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Must Check These Things While Taking a Loan To Buy an Old Home or Flat

Jan 02, 2023
Must Check These Things While Taking a Loan To Buy an Old Home or Flat

If you are a potential buyer, there are high chances that you are looking out to buy your own house. Ideally, there are two options to go for it, i.e., to buy a brand-new house of your dreams or an old house on resale. Houses on resale are sometimes a good choice, but it can become arduous if everything isn't planned accordingly.

So, if you are planning to make a choice which includes buying an old home or a flat, there are home loans on resale flats which can keep you off all worries. This article will explain the dynamics of the must-check things when you opt for a home loan to buy an old home or flat.

Things to Look Out for When Buying An Old Home Or Flat

There are several benefits while buying a resale property regardless of the conditions. You must consider a few conditions when buying an old home or flat:

1. Approval

Approvals, licenses, and certificates play a significant role in the process. Here is a list of must-needed documents:

  • The land title status
  • Commencement certificate for work
  • Release certificates of the property
  • Building plan approval
  • Encumbrance certificate to ensure the property has no legal dues
  • Development of the correct details about the purchased property

2. Post-Occupation Cost

Buying a resale property has perks and post-occupation costs too. These high costs can be:

  • Club membership fees
  • Advocate and brokerage fees
  • Repair cost
  • Renovation cost

3. Relevant Documents

Before signing the sale agreement, one must verify the original documents of the property. Here is the list:

  • Ownership-related documents
  • Property tax payment
  • Approval plan
  • Bills - Electricity, Gas, and Utility

4. Basic Amenities

The amenities present in a resale property could be limited, so it is crucial to navigate the list of available options. Clubs, swimming pools, and parks are some of the most common amenities to look for. Moverover, there is a high chance of the owner charging for these amenities, so you must be aware of the cost constitution.

Pros & Cons Of Buying A Resale Property

Many decisions are life-altering, and buying a resale property falls in the same category. The resale market has its own set of advantages and disadvantages. Let's scour through them all.


There are many benefits of buying a resale property; they are:

1. No EMI, No Rent

Investing in a resale house can help save on the additional interest on the EMI. You are expected to pay rent and EMI until a house is completed. However, the conditions are slightly different for resale houses where all the expenses are mostly covered.

2. Affordable Pricing

It's always better to buy a second-hand or resale house because they are much more affordable than new houses—other factors like the interior and age of the building help in negotiating the cost better.

3. Tax Benefits

If you buy an old house, you can save on tax benefits in monthly installments. One can be exempt up to INR 1 lakh on taxes through Income Tax Income Act (under certain conditions). The amount exempted is on the principal EMI and can be availed under Section 80C.

4. Disadvantages

The disadvantages of buying a resale property are:

5. Low Home Insurance

The insurance on resale houses is lower as compared to a new house. The primary criteria for calculating insurance coverage are based on how old the building is. Also, insurance companies offer low refunds due to natural calamities or theft incidents. Hence, it could become a hindrance to buying a resale property.

6. Renovation Charges

There are certain charges associated with the resale of houses and properties. Therefore, one has to stay alert of the additional money before they shift to a different house entirely. Expenses incurred in woodwork, flooring, and plumbing can be a small task, but they can sum too huge costs. Instead, you can go for a completely new home.

7. Building Dues

Make sure to be sure of the clearances of the previous dues before taking ownership. The previous owner might often need to clear out existing dues, such as electricity bills. This can lead to you paying the un-cleared bills that might be an actual cause of trouble.

Documents Required to Buy a Resale Property

The entire documents and agreements chain is hugely significant and pertains to the resale property. Here is the list:

1. NOC From Official Body

A NOC from a lending institution that falls under the RBI is required to ensure whether the flat is mortgaged or not. This NOC will guarantee that all dues are paid back to the lender in a rightful manner.

2. Utility Bills

Electricity, gas, and water bills are crucial to verifying property details. Through these bills, one can understand the gravity of outstanding unpaid invoices.

3. Tax Receipts

Go through the tax receipts before opting for a resale property. This is to get confirmation whether the previous owner has been paying the taxes on time.

The other required documents are a possession certificate, title report, share certificate, no dues certificate, encumbrance certificate, occupancy certificate, and building approval certificate.


Buying an old home or flat is suitable if your plans are laid out. SMFG Grihashakti offers home loans for resale flats. When you avail of a home loan from SMFG Grihashakti, there are plenty of benefits. You can get flexible interest rates starting from only 9.5%* (for salaried persons) and can repay with a comfortable timeline of 30 years. With a credit score of 700 or above, you can get the loan approved within a short span of time. Moreover, flexible EMIs will make it easy to conduct your payments as you please. Don’t miss out on your best deals; check your home loan eligibility and take a home loan now!

Disclaimer: *Please note that this article is for your knowledge only. Loans are disbursed at the sole discretion of SMFG Grihashakti. Final approval, loan terms, disbursal process, foreclosure charges and foreclosure process will be subject to SMFG Grihashakti’s policy at the time of loan application. If you wish to know more about our products and services, please contact us.

SMFG India Home Finance Co. Ltd. (Formerly Fullerton India Home Finance Co. Ltd.)
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