How difficult is the job of searching, finding and ultimately acquiring a house? Only you know because you are reading it and I know because I have done it.
Why we look for a house: The need for a house arises due to many reasons. A person doing job seeks to go for investment and tax concession coupled with a future settlement plan. Some feel it is the safest investment to make. Many do it as they have nurtured ambitious plans to own a dream shelter. Irrespective of the reasons, we feel it is a kind of decision for life time and we do lot of due diligence before going for one. In my quest for looking a house I came across many thoughts, suggestions, offers and dilemma which will help my fellow community in MS.
Prepare Yourself: As I am writing this the population of India as per world statesmen data is 1129866154 and is growing at an exponential rate each year. The primary need for everyone is to have a shelter and hence a decision to acquire the immovable property will never be a wrong decision if a proper thought process has gone into it. Best thing at preparation stage is to ask three vital questions to you.
- Do I really need a house(investment or future settlement plan)
- Am I capable of repaying the loan even in adverse conditions
- Do I have a planned approach to it?
Now that you have decided to buy a house, the following things need emphasis preferably in the same order.
Location and Type: The most important decision is on the Location of your house. There are A B and C class cities and again in these cities there are type of locations(heart or suburb, Commercial or Residential, Stagnant or emerging etc.). The other decision in this category is on the house type(independent, flat, villa, farm house, row house). This decision primarily relies on financials.
Financials: The financials(both present and future) should be driven by a proper estimation and not by our whims and fancies. You may Google for an “amortization” schedule to know the EMI for a planned loan. (I found useful tools at thetachi.org & score.org). Here you need to be careful about your range after considering future fluctuations in interest rate. It is worth to factor your salary hike along with the future obligations. A margin amount(15% aprox) is required and 85% will be the financed amount.
Scout for a loan: Now that you have decided on the basics(price range, location & type), you can look for a loan. Following points worth mentioning here:
- There are two types of loan available(1) floating rate(2) fixed rate.
- Loans can be taken up to 25 years
- Must clearly understand the Processing Fee & Pre-payment charges
- Get the prevailing rates etc from some websites and news papers.
(personalfn.com, inhome.rediff.com, outlook money, SBI, ICICI etc.)
Check for the most suitable loan for you and get a pre sanctioned loan communication to expedite the disbursement. Various documents required by the bank and different stages and whereever applicable:
Agreement for sale in favour of the applicant/applicants.
Development agreement between the builder and land owner
Encumbrance certificate for the past 13 years.
Form 16 from your employer
Khata certificate(Basic document indicating ownership)
Latest salary slip/salary
Loan papers to be signed by the applicants
Power of Attorney executed in favor of the builder(if applicable)
Proof of investment of margin money
Sale deed duly registered.
Sanctioned plan and license.
The original documents executed with the builder to be submitted
Title deeds of the builder/land owner for a period of at least 13 years.
Up to date tax paid receipts of the property.
Valuation report from qualified valuers.
Verification of the draft of the sale deed by the branch.
Your guarantors should execute the guarantee
Last word
"The most expensive piece of real estate is the six inches between your right and left ear. It’s what you create in that area that determines your wealth. We are only really limited by our mind." — Dr. Dolf de Roos: Authority