How to Secure a Home Loan for Resale Flats: Eligibility, Documents, and Key Considerations

Whether you are planning to purchase a newly constructed property or a resale flat, owning a home can be a significant milestone. While new homes can be a preferred option, resale flats can also present a viable and feasible option for homebuyers, offering benefits such as established infrastructure and quicker possession.  

However, purchasing a resale flat comes with its own set of considerations, especially when it comes to financing through a Home Loan. In this blog, we will explore everything you need to know about securing a Home Loan for a resale flat, including eligibility criteria, required documents, important considerations, and helpful tips for a successful application. 

What are Resale Flats, and Why Choose Them?

A resale flat is a pre-owned property that is being sold by the current owner to a new buyer. Unlike new constructions, resale flats are usually ready to move into. They offer advantages such as: 

• Immediate possession 
• No construction delays 
• Potential cost savings compared to under-construction projects 
• Access to established amenities and infrastructure 
• Scope to evaluate the property’s condition and neighbourhood thoroughly  

Home Loan Eligibility Criteria for Resale Flats

To qualify for a Home Loan on a resale flat, lenders typically assess: 

• Age: Salaried applicants within the age range of 23 to 67 years**, and self-employed applicants should be aged between 23 and 70 years**  
• Employment Status: Salaried employees should have a minimum of 3 years of work experience, and self-employed applicants must be able to show a business vintage of at least 3 years 
• Credit Score: A score of 750 or above is generally preferred 
• Property Age and Condition: Most lenders finance resale flats subject to property condition  

**The upper age limit is considered as age at the time of loan maturity. Additionally, the upper age limit is subject to change, depending on the property profile. 

Documents Required for Home Loan on Resale Flats

When applying for a Home Loan for a resale flat, ensure you have the following documents***: 

1. Identity and Address Proof

• Aadhaar Card, Passport, Voter ID, Driving Licence, or any government-issued ID 

2. Mandatory Documents

• PAN Card or Form 60 

3. Income Proof

• For Salaried Individuals: Latest salary slips, Form 16, and bank statements 
• For Self-Employed Individuals: Income Tax Returns, profit and loss statements, and business financials 

4. Property Documents 

• Sale Agreement and Title Deed 
• NOC from the Society or Developer 
• Previous Sale Deeds (in the case of multiple transfers) 
• Occupancy Certificate 
• Encumbrance Certificate 
• Property Tax Receipts 

5. Financial Documents

• Bank account statements of the last 6-12 months 
• Proof of down payment 
• Any existing loan details 

6. Other Documents

• Passport-sized photographs 
• PAN Card 
• Proof of age 

***This list is indicative.  

Things to Consider When Availing of a Resale Flat

When buying a resale flat, it is essential to evaluate several factors to ensure a safe and profitable investment. Here are some key aspects to consider: 

1. Legal Verification of Property Documents

• Verify the Title Deed to ensure the seller has a clear title to the property 

• Check for an Encumbrance Certificate to confirm the property is free of any legal liabilities 

• Obtain a No Objection Certificate (NOC) from the housing society or builder 

2. Age and Condition of the Property

• Assess the physical condition of the flat, including the plumbing, electricals, and structural integrity 

• Consider the age of the building, as older buildings may require higher maintenance 

3. Property Valuation

• Conduct a market valuation of the property to avoid overpaying 

• Compare the property’s price with recent transactions in the area 

4. Financing and Home Loan Eligibility

• Check if the resale flat is eligible for a Home Loan from reputed lenders 

• Understand your preferred lender’s eligibility criteria for resale flats 

5. Maintenance Charges 

• Review the applicable maintenance charges 

6. Outstanding Dues and Charges

• Ensure that all previous utility bills, property taxes, and society dues are cleared by the seller 

7. Neighbourhood and Amenities

• Evaluate the surrounding infrastructure, including access to schools, hospitals, and public transport 
• Check if the society offers essential amenities such as security, parking, and recreational areas  

Home Loan Interest Rates and Tenor for Resale Flats

The interest rates on Home Loans for resale flats are generally in line with those for new properties. However. Not that the interest rate might change based on factors such as your credit score, FOIR, and employment type. The loan tenor for a resale flat can extend up to 32 years. Opting for a longer tenor may reduce the EMI amount, but it will also increase the overall interest outgo. It is advisable to evaluate the EMI options using a Home Loan EMI calculator to make an informed decision. 

Process of Applying for a Home Loan on Resale Flats 

Applying for a Home Loan for a resale flat involves the following steps: 

1. Assess your eligibility using our online Home Loan Eligibility Calculator. 
2. Ensure all necessary documents are in place. 
3. Complete the application form and submit the documents. 
4. The lender conducts a legal and technical assessment of the property. 
5. Upon successful verification, the lender sanctions the loan. 
6. The loan amount is disbursed based on the agreement.  

Tips for a Successful Home Loan Application for Resale Flats

• Aim for a score of 750+ to secure better interest rates 
• Ensure all property documents are in order to avoid approval delays 
• Evaluate the property’s age and condition 
• Save for a sizeable down payment 
• Pay off small debts to enhance your repayment capacity  

A Home Loan for a resale flat can offer a practical solution for homebuyers looking for ready-to-move-in properties with established amenities. You can make this process simpler by understanding the eligibility criteria, organising the required documents, considering key factors when purchasing a resale flat, and following the correct application process.