In view of the increasing demand for Home Loan on Lal Dora Property, there are some HFCs or NBFCs which have started providing Lal Dora Property Loan with certain rules and conditions. If you are buying or want to buy property in Lal Dora area then read this article till the end, you will get the solution and detailed information of most of the questions related to home loan against Lal Dora property.
Home Loan on Lal Dora Property in Delhi-NCR
If you have land in Lal Dora Area or want to buy property in Lal Dora Area then it is very difficult for you to take a loan on such property. Most Banks and large HFCs do not offer Home Loan on Lal Dora Property in Delhi. Banks usually have very stringent policies regarding loans on property and even a slight deviation from their policy can cause banks to reject your loan application.
The main reason for Banks not providing Home Loan on Lal Dora Property in Delhi is the lack of municipal approved maps. If you want to get a loan on property, then you must have a property with an approved map and a clear construction plan.
Properties in Lal Dora villages are exempted from laws and construction norms under the Delhi Municipal Act, 1963. As a result, problems like illegal construction, gross commercialization, poor infrastructure, etc. have increased considerably in Lal Dora villages. These developments do not follow any guidelines or rules.
The basic premise behind a loan on property is to make a good mortgage. Due to the reasons mentioned above, banks are unable to create a full mortgage and a clear title credit score range for application for Lal Dora Property Loan in Delhi.
Therefore, most Banks and HFCs reject loan applications against property in Lal Dora. But, this is not the end of the root for applicants residing in these villages.
To meet the increasing demand for housing loans in the Lal Dora region, some Banks or HFCs have come forward to offer Home Loan on Lal Dora property on certain special terms and conditions.
What is Lal Dora Property ?
Lal Dora is a term used in Delhi to describe properties that are part of village Abadi areas. These properties have existed for over 100 years, and the land is primarily used for residential and commercial purposes. Lal Dora properties are excluded from the ambit of urban development laws in Delhi, and as such, they do not have clear titles.
Lal Dora Property is one of the most important and historic land pieces of Delhi-NCR. The term “Lal Dora” was first used in 1908 to denote a piece of land that was part of the village’s “Abadi / Population”.
In those days, the part of the village which was used for residential purposes was demarcated with red thread around them. This demarcated land is known as “Lal Dora” land. The “Lal Dora” land is to be used for the support of livestock and for non-agricultural purposes only.
There are more than 360 villages in Delhi, which are classified as Lal Dora villages. These villages have been given several types of relaxation in the rules related to the laws and construction norms related to the Delhi Municipal Act 1963.
As a result, a number of problems have arisen in the “Lal Dora” area, such as illegal construction, gross commercialization, poor infrastructure, construction beyond permissible limits, illegal addition of multiple floors.
Importance of Lal Dora Properties in Delhi
Lal Dora properties in Delhi are crucial as they provide housing and commercial spaces to thousands of people. In addition, they offer a more affordable option compared to the high-rise apartments that dominate the city. Lal Dora properties also hold cultural and historical significance, as they have been in existence for generations and have become a part of the city’s fabric.
Why Home Loans on Lal Dora Property are Complicated ?
Home loans on Lal Dora properties in Delhi can be complicated due to the lack of clear titles. Financial institutions prefer to lend on properties with a clear title as it guarantees their investment. Lal Dora properties do not have clear titles, making it challenging for lenders to secure their investment. Additionally, the resale value of Lal Dora properties is lower compared to other properties in the city, making them a higher risk for lenders.
Factors to Consider Before Applying for a Home Loan on Lal Dora Property
Before applying for a home loan on Lal Dora property, there are several factors to consider. These include:
- Property Ownership
Ensure that the property you’re interested in purchasing is under your name or the seller’s name. Additionally, make sure that the property is Lal Dora and not agricultural land. - Property Location
Consider the location of the property, as this can affect the loan amount and interest rate. Properties located in prime areas may attract higher loan amounts and lower interest rates compared to those located in remote areas. - Loan Amount
Consider the loan amount you need, as this can affect your eligibility for a loan. Determine the amount you can afford to repay, as this can affect the loan tenure and interest rate. - Credit Score
Ensure that you have a good credit score, as this can affect your eligibility for a loan. A higher credit score can attract lower interest rates and higher loan amounts.
