A home construction loan is a loan for people who own a piece of land in their name and need financial aid to construct a home over that particular property. A home construction loan allows one to smoothly manage all of the expenses involved in the construction process. This loan has a repayment duration of up to 30 years. Types of home construction loans: ⦁ One-time closure loan This is one single loan that takes care of the construction part. The loan pledge in this case is a mortgage on the future completed building. ⦁ Two-time closure loan This includes two separate loans where you get a bit of a higher rate for the construction. As soon as the construction process is complete, the loan is then refinanced for a mortgage that is long-term, for the completed house. Once the eligibility criteria for taking a home loan are met, you can pay the loan amount either in installments or as a lumpsum amount. Here are the eligibility criteria for a construction home loan: ⦁ Age – 21 to 70 years ⦁ Work Nature – Salaried individuals/ self-employed ⦁ CIBIL score – 750 or higher ⦁ Nationality – Indian ⦁ Income – A minimum income of INR 25,000 If the individual meets the eligibility criteria as listed, here are the documents that will are mandatory for the construction home loan to be processed: ⦁ Identity Proof: ⦁ Aadhar Card ⦁ PAN Card ⦁ Passport ⦁ Voter’s Card ⦁ Driving License ⦁ Address Proof: ⦁ Bank statements ⦁ Passport ⦁ Voter’s Card ⦁ Utility Bills ⦁ Aadhar Card ⦁ Property Tax Receipt ⦁ Income Proof: ⦁ Income Tax Returns ⦁ Salary slips for the latest 3 months + salary account statements + appointment letter (for salaried persons) ⦁ IT Returns ⦁ Salary account statements for the latest 6 months ⦁ Business commencement registration certificate ⦁ Latest 3-year P&L projection statement ⦁ Property related documents: ⦁ Title deeds ⦁ Estimated construction cost Some additional documents that a lender may ask for: ⦁ License certificate of the builder ⦁ Detailed house plan ⦁ Value appraisal by a qualified 3rd party appraiser ⦁ Ownership document of the piece of land ⦁ Building permission from the concerned authorities To make the home loan process seamless and fool-proof, conduct a thorough background check on available lenders to ensure reliability, transparency, and a smooth process from start to end.