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    All you need to know about getting an extension on a home loan

    Synopsis

    Home extension loans are cheaper than home loans. Any individual can apply for a home extension loan from a bank or finance company individually or jointly.

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    Loan processing fees are chargeable as a percentage of the loan amount availed, plus applicable taxes.
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    A home extension loan can be availed by someone who wishes to make any structural changes to their existing house to add more living space. These loans can be availed for up to 90% of the construction estimate for a maximum term of up to 20 years.

    Who can avail?

    Any individual can apply for a home extension loan from a bank or finance company individually or jointly. A customer who has already availed a home loan can take a home extension loan from the same lender as an additional facility to existing loan.

    Application
    An application form must be filled and signed by all applicants. All supporting documents should be given with the application. The loan amount would depend upon factors such as age of the applicants, age of the property, existing loans, repayment track record and credit score.

    Documentation
    Separate documents are required for salaried and self employed applicants. The mandatory documents include:
    • Identity and address proof of all applicants
    • Proof of Income like employment contract and salary slips
    • Property documents such as proof title of plot, no encumbrance proof
    • Estimate of construction proposed and approved plans from local authorities.
    • Photographs

    Fees and charges
    Loan processing fees are chargeable as a percentage of the loan amount availed, plus applicable taxes. Other charges may include advocate fees (if applicable), property insurance premium and stamp duty charges for loan agreement.

    Points to note
    • Home extension loans are cheaper than home loans.
    • If the individual already has an existing loan on the house, the disbursal process may require fewer documents and hence less time.


    (The content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)
    (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)

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