Purchasing a home is one of the best moments of your life, but it might turn out into a nightmare if you do not conduct in-depth due diligence when availing it. Poor construction quality, project delays, and loans not disbursed are among the common issues faced these days. Thus, the onus falls upon you to conduct proper due diligence before than to repent later. Also, if you are availing of a home loan to fund your home purchase, ensure to compare amongst the lenders like LIC Home Loan, ICICI home loan and others to select the one offering the best deal as per your suitability. Ignoring to do so may fetch you a home loan deal, which may cost you a lot.
Check out crucial things to do when purchasing a home:
∙ See if all your clearances are in place: Builders require taking more than forty approvals during the project’s lifetime. However, often they begin selling properties without taking any necessary approvals. When looking to purchase, ask for a land copy, which may show whether your land can be utilized for any residential purpose. If your property construction is done, look for an occupancy and completion certificate. Take the assistance of a lawyer to easily vet the documents.
∙ Check the track record of the builder: Try and get as much info as possible about the builder by approaching the site, the ministry of corporate affairs’ site and consumer forums. Check how many projects are delivered and how many are delayed, and the reasons for this delay. If possible, ensure to visit the builder’s completed projects to see the construction quality.
∙ Check which banks have allowed the projects: Before you begin the project, builders ensure to approach lenders for some capital. Before agreeing to finance the project, lenders assess the project’s viability. If you find a trusted bank funding the project, you will know it is a good project wherein you can invest and that you can avail of a loan for the home with ease.
∙ Ask for encumbrance in the case of property resale: In the case of property resale, ask for the encumbrance certificate, which states the property is completely free from any type of mortgage. Ensure all previous dues on the property are paid, including water bills and electricity. Ask the owner for a recent property tax receipt.
∙ Read the fine print carefully: Before you sign the sale deed, ensure to read all the points carefully. Check if all the promised conditions are included in your agreement. Ensure to keep a note about the possession date, mode of payment, penalties in the case of delay in possession, payment period, and penalties on payment delay. If you do not agree with any of the conditions, try changing them.
Once you select the project, the next important step is availing of a home loan. Ensure to factor in the following points:
Loan eligibility: Before you apply for a loan, compute the amount that you are eligible for. Note that you can do it even before you begin your home hunting so that you are aware of your home budget. Take the assistance of online home loan EMI calculators to figure out how much amount you can get depending upon your income. In case you feel the amount is inadequate, you may explore a joint home loan option.
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Down payment: Ensure to keep in mind that lenders fund up to 75-90 percent of the property’s value. So, you must arrange the rest of the amount along with the brokerage, registration fee and other expenditures.
Repayment tenure and EMI: Home loan is available for a repayment tenure of as high as 20-30 years. While most opt for the 20 years tenure, using an online home loan EMI calculator to calculate your home loan EMI and tenure can come across as a great help.
Rate of interest and other important charges: Presently, banks are passing on the benefits of rate cuts to the customer. Currently, you can get a home loan at a rate of interest of around 7 percent. Do remember other applicable charges for loan applications like administrative and processing fees must also be factored in.
Stepwise measures to factor in for home selection
A proper budget must be planned to know the amount that will be left every month to mitigate your expenditures. You must be assured of the fact that the property you are availing of will satisfy your current needs and be under your budget. Being a property buyer, you must understand your present needs to make the correct decision.
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It is crucial to look at the locality and location. It is recommended to try a location adjacent to your city’s prime location so that the price isn’t that high. The location also will have a major impact on the home’s resale value. Select wisely, and your home might be a great investment.
Rental rates in location
In case you are looking to invest in a rental property, ensure to look for a home in highly populated or high rent areas like at the apartments for rent in Alexandria. Having an idea about the rental rate would assist you in selecting the correct location and property.
Good resale value
Resale value is a crucial thing you must factor in before you plan to buy a property. You, as a property buyer, often do not consider the resale value when buying it. You make the error of concentrating solely on the major locality or budget of the property. If you select the incorrect location or property, it is very much possible that your sale price in future may be less than other houses around it.
Home loan eligibility basically depends upon your repayment capacity, existing loans, income, debt, and age. Lending institutions or banks offer online services like an online home loan eligibility calculator to compute your loan eligibility. The maximum loan that can be processed differs with banks, and eligibility parameters might vary as per the RBI regulations and banks.