Owning a home is a person's most fulfilling pursuit as well as the most thought about decision. With so many legal, financial, social and family constraints involved, finding the right house is a tedious process. However, with the right mindset, researched knowledge and just a little bit of luck, you can find your dream home more easily than you think. Here's our simple a plan to help you choose and buy your dream home
Make up a mindset
The biggest obstacle in finding the right home is a person's mindset. If you are not sure what you want, it will become more difficult to find the right home for you. To have the right mindset when buying a flat:
- Make a budget - What is your financial capacity? What is the most you are willing to spend? What is your monthly income? How much EMI can you afford every month if you take a loan?
- Get the consensus of your family - Make your family a part of the decision-making, taking into account their needs and requirements
- Choose a location - Decide which localities will be most suitable to your family while being in your budget. Take several factors into consideration such as:
- Infrastructural development like Banks, Schools, Colleges, Hospitals, Railway Station, Air Port, Bus Station etc
- Pollution-free zone; for instance, many housing projects in Ahmedabad are near the industrial zone posing health problems
- Choose a time to buy - Real estate markets are unpredictable so don't worry too much about timing but do get a general sense of the market and set a deadline for yourself to purchase your home
- Availability of Housing loan, your eligibility, rate of interest
Start The Search
- Through brokers - Use brokers that are referenced by your family and friends. Brokers usually have specialty in certain localities. Rarely does a broker have knowledge about all areas so pick a broker that specializes in your desired localities
- Through Print Media - newspaper listings, advertisements and property magazines
- Through the internet - from portals like 99acres.com and magicbricks.com - Don't go by the prices and flat area listed on the portal; they are often misleading. Once you find some properties you are interested in, contact your broker or the broker listed on the portal for more realistic information
- Through mouth publicity - Find new and upcoming properties in your desired locations; check the credentials of the builder - quality of construction, delivery, architecture. If you are confident of certain builders, you can focus on properties by them
Check for legal issues
- Be as diligent as possible in this step as legal issues are the number one reason for loss for property investors. Check for the following:
- Legality of the land: Make sure that the land on which the property is being built is free of litigation and conforms to land regulations.
- Legality of the property: At a minimum, he must possess:
- Raja Chitthi/ Commencement Certificate
- BU Permission/Completion Certificate of the Project
- Corporation approved plans
- Legality of the right to sell
- Obtain a copy of the title deed and get legal advice on the same
- Stamp Duty:
- Stamp Duty is a tax, similar to sales tax and income tax collected by the government, and must be paid in full and on time. A stamp duty paid instrument/document is considered a proper and legal instrument/document.
- The liability of paying stamp duty is that of the buyer unless there is an agreement to the Contrary. Section 30 of Gujarat stamp act, 1958 states the Liability for payment of stamp duty.
Survey the property:
Understand the area being provided to you:
- Super Built-up area - includes a share of open areas like elevators, staircases, atrium, which you use but is not part of your home
- Built-up area - includes the entire floor area of your home, including pillars and balconies
- Carpet area - includes the actual usable living space of the house. This can often be 15-45percent less than super built up area. This is the most important thing to know and you should calculate your purchase per square feet in terms of carpet area
- Measure the property: Make sure that the area promised to you is actually being given to you. After all you are paying for every square feet!
- Structural soundness: don't go simply by the sample unitshown to you. A structural assessment of the actual property is a must. You can take the help of a structural engineer for this.
- Essential amenitiesand facilities
- Proper electrical and cable management
- Cross ventilation
- Interior fittings
- Water connection and clean water supply
- Drainage, leakages, sewerage and garbage disposal arrangements
- Other amenities and facilities: parking, elevators, intercom, gymnasium, garden, etc
- Check the surroundings of the property:
- Access to roads and transportation
- Proximity to nearest hospital
- Proximity to schools, shops, entertainment, etc.
