Home loan on buying father's home

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

29 June 2012 Hi,

My father is planning to sell his house and I am interested to buy that one.

Is it possible to get home loan on buying Father's home.

Appreciate your valuable advise.

Thanks.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
Follow

29 June 2012 Yes you can get the home loan. There is no problem in buying a house from your father.

Querist : Anonymous

Querist : Anonymous (Querist)

03 July 2012 Thanks for your advise.

fyi, its my father's own property not ancestral.

One more question, is there any way to to avoid registration fees while taking home loan of that house as my father already paid the same earlier.

Thanks.

Upgrade to CAclubindia Pro. Subscribe Now!

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
Follow

03 July 2012 If you want to transfer the house in your name, you will have to register the same and pay stamp duty.

Querist : Anonymous

Querist : Anonymous (Querist)

03 July 2012 If I don't want to transfer on my name and though I want to take home loan from Bank then?

Bank is ready to provide me loan as per my eligibility but I want to avoid registration fees and stamp duty?

Any way to avoid it?

Appreciate your valuable advise.

Thanks.

Querist : Anonymous

Querist : Anonymous (Querist)

03 July 2012 will Power of Attorney work in this case?

Querist : Anonymous

Querist : Anonymous (Querist)

11 July 2012 Hi,

As I have raised related question again that I am planning to buy my father’s house by taking home loan from bank.

I am very much eligible and every document is proper of my father’s house.

When I have approached SBI and LIC Housing regarding the same then they told me that we are not providing Home Loan in blood relation. We have a very good records with SBI branch and my CIBIL report is very much clear.

Could you please advice what steps or where I can approach now.

Thanks.

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
Follow

28 July 2024 ### Home Loan for Buying Father’s Home

**1. Eligibility for Home Loan:**

It is indeed possible to get a home loan to purchase a property owned by your father. However, banks and financial institutions have specific policies and guidelines when it comes to lending for properties owned by close relatives.

Here are some steps and considerations:

- **Eligibility Criteria:** Ensure you meet the bank's eligibility criteria for a home loan, including income, credit score, and property valuation.

- **Documentation:** You will need to provide documents such as the sale deed, property papers, proof of ownership, and the relationship between you and your father. Since banks are hesitant with blood relations, it is crucial to provide all necessary documentation to validate the transaction.

- **Approval Challenges:** Some banks have internal policies that may restrict lending to close relatives due to the risk of potential misuse. If SBI and LIC Housing have denied the loan based on their policy, you may need to approach other banks or financial institutions. Consider exploring private sector banks or housing finance companies that might be more flexible in such cases.

**2. Registration Fees and Stamp Duty:**

- **Registration Fees and Stamp Duty:** These are mandatory charges for the legal transfer of property ownership and cannot generally be avoided. Even if you are buying from a close relative, the transaction needs to be registered officially to be legally binding.

- **Avoiding Fees:** There is no legal way to completely avoid registration fees and stamp duty. However, you might explore:
- **Family Settlements:** In some cases, family settlements might reduce the burden of these fees, but this generally requires legal advice and proper documentation.
- **State-Specific Exemptions:** Check if there are any state-specific exemptions or concessions for properties transferred between family members, though such exemptions are rare.

**3. Power of Attorney (POA):**

- **POA Usage:** A Power of Attorney allows someone to act on your behalf. However, it cannot replace the need for the legal transfer of property through registration. The POA can be used to handle paperwork and transactions but does not eliminate the requirement for official registration of the property transfer.

- **Property Transfer:** If you intend to buy the property, the legal transfer through registration is necessary to make you the rightful owner. The use of POA does not exempt you from this requirement.

**4. Alternative Approaches:**

- **Other Financial Institutions:** If SBI and LIC Housing are not accommodating, consider approaching other banks or financial institutions. Some might have different policies regarding loans for properties bought from relatives.

- **Legal and Tax Advice:** Consult a property lawyer or financial advisor to understand the implications fully and explore all possible avenues.

### Summary

- **Home Loan Feasibility:** It is possible to get a home loan to buy your father's house, but the bank's policy and internal guidelines may affect this.
- **Registration Fees:** Registration fees and stamp duty are generally unavoidable and essential for the legal transfer of property.
- **POA:** Power of Attorney does not replace the need for property registration.
- **Alternate Banks:** Explore other financial institutions if your current options are not feasible.

It's advisable to consult with a property lawyer or financial advisor to navigate this process effectively and ensure that all legal and financial aspects are covered.

Upgrade to CAclubindia Pro. Subscribe Now!