Proximity to your work place is essential and well-developed social infrastructure like schools, colleges, hospitals, banks, malls, utility stores, etc. should be easily accessible.
It helps to have friends, family or colleagues in the locality to select your home, as it helps to get a realistic picture of the neighbourhood and also helps you figure out all the pros and cons.
It is a good idea to meet a few of the local real estate agents of the area where you want to buy your home, however it is equally important to finalise the terms and conditions as well as commissions beforehand.
It is good to go via a real estate agent but it’s always better to go to the project site, being developed and meeting the builders’ sales personnel directly.
It is not necessary to get a home loan but it definitely is a smarter choice, especially with the interest rates going down these days. Also there are many sellers/builders who will not even consider an offer if they feel the buyer is not capable of making the payment immediately.
It is an agreement to borrow money in order to purchase a property. The property is mortgaged to the lender until all the money has been repaid by the borrower. The Home Loan is repaid over an agreed time period, together with a monthly interest. Once the Home Loan is fully repaid, the property is released by the Lender from the Mortgage.
You can apply any time after you have decided to purchase or build a property, even if the property has not been identified or the construction has not begun.
It is important to choose a surrounding that has the right mix of social and natural environments. Selecting a location in a safe neighbourhood that is free of anti-social elements, is the most crucial aspect of the home buying process.
Proximity to your work place is essential and well-developed social infrastructure like schools, colleges, hospitals, banks, malls, utility stores, etc. should be easily accessible.
Repayment capacity is determined by taking factors such as age, income qualifications, number of dependants, spouse's income, assets, liabilities, stability and continuity of occupation and savings history, into consideration.
Fixed rate of interest means that the interest rates remain unchanged for the entire duration of the loan. This basically means that you do not benefit, even if the rate of interest drops in the market or vice versa.
Home loans are usually accompanied by the following extra costs:
Interest Tax: Is the tax payable on the interest paid on a home loan and not the principal. This tax is sometimes included in the interest rate of the loan, or may be charged separately as interest tax.
Processing Charge: It's a fee payable to the lender on applying for a loan. It is either a fixed amount not linked to the loan or may also be a percentage of the loan amount.
Prepayment Penalties: When a loan is paid back before the end of the agreed duration a penalty is charged by some banks/companies, which is usually between 1% and 2% of the amount being pre-paid.
Commitment Fees: Some institutions levy a commitment fee in case the loan is not availed of within a stipulated period of time after it is processed and sanctioned.
Miscellaneous costs: It is quite possible that some lenders may levy documentation or consultant charges.
EMI or Equated Monthly Instalments refers to the fixed sum of money that you will be paying to the housing finance company every month. The EMI comprises both interest and principal repayment. The size of the EMI depends on the quantum of loan, interest rate applicable and the term of the loan.
Yes. The EMI for the monthly reducing system is effectively lesser than the Yearly reducing system of calculating the Interest. Since in the Yearly Reducing EMI system of calculating EMI the principle is reduced at the end of the year, thus you continue to pay interest on a certain portion of the principle which you have actually paid back to the lender.
Tax benefits available are as under: (a) Exemption under Sec 88 of IT Act (Rebate) for repayment of principal up to Rs.10, 000/-. (b) Deduction under Sec 24 of IT Act for interest payment on housing loans up to Rs. 75,000/- (in respect of self-occupied house property acquired or constructed with capital borrowed on or after 1.4.99, and acquisition or construction whereof is completed before 1.4.2001. Tax benefits vary in case of rental.
Buying a property is a very document intensive process. Having a document checklist is an essential step towards property purchase. Listed below is a full checklist of all important documents required right from purchase to possession.
Land titles/ construction permits/ approvals from respected authorities:
Ownership of the land in favour of the builder.
Transference of property in favour of the society
Urban Land Ceiling and Regulation Act clearance certificate (if applicable)
Power of Attorney (POA) executed by the landlord in favour of the developer in case it is a joint development agreement (JDA) between the landlord and developer
Note: A JDA is when an individual landowner contributes the land while a builder undertakes development activity on it.
General Power of Attorney, establishing whether the previous Sale or Purchase was carried out by authorized person on Seller or Buyers behalf
Permission to use land for non-agricultural purpose
Original plans approved by municipal authorities (total area, number of floors, etc.)
Commencement Certificate issued by municipal authorities permitting the developer to begin construction
Completion Certificate issued by municipal authorities ensuring the building is constructed as per approved plan and is ready for habitation
Occupation Certificate issued by authorities certifying that the building is ready for occupation and construction is completed as per sanctioned plan
Sales agreement:
Check all terms and conditions fixed for sale like:
The serial number of flat and designated floor
The carpet area/built-up area and purchase consideration
Floor plan of the specified property
All the amenities lie type of construction, floorings, doors, windows, sanitary, water supply, electrical fittings, etc.
Ensure the agreement is duly stamped and signed and lays down a payment schedule
Check original stamped receipts and previous sale/conveyance deed in case of resale properties
Title clearance certificate:
Get an Encumbrance Certificate (EC) or a title clearance certificate from the sub-registrar’s office certifying that the property intended for purchase is unencumbered and has a clear marketable title
Income Tax clearance (37-I and 230 A):
A transaction is invalid if a No Objection Certificate (NOC) from the Appropriate Authority is not obtained in case of immovable properties in certain cities transacted above a certain value.
The current 37-I limits have been laid down for various cities. It is advised to check the rates with respected authorities.
The seller must obtain an Income Tax clearance certificate u/s 230 A of the Income Tax Act, 1961 specifying that the seller has outstanding dues in terms of the Income Tax payable. It is compulsory to submit this certificate at the time of registering the property
Stamp duty and registration:
Stamp duty is payable as per the true market value and rates prescribed by the Stamp office
The agreement is to be registered with the sub-registrar under the provisions of the Indian Registration Act within a period of four months starting from the date of execution
Society clearance and membership:
An up to-date no objection certificate from the society/building association for transfer and sale of flat
Obtain the share certificate from society duly transferred in the name of the buyer
TAn up to-date no dues certificate from the building association ensuring owner clearance of all the dues & that the association is custodian of all original documents
A copy of the Deed of Declaration from the building association establishing transfer of ownership to original buyer by builder
Taking possession of the flat:
Ensure that you receive the vacant possession of the flat on the date specified in the agreement
Inspect the flat with the amenities stated in the agreement and ensure that there is running supply of electricity and water in the premises
Latest Electricity Bill and Payment receipt from previous owner/builder establishing the ownership of current owner
Disclaimer: The information given here is issued in Public Interest and is based on information available on the public domain. FSD Lifespaces is not responsible for authenticity of the information and advises buyers to also take necessary precautions before purchase. These guidelines are subject to amendment by the regulatory authority/Government. FSD assumes no responsibility for updating the same on the website.
