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Home loan without a home?
Harsh Roongta
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June 28, 2006

Have a query regarding your home loan? Maybe we can help.

Drop us a line and our expert, Harsh Roongta, will answer it.

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Can I get home loan without a home? Some banks have conditions such as construction of house should commence within six months.

If I take a home loan to buy a plot of land and construct on it (site + construction), will I get tax rebate on the total EMIs (EMI for site + construction, or EMI for construction only)?

- Edwin Roy

 If you are buying a plot and constructing your own house, then banks will always stipulate a time limit for commencing the construction of the house.

The reason is that the banks may not want to fund the buying of a bare plot.

Even if they were willing to provide a loan for a plot of land, it may come at a higher cost and not at the home loan cost which is considerably cheaper than a plot loan.

If your intention is to build your own home, you should not have a problem with the time limit.

If, however, you want to buy a plot with an indeterminate plan to build a home sometime in the future, then you should seek a plot loan rather than a home loan.

The tax breaks are available on the full loan amount (site + construction) from the year in which the construction of the property is completed.

To see the other queries answered by Harsh Roongta, read Problems with loan prepayment?

Got a question for Harsh Roongta? Please write to us!

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