Property Loan: Taking a home loan for an older property? Make sure to check these 6 things before buying..

Often, an older home feels more appealing than a new one. The neighborhood is already established, with markets, roads, and other amenities nearby. The price is frequently lower compared to buying a new home in the same area. However, price shouldn't be the only factor considered when purchasing an older home.

Atul Monga, Co-founder and CEO of Basic Home Loan, notes that if you are applying for a home loan, the bank will assess the property. The bank evaluates whether the house is suitable as security for the loan. Such scrutiny is particularly crucial for older homes; one must examine the house's condition, verify the title and registration, and check all necessary documents, including construction approvals.

According to Colliers' 'Homebuying Sentiment Survey 2026,' 50% of prospective buyers intend to purchase a home within the next two years. The survey covered approximately 1,800 individuals across more than 30 residential markets.

**Focus on condition, not just age**
According to Atul Monga, a 15-year-old house and a 40-year-old house cannot be viewed in the same light. However, one should not base a decision solely on age. Factors such as the house's structural condition, any previous modifications, and its maintenance history should be evaluated.

It is also advisable to determine the cost of repairs beforehand. For very old properties, getting a structural stability assessment done can be beneficial.

Monga explains: suppose an older house costs ₹70 lakh but requires immediate repairs worth ₹8 lakh. In this scenario, the actual cost of the house becomes ₹78 lakh. Therefore, do not make a decision based solely on the ₹70 lakh price tag; factor in the total cost required to make the house habitable.

**2. Consider the loan tenure for older homes**
It is not guaranteed that you will get the same loan tenure for an older home as you would for a new one. According to Atul Monga, the age and condition of the property can influence loan decisions. Lenders also evaluate the property's documentation and its value as collateral. Therefore, do not compare two homes solely based on price; consider the loan tenure and total cost as well.

3. Verify even if the property is registered

Many people assume that if a house is registered, everything is in order. This is not necessarily true; registration is just one aspect. You should verify the title and check the records of previous owners. It is important to ensure there are no outstanding debts or disputes and that property tax records are up to date.

It is also crucial to check whether the existing construction complies with approved plans and regulations. Under the RBI's housing finance framework, a homebuyer must declare that the property has been constructed in accordance with approved plans and applicable building norms. Wherever possible, a completion certificate should be available. Before disbursing the loan, banks also require confirmation from an architect regarding compliance with construction regulations.

4. Mistakes with older homes can prove costly

Atul Monga notes that older homes may have undergone various alterations over time—such as the addition of an extra floor, the enclosure of a balcony, or the extension of a section of the house.

If these modifications are not documented, securing a home loan could become difficult. Therefore, before finalizing the deal, cross-check the documents against the actual condition of the house.

5. Understand the legal status

The legal records for some older properties—such as 'Lal Dora' properties—can be complex. For such properties, one must carefully examine documents related to the nature of the land and ownership rights. According to Atul Monga, simply checking the owner's name is insufficient; a thorough review of all documents pertaining to both the land and the house is essential. According to Delhi's Revenue Department, the 'Lal Dora Certificate' is a document establishing ownership rights over land or property situated within a village's inhabited area. Nevertheless, a buyer should still examine the complete chain of title and other essential documents.

Greater caution is required regarding unauthorized colonies. Under the RBI's housing finance framework, home loans should not be granted for properties in such colonies unless the colony has been regularized and the requisite fees have been paid.

6. Consider the property and the loan together

Atul Monga notes that buyers often view the house and the home loan as separate entities, whereas they are interconnected. The property's condition and documentation determine the loan amount a bank will sanction. Additionally, beyond the EMI, you will also have to bear the costs of repairs and maintenance.

Therefore, first verify ownership rights and the title. Next, check the registration status and investigate any existing debts or disputes. Subsequently, examine the construction approvals and the condition of the house.

Finally, determine the appropriate loan amount based on the total cost. Atul Monga points out that purchasing an older house is not necessarily a bad deal.

Disclaimer: This content has been sourced and edited from Money Control. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.