most Influential BFSI Leaders’ award at the World BFSI Congress & Awards, in Mumbai on 14th Feb 2020.
- Awards & Recognition: Shri Deo Shankar Tripathi, MD & CEO, Aadhar Housing Finance received ‘the NBFC Leadership Award 2020’ at the 8th NBFC 100 Tech Summit held in Mumbai by Banking & Finance Post and Elets on 23rd January 2020.
- Awards & Recognition: The Aadhar Annual Report 2018-19 wins all India 3rd Prize in the PRSI National Awards 2019 at the 41st All India Public Relations Conference – Hyderabad
- Awards & Recognition: Aadhar Housing Finance is one of the ‘Best BFSI Brands 2019’: Aadhar Housing Finance received ‘The Economic Times Best BFSI Brands 2019’ award at the India-UAE Strategic Conclave 2019 held in Dubai on 15th October, 2019
- Awards & Recognition: Aadhar Housing Finance received ‘The affordable Home Loan Provider Of The Year 2018’ award from Union Minister Shri Nitin Gadkari at Outlook Money Conclave in Mumbai on 12th March, 2019 for the exemplary work in supporting the ‘Housing for All’ mission in India.
- Aadhar Housing Finance received the Prestigious ‘PMAY Empowering India Award 2019’ from Union Minister Shri Hardeep Singh Puri in Delhi on 5th March, 2019 for its exemplary work in supporting the ‘Housing for All’ mission in India.
- Dun & Bradstreet included Aadhar Housing Finance in 'India's Leading BFSI Companies 2019' list. The report was published by Dun & Bradstreet Information Services in March, 2019.
- Aadhar is declared one of the 1) ‘DREAM COMPANIES TO WORK FOR’ (Financial Services) and 2) ‘DREAM EMPLOYER OF THE YEAR’ presented by ET Now on 16th Feb, 2019 at the World HRD Congress in Mumbai.
- Shri Deo Shankar Tripathi, MD & CEO, Aadhar Housing Finance was recognized and felicitated as one of ‘100 Top Most Influential BFSI Leaders’ at the ‘World BFSI Congress’ held in Mumbai on 14th Feb, 2019.
- Aadhar Housing Finance bagged the ‘Most Promising Brand For Housing Finance’ award at the ‘World BFSI Congress’ presented by ET Now in Mumbai on 14th Feb, 2019.
- Aadhar Housing Finance won ‘Prestigious Brands of India 2019’ award at the conference held at Sahara Hotel in Mumbai on 12th Feb, 2019. The list of prestigious brands was judged and presented by BARC (Brand Advertising Research and Consulting), a global brand consultancy firm and ERTC Media, one of India’s leading independent media consulting & brand listing organisations. The recognition solidifies Aadhar as a leader within housing finance segment across various parameters such as brand recall, impact, trust, positioning, growth, reach, and innovation.
- Aadhar Housing Finance won the prestigious Finnoviti 2019 award at ‘Finnoviti Awards & Conference’ presented by Banking Frontiers and their Knowledge Partner Deloitte in Mumbai on 25th January, 2019 for innovative distribution and referral model named ‘Aadhar Mitra’.
- Aadhar Housing Finance bagged 2 prestigious awards at the ‘Banking, Financial Services & Insurance Awards’ presented by ABP News in Mumbai on 28th November, 2018:
- Housing Finance Company of the Year (Medium and Small) – for our exemplary work in the affordable housing finance segment.
- Marketing Campaign of the Year – for our recent brand campaign #GharBanegaTohDeshBanega.
- Aadhar MD & CEO awarded the ‘BFSI Leadership Award’ in Nov 2018 by ‘The Banking and Finance’ magazine and ‘elets’.
- Aadhar MD & CEO awarded the ‘Certificate of Excellence’ under “30 most innovative Business Leaders to watch in 2018” in July 2018 by ‘The CEO Magazine’.
- Aadhar receives the Award as the “Best Affordable Home Loan Provider of the Year 2017” at the ‘Outlook Money Awards’ March 2018.
- Aadhar CEO receives the ‘Inclusive Business Leaders Award’ from International Finance Corporation (IFC) for Aadhar’s exemplary work in Inclusive Business at the 2012 Inclusive Business Leaders Forum in Tokyo, Japan.