Quick Guide To Difference Between Home Loan Builder Case & Resale Case

A home is a home whether it is bought in resale or from a builder. Likewise, many loan borrowers are of the opinion that a home loan is a home loan whether it is taken on a resale property or from the builder. From their perspective, there exists no difference in going for a home loan on resale or builder property except in the documentation required. Although even if the rates applicable for both are the same it does not necessarily imply that both are similar. On the contrary, there exists a fine difference in both the various aspects of funding, costs incurred, tenures, etc., the knowledge of which is unknown to many.  Therefore to help you understand the difference in both the following table will highlight its important factors of differentiation.

SR.NO.	FACTORS	HOME LOAN BUILDER CASE	HOME LOAN RESALE CASE
1	Property Funding	80%-90% on the Agreement Value.	100% on the Agreement Value.
2	Costs Incurred	Processing Fees, Franking (0.20% on loan amount), Admin and Technical Charges.	Processing Fees, Franking (0.20% on loan amount), Admin and Technical Charges + Legal charges, Title Search Cost, Resale Affidavit Charges, Registered Mortgage.
3	Tenure	Can apply for maximum tenure subject to the age of the borrower.	Loan tenure is subject to the age of the borrower + age of the property.
4	Disbursement	Partial disbursement especially for under-construction projects.	Full disbursement of loan.
		Funds are disbursed in the builder’s account.	Funds are disbursed in the reseller’s account or in the bank account in case of seller BT case. (Seller BT(balance transfer) means a seller has taken a loan against the same property).
5	Tax Deduction Principal – U/s 80C Interest – U/s 24 B	Under-construction tax cannot be claimed upfront. Applicable tax deductions: Principal – None Interest – Can be claimed in equal parts in five financial years post-completion or property possession within the overall annual limit of Rs. 2 lakh.	Tax can be claimed upfront. Applicable tax deductions: Principal –Up-to 1.5 lakh. Interest – Up-to 2 lakh.
6	Lender Choice Of Banks/NBFCs	Loan borrowers are pushed to opt with the Banks/NBFCs that have approved the builder project.	Loan borrower has a choice to opt with the lender Bank/NBFC with a low interest rate.
7	Documentation	Financial Documents + Property Papers + NOC from Builder.	Financial Documents + Property Papers + NOC from Society + Property Tax Receipt + Share Certificate.
8	OC –Occupancy Certificate	OC is not mandatory. Partial OC OR CC (Commencement/Completion Certificate) + Plan Copy is acceptable.	OC is Mandatory for property more than 10 years old.

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