Planning to buy a second home? This could be your chance to leverage from the existence of your pre-owned properties. You can take a home renovation loan by mortgaging any of your pre-owned properties and buy the house.
Perks of taking a loan against property for buying a second home:-
You won’t lose the ownership of your home: Firstly, when you take a loan against an already owned property to buy a second home, you’ll never lose the ownership of the new property even if you fail to repay the dues. Banks and NBFCs would only be able to sell property which was mortgage instead of the property which was bought using the loan amount.
You can sell the property whenever you wish to: Real-estate market is very dynamic in nature and the property rates can go down or up within a fraction of seconds. So, if your primary reason for buying the property is to resell it in order to gain profits, a loan against property would be a better way to finance the purchase. This way you won’t have any restriction on the resale of property recently purchased. You can sell it whenever you want to and earn decent profits.
Bottom line: The eligibility criteria for loan against property is different from that of home loans and so, you should better check it in advance. In addition, the tax benefits slightly differ in case of a second home compared to the first one. Do read them before applying.