The most contentment period in a person’s life is owning a place called home. It is the toughest and yet most uncommon decision taken by people. It involves many stages and a complex cocktail of legal, financial, social and family constraints that make the purchase process tedious and cumbersome. But, with a bit of research, the right mindset and a bit of luck, you can easily find your dream home or office to live or work.
Unclear Mindset is the biggest hindrance in a property purchase. If you are unsure about what you want and where you want, then it becomes difficult to find the right dwelling for you and your family or business. To create a clear mindset, you must:
Create a budget: Map your financial capabilities and set an amount you are willing to spend on buying a property. Also, how much EMI you can afford to pay per month and your loan taking capabilities compared to your actual money in hand.
Family Consensus: Create a consensus within your family after considering all the views and their requirements for a smooth decision-making process.
Location: Decide a location where you feel part of the community with like-minded individuals or from where the school, restaurants or places of interests are near, which sets correctly within your requirements and budget with soothing pollution-free areas of Ahmedabad.
Timing: Unpredictability in the real-estate market make it perilous to purchase the property. So, decide a time to buy after making a sense of the market, set a deadline to gather required documents and finances for the availability of loans, eligibility, rate of interest etc.
Via brokers – Use brokers from family and friend’s references. Brokers usually have a specialty in certain localities and areas to search the perfect spot for you. Rarely does a broker have knowledge about all areas so pick a broker that specializes in your desired localities and come within your budget.
Via News Papers – Look into newspaper listings, advertisements, and property magazines.
Through the internet – Use portals like OLX, Quikr, 99Acres, MagicBricks and many other to find the listings, prices, and localities to zero down on the properties you like. Once you find some properties you are interested in, contact your broker or the broker listed on the portal for more realistic information.
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: Diligently follow up with your lawyer or bank staff to stay out of legal trouble. Check and read through any documents you sign to keep the legal issues at bay.
Land Holding Documents: Ensure that you check the registration papers of the property with your lawyer, officer and another buyer/ investors and it must fulfill the legal requirements and land regulations.
Legality of the property: The property 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: It is a tax, similar to sales tax and income tax collected by the local/ state/ central governments and must be paid in full and on time. Stamp duty paid instrument/document is considered a proper and legal instrument/document by the revenue department for your property value.
The liability of paying stamp duty is on 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 of the property:
Understand the total/ carpet and FSI area being provided to you by the property developer:
- 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 15-45 percent less than super built-up area provided by the property developer. This is the most important thing to know and you should calculate your purchase per square feet/ square yard in terms of carpet area of the property.
- Measure the exact size: Make sure that the property area promised to you is actually being given to you by the builder. After all, you are paying for every square foot!
- Structural Integrity: Don’t go simply by the sample house/ unit shown to you. A structural assessment of the actual property is a must by every buyer. You can take the help of a structural engineer for this.
- Essential amenities and 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 Surrounding Areas of Property:
- Access to roads and transportation
- Proximity to nearest hospital
- Proximity to schools, shops, entertainment, etc.
- Beautiful landscape, peaceful and safe surroundings
Closing the Deal:
- Before you close the deal, get the exact prices in that area, drive a good bargain during negotiations and pay what you think is the right price according to land development records.
- 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 pay for 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
Getting 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 to take a loan are:
- You must be at least 21 years of age for the loan to be sanctioned.
- The loan must terminate before or when you turn 70 years of age.
- You must be employed or self-employed with a regular source of income
Deciding a loan amount:
As it is a secured loan against property, 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 employed, put him/her as a co-applicant to avail the maximum tax benefits. The additional income shall be included to enhance your loan amount. Incidentally, if there are any co-owners, they must necessarily be co-applicants in the loan for the property.
- Due to the empowerment of women, the loan will be disbursed at a lower interest rate. For that, women should be the sole owner or co-applicant.
- Your fiance’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 loan 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 flex pay Home Loan.
- Some banks also offer a home search facility. You can check if it suits your budget.
- Check what the prepayment 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/ partner/ family member. 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 form
- 3 Passport size photographs
- Proof of identifying (photocopies of Voters ID card/ Passport/ Driving Licence/ PAN Card)
- Proof of residence (photocopies of recent Telephone Bills/ Electricity Bill/ Property tax receipt)
- Proof of business address for non-salaried individuals
- Statement of Bank Account/ Pass Book for the 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 the employer
- TDS certificate on Form 16 or copy of IT Returns for last two financial years, duly acknowledged by Income Tax Department.
Additional documents required for Professionals/self- employed/ employed/ another 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 a general guideline written with the sole purpose for the information of potential property buyers. Actual requirements for loan/ property may differ from bank to bank/HFC.