- Beautiful landscape, peaceful and safe surroundings
Close the Sale:
- Before you close the sale, find out about prices in that area so as to drive a good bargain during negotiations
- If you have used a broker, take his or her commission into account when arriving at the price
- Take into consideration one-time deposit on possession, and monthly outgoing in maintenance and municipal taxes
- Make sure you get a timely commitment from the builder for delivery of your flat
- Take legal advice on the title deed of the property
- Draw up an Agreement of Sale
- Decide on how you are going to finance the purchase - outright purchase or loan. Check out our home loan section to know all about loans
- Pay relevant stamp duty and register your property in the owner's name. Only after this step will you become the legal owner of the property
Get a Home Loan:
Loans are preferred by those who do not have enough capital to make an outright purchase. It is also preferred for its various tax breaks.
- Minimum criteria:
- You must be at least 21 years of age for the loan to be sanctioned.
- The loan must terminate before or when you turn 70years of age.
- You must be employed or self-employed with a regular source of income
- Deciding a loan amount: factors such as your income, age, number of dependents, qualifications, assets and liabilities, income stability/ continuity of your employment / business etc. are taken into account when assessing your repayment capacity. There are ways by which you can enhance your eligibility:
- If your spouse is earning, put him/her as a co-applicant. The additional income shall be included to enhance your loan amount. Incidentally, if there are any co-owners they must necessarily be co-applicants.
- Due to empowerment of women, loan will be disbursed at lower interest rate. For that the women should be sole owner or co applicant.
- Your fiancee's income could also be considered for sanctioning the loan on your combined income. The disbursement of the loan, however, is done only after you submit proof of your marriage.
- Providing additional security like bonds, fixed deposits and LIC policies may also help to enhance eligibility.
- Having a guarantor might enhance your credibility.
- Make sure you check the rates with all the banks before you take a home loan
- Calculate the number of years you will need to pay off the loan, the sooner the better. Even if you may have to live within a tight budget, it is better to pay off a higher sum in lesser time than stretching the loan period
- Use our EMI calculator to ascertain the monthly installments you will be paying every month and if that fits your budget
- In case you go for a fixed loan, you can switch to floating loan and vice versa for a nominal fee.
- You can also opt for flexi pay Home Loan.
- Some banks also offer a home search facility. You can check if it suits your budget.
- Check what the pre-payment rates that the bank offers. You can pay up the amount before the loan period gets over with a small penalty.
- You can also apply for a joint loan with your spouse. This gives you a lot of flexibility in terms of paying up the loan. Your salaries can be clubbed for the purpose of calculation of the loan amount. This can be done either when the property is jointly held with the spouse or when the spouse stands as a guarantor.
- List of papers/ documents applicable to all applicants:
- Completed loan application
- 3 Passport size photographs
- Proof of identify (photo copies of Voters ID card/ Passport/ Driving
- licence/ IT PAN card)
- Proof of residence (photo copies of recent Telephone Bills/ Electricity Bill/
- Property tax receipt/ Passport/ Voters ID card)
- Proof of business address for non-salaried individuals
- Statement of Bank Account/ Pass Book for last six months
- Signature identification from present bankers
- Personal Assets and Liabilities statement
- For guarantor (wherever applicable):
- Personal Assets and Liabilities Statement
- 2 passport size photographs
- Proof of identification as above
- Proof of residence as above
- Proof of business address as above
- Signature identification from his/her present bankers
- Additional documents required for salaried persons :
- Original Salary Certificate from employer
- TDS certificate on Form 16 or copy of IT Returns for last two financial years, duly acknowledged by IT Deptt.
- Additional documents required for Professionals/self- employed/ other IT assesses:
- Acknowledged copies of three years I.T. returns/ Assessment Orders.
- Photocopies of challans evidencing payment of Advance Income Tax.
Please note that the above write up is general guidelines for the information of potential buyers. The requirement may differ from bank to bank/HFC.