What is “Lal Dora” Certificate ?
This certificate is used to establish that a person is the legal owner of a particular property / land in the “Abadi / Populated” area of a village (i.e. the area demarcated for residence). This certificate is one of the most important documents for the purpose of obtaining a water / electricity connection in a village.
The “Lal Dora” certificate can be obtained from the office of the Sub Divisional Magistrate under whose jurisdiction one resides.
Documents required to get “Lal Dora” Certificate
- Application form duly filled by the applicant.
- Form containing complete details of Land, Khasra Number and Owner’s Name.
- Details of land, details of Khasra land, Name of landowner to request for Lal Dora certificate
- Affidavit stating the purpose.
- Sijra of the ground / property.
- Copy of ration card
- Copy of Khasra-Khatauni.
Criteria for obtaining Lal Dora Certificate
The duly filled application is first sent to the Tehsildar’s office for verification. The office of the Tehsildar verifies the application and prepares a report on it. If the application details are verified by the Tehsildar, the applicant is issued a “Lal Dora” certificate. This entire process takes about 21 working days.
Can Lal Dora property be mortgaged ?
A person who have property in Lal Dora and have taken Lal Dora certificate, they can easily mortgage their lal dora property and get loan from Banks or NBFCs. This loan can be taken for buying a house, for building a house or for repairs in the house. You can also take a loan for other personal or business purpose by mortgaging your property in Lal Dora area. You will have to submit documents related to your income eligibility, on the basis of which the Banks or NBFCs will assess your ability to repay the monthly installment.
Should a person buy Lal Dora property ?
Compared to regulated areas in Delhi, Lal Dora properties are available at nominal rates, making it possible for a low and medium income person to buy affordable homes in prime locations of the city. Costs are reduced by avoiding the construction of civic amenities such as parks and state-of-the-art roads, which are a mainstay in occupied areas. It is up to you whether you value civic amenities like parks and state-of-the-art roads or go for low cost.
Can you suggest me which Bank or NBFCs offer home loan on Lal Dora Property in Delhi NCR ?
Since properties built on Lal Dora Land are not authorized b
How to Get a Home Loan on Lal Dora Property ?
Getting a home loan on Lal Dora property can be a lengthy process. Here are the steps you need to follow:
- Find a Lender
Look for lenders who offer home loans on Lal Dora properties. Not all banks or financial institutions provide such loans.
- Check Eligibility
Check your eligibility for a home loan on Lal Dora property. Most lenders have eligibility criteria such as minimum age, minimum income, and minimum credit score.
- Calculate Loan Amount
Calculate the loan amount you need and the EMI you can afford. Use an online loan calculator to get an estimate.
- Submit Documents
Submit the required documents to the lender. Ensure that all the documents are complete and accurate.
- Property Verification
The lender will conduct a verification of the Lal Dora property to ascertain its value and legal status.
- Loan Approval
If the lender is satisfied with the property’s value and your eligibility, they will approve the loan.
- Disbursement
Once the loan is approved, the lender will disburse the loan amount to the seller or the builder.
Tips to Get Approval for a Home Loan on Lal Dora Property
Getting approval for a home loan on Lal Dora property can be challenging. Here are some tips to increase your chances of approval:
- Maintain a Good Credit Score
A good credit score can increase your chances of loan approval and attract lower interest rates.
- Have a Stable Income
Lenders prefer borrowers with a stable income. Ensure that you have a regular source of income.
- Research Lenders
Research different lenders and compare interest rates and loan terms. Choose a lender who offers the best deal.
- Submit Accurate Documents
Ensure that all the documents you submit are accurate and complete. Inaccurate or incomplete documents can delay the loan approval process.
- Get a Co-Applicant
If you have a low credit score or insufficient income, consider getting a co-applicant. A co-applicant with a good credit score and stable income can increase your chances of loan approval.
Risks Involved in Taking a Home Loan on Lal Dora Property
Taking a home loan on Lal Dora property involves several risks. These include:
- Lack of Clear Title
Lal Dora properties do not have clear titles, making them a risky investment for lenders.
- Lower Resale Value
Lal Dora properties have a lower resale value compared to other properties in the city.
