Is it legally possible for a child to buy a property owned by their parents? If yes, will a home loan be disbursed as easily as any other property transaction?
Yes, children can legally purchase their parents’ property. In this guide, we discuss how to buy a property from your parents with a home loan.
How to buy your parents’ property?
You can buy a property from your parents like any other property in the market.
- Execute a sale deed between your parents (seller) and you (buyer).
- Register the transfer of ownership rights from the seller to the buyer.
- Pay stamp duty and registration charges as per the state regulations and include property in the government records.
What are the documents required for buying your parents’ property?
- Encumbrance certificate
- Sale deed
- Property tax receipts
- General power of attorney (GPOA)
- Occupancy certificate
- Khata certificate
- Completion certificate
- No objection certificate (NOC)
How to apply for a home loan while buying your parents’ property?
Getting a home loan for buying property from blood relatives requires certain compliance:
- Proof of blood relationship
- Market value of the property
- Financial eligibility of the borrower
What are the factors for availing a home loan to buy your parents’ property?
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- Ownership: The legal property owner should be your father, mother or both (joint ownership).
- Documents: You should be able to furnish all required documents for getting a home loan, including an income certificate, address proof, etc.
- Loan eligibility: You are eligible to get a home loan based on your income, credit score and stable employment.
- Loan-to-value ratio: Home loan lenders give home loans on a specific percentage of the property’s value, that is, the Loan-to-Value (LTV) ratio. This ratio depends on the lender and the property’s location.
Can a home loan lender reject a home loan application if you are buying your parents’ property?
Home loan application rejection has no connection with the seller(s) blood relation with you. The dispersal of home loans depends on the institution and can be rejected if any of their criteria are not met.
Housing.com POV
While buying a property, most people apply for a home loan. These are given by banks and non-banking financial companies. Both have their set of regulations for the dispersal of home loans. While inter-family buying and selling may be complex, if the property documents are in place and all other required proofs are available, getting a home loan for buying your parent’s property is a cakewalk.
FAQs
Is it legal to buy your parent’s property?
Yes. If your parents, as property owners, want to sell the property to you, you can legally make the purchase.
Is a sale deed necessary to buy parents’ property?
Yes, a sale deed is necessary to buy parents’ property. If the property purchase is not registered, it may result in future problems, such as inheritance.
Do daughters and sons hold equal rights in their father’s property?
Under the Hindu Succession (Amendment) Act of 2005, daughters and sons have equal rights on their father’s property.
Is it possible for a child to take a home loan on a parent’s property?
Yes, in case the parents become co-borrowers or guarantors.
Can a home loan be transferred from father to son?
If there is a co-applicant along with the father then the loan will be transferred to him. In the absence of a co-applicant, a home loan has to be repaid by the son or daughter.
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