So, if you are looking to buy a plot, you may not be eligible for a home loan, but for a land loan. Home loans are available only for the property already constructed, under construction or likely to undergo construction soon. For funding the purchase of a vacant plot, you will have to go for a land loan instead.
Simply so, can I avail tax on land loan?
For housing loan, you are eligible for the tax deduction for payment of both interests as well as the principal amount. But
|Land loan||House loan|
|Tax Deduction||Eligible under condition||Eligible|
People also ask, can you get a 30 year loan on land?
Lenders require a larger down payment for a land loan as opposed to a traditional home mortgage loan. … Land loans with no home on the land are capped at 15 years through MidAtlantic Farm Credit, while home mortgages can go up to 30 years. Land loans are typically more expensive than purchasing a prebuilt home and land.
Do banks give loans to buy land?
Loan for land purchase is offered by banks when you need financing to buy a plot or a piece of land. This loan is generally provided for residential purposes and in urban areas. However, some banks do let you use the loan amount to purchase land in a rural area.
To purchase a piece of land, the following documents are required from the seller’s end:
- Original Land Deed of the current owner, known as the 7/12 document and also the previous owners with the proper names on the title.
- An Encumbrance Certificate from the Sub-registrar’s office for the last 30 years at least.
How Much Home Loan Can I Get?
|Net Monthly Income (₹)||Loan Amount (₹)|
|₹ 25,000||₹ 13,73,026|
|₹ 30,000||₹ 17,09,806|
|₹ 35,000||₹ 20,46,586|
|₹ 40,000||₹ 23,83,366|
However, if you are deliberating on the loan amount with how much loan I can get on a 60,000 salary, the approved amount should be close to Rs. 16.20 lakhs.
|Salary||Expected Personal Loan Amount|
|Rs. 30,000||Rs. 8.10 lakhs|
|Rs. 40,000||Rs. 10.80 lakhs|
|Rs. 50,000||Rs. 13.50 lakhs|
|Rs. 60,000||Rs. 16.20 lakhs|
While you can avail up to 80-85% funding in a home loan (90% in some cases), for a land loan, the maximum LTV is stipulated at 70% of the plot value at best.
What is a lot loan? Lot loans are mortgages secured by land. Lot loans work similarly to mortgages for homes, but there are important differences. This article explains how lot loans work and how to finance a land purchase. See today’s mortgage rates.
Banks operating in the country offer plot or land loans to eligible applicants.
|Banks||Interest Rate (p.a.)|
|HDFC Plot Loans||7.05% – 7.95%|
|ICICI Bank Land Loan||7.00% – 7.80%|
|Federal Bank Plot Loan||7.65% – 7.80%|
|Shriram Housing Finance||8.90%|
The more improved the land, the lower your required down payment and borrowing costs will be. The best options to finance a land purchase include seller financing, local lenders, or a home equity loan. If you are buying a rural property be sure to research if you qualify for a USDA subsidized loan.