- Legal Issues
Lal Dora properties may have legal issues related to land ownership, which can affect the loan approval process.
- Limited Loan Options
Not all banks or financial institutions offer home loans on Lal Dora properties, limiting your loan options.
Pros and Cons of Buying a Lal Dora Property in Delhi
Buying a Lal Dora property in Delhi has its pros and cons. Here are some of them:
Pros :-
- More Affordable
Lal Dora properties are more affordable compared to high-rise apartments in the city.
- Cultural Significance
Lal Dora properties hold cultural and historical significance, as they have been in existence for generations.
- Flexibility
Lal Dora properties offer flexibility in terms of construction and usage.
Cons :-
- Lack of Clear Title
Lal Dora properties do not have clear titles, making them a risky investment.
- Limited Amenities
Lal Dora properties do not offer the same amenities as high-rise apartments, such as security, parking, and elevators.
- Limited Loan Options
Getting a home loan on Lal Dora property can be challenging due to limited loan options.
Required Documents for Home Loan on Lal Dora Property
To apply for a home loan on Lal Dora property, you need to provide the following documents :-
Required Documents for Salaried
Main Applicant
- Photo
- Pan Card Copy
- Aadhar Copy
- Current Residence Proof
- Employee Id Copy
- Latest 3 Months Slip
- Latest 6 Months Bank Statement Salary Account
- Latest One Year Bank Statement of Saving Account
- Latest 2 Years Form-16, Part-A&B or ITR with Financial
- Running Loan Account Statement
- Processing Fee Cheque
Co-Applicant
- Photo
- Pan Card Copy
- Aadhar Copy
- Relationship Proof with Main Applicant
Property Documents
- Minimum 13 Years ownership transfer chain
- Copy of Lal Dora Certificate
- Agreement to sell copy
- Own Contribution Proof
- Seller KYC
Required Documents for Self Employee Business Owner
Main Applicant
- Photo
- Pan Card Copy
- Aadhar Copy
- Current Residence Proof
- Business Registration and Business Address Proof
- Latest 12 Months GST Return Copy
- Latest 6 Months Bank Statement Current Account
- Latest One Year Bank Statement of Saving Account
- Latest 3 Years ITR with Financial
- Running Loan Account Statement
- Processing Fee Cheque
Co-Applicant
- Photo
- Pan Card Copy
- Aadhar Copy
- Relationship Proof with Main Applicant
Property Documents
- Minimum 13 Years ownership transfer chain
- Copy of Lal Dora Certificate
- Agreement to sell copy
- Own Contribution Proof
- Seller KYC
Required Documents for Self Employee Professional
Main Applicant
- Photo
- Pan Card Copy
- Aadhar Copy
- Current Residence Proof
- Professional Education Proof
- Business Registration and Business Address Proof
- Latest 6 Months Bank Statement Current Account
- Latest One Year Bank Statement of Saving Account
- Latest 2 Years ITR with Financial
- Running Loan Account Statement
- Processing Fee Cheque
Co-Applicant
- Photo
- Pan Card Copy
- Aadhar Copy
- Relationship Proof with Main Applicant
Property Documents
- Minimum 13 Years ownership transfer chain
- Copy of Lal Dora Certificate
- Agreement to sell copy
- Own Contribution Proof
- Seller KYC
FAQs
What is Lal Dora property ?
Lal Dora property refers to land that is exempt from building bylaws in certain villages in Delhi. These properties do not have clear titles and are often used for residential or commercial purposes.
What documents are required to apply for a home loan on Lal Dora property ?
You need to provide proof of identity, proof of address, income proof, property documents, and bank statement for the last six months.
Can I get a home loan on Lal Dora property from any lender ?
Not all lenders offer home loans on Lal Dora properties. You need to look for lenders who specialize in such loans.
What are the risks involved in taking a home loan on Lal Dora property ?
The risks involved in taking a home loan on Lal Dora property include lack of clear title, lower resale value, legal issues, and limited loan options.
What are the pros and cons of buying a Lal Dora property in Delhi ?
The pros of buying a Lal Dora property in Delhi include affordability, cultural significance, and flexibility, while the cons include lack of clear title, limited amenities, and limited loan options.
