Irrespective of where you are in your journey to buying a house, I am going to help you get it right. To make things easier and worth for you, I am sharing everything you should know and consider when buying a house in 2021. <\/p>\n\n\n\n
Here\u2019re\nthe broad topics we are discussing in this detailed home buying guide:<\/p>\n\n\n\n
- Are you ready to buy a house<\/a><\/li>
- Buying an apartment Vs independent house<\/a><\/li>
- Arrange down payment<\/a><\/li>
- Search your dream home<\/a><\/li>
- Select a right size house<\/a><\/li>
- Home loan and financing<\/a><\/li>
- Registration, taxes other expenses<\/a><\/li><\/ul>\n\n\n\n
Are you ready to buy a house?<\/h2>\n\n\n\n
Buying\na house is a major financial decision as it involves a lot of money. And\ntherefore, even before you start looking for available residential properties\nin town, you should think through well. <\/p>\n\n\n\n
When\nyou choose to buy a house, you must consider the financial commitments that you\nhave to meet, not just once in terms of down payments, but every month in the\nform of EMI for many years to come.<\/p>\n\n\n\n
Even\nbefore you start looking for properties on sale or approach a realtor or a\nproperty agent, you should prepare yourself financially. Carefully evaluate and\nlook at your current financial position i.e. your income to expense and debt\nratio. <\/p>\n\n\n\n
Evaluating\nincome to expense ratio is seriously important, especially if you are planning\nto avail a home loan to purchase your home. Just look at your monthly income\nfrom various sources, and subtract all the expenses and bills e.g. credit card\nbills, insurance premium etc to know how much you save every month. This will\nhelp you know your financial standing to a great extent.<\/p>\n\n\n\n
Also,\nif you have any other debts like a personal loan or any other secured or\nunsecured running loan, then consider those expenses as well. Evaluating your\nfinancial position and income to expense ratio can help you decide if you are\nactually ready to buy a house.<\/p>\n\n\n\n
Another\nimportant thing to consider when buying a house is to know what kind of\nproperty you need and you can afford. Buying a home is a huge financial\ndecision, but it is an emotional decision as well, which means people often get\ncarried away and ignore the affordability and their financial standing. Ideally\nthat should not be the case.<\/p>\n\n\n\n
So, after evaluating everything, if you feel you can commit to buying a house then you are good to go. Otherwise, it will be wise for you to wait a little, and increase your monthly earning and savings.<\/p>\n\n\n\n
Buying an apartment Vs Independent house?<\/h2>\n\n\n\n
When\nyou have decided to buy a house, the very next step is to decide upon the kind\nof house you want to buy. There are different types of houses available e.g. an\napartment in a residential complex, an independent house like a bungalow or a\nvilla in a developing society or a resale independent house available in town.<\/p>\n\n\n\n
The default choice for buying a property is obviously a flat or an apartment, especially in major cities in India and around the world.<\/p>\n\n\n\n
The simple reason to buy an apartment or a flat over an independent house can be summed up as: <\/p>\n\n\n\n
- Cheaper property price than independent house<\/li>
- The ease of financing through housing loan<\/li>
- Better lifestyle features and amenities<\/li>
- Safety and security of the family<\/li>
- Cheaper property maintenance cost<\/li><\/ul>\n\n\n\n
Let\u2019s\ncheck these factors in detail so that you can decide which is better for you,\nbuying an apartment or buying an independent house.<\/p>\n\n\n\n
Buying a flat is cheaper than an independent house<\/h4>\n\n\n\n
Usually, it costs less for buying an apartment than buying an independent house. Apartments are developed as multi-storied buildings, and the cost of development when divided into individual flats, comes a lot less than building the same size independent house. Another reason why buying an independent house can be costlier is because of the high price of the land, especially at good locations in a posh locality.<\/p>\n\n\n\n
It\u2019s easier to get housing loan<\/h4>\n\n\n\n
Secondly, if you are planning to avail a housing loan, the chances of getting your loan approved and processed is much faster when you are buying an apartment than buying an independent house. Most of the private and public banks or lenders who offer housing loans approve major projects for housing loans. Also, the builders and developers approach those banks for pre-approval of projects. And therefore the banks can process and approve loans faster when you buy an apartment than approving a loan for buying an independent house.<\/p>\n\n\n\n
Apartment offers better lifestyle<\/h4>\n\n\n\n
Apartment\noffers luxurious lifestyles as most of the residential complexes these days are\nloaded with lifestyle features like continuous power backup, a swimming pool,\ngym, and games room, and community center, club, shopping complex and what not.\nThese modern lifestyle features and amenities make buying an apartment even\nmore attractive than an independent house.<\/p>\n\n\n\n
Although all these amenities and features can be built or added in an independent house, especially in a bungalow or a villa, it involves a lot of investment. Moreover, it\u2019s not just about a one time investment in adding these lifestyle amenities and features; you have to spend a lot of money every month in maintaining these facilities.<\/p>\n\n\n\n
Safety and security<\/h4>\n\n\n\n
Safety and security<\/a> is another factor that makes buying an apartment the better choice than buying an independent house. In most of the gated communities and residential complexes, the resident feels much safer as there are security guards. Anyone entering the complex has to go through the security gate and only after your confirmation a visitor will be able to reach your flat. The guards are constantly monitoring the common areas through the CCTV cameras and thus you feel safer. These safety facilities help protect your home<\/a> from burglary and theft.<\/p>\n\n\n\n
Same\nis not the case in an independent house. Of course you can hire security guards\nand even install CCTV cameras, but the monthly expenses for such security\nmeasures is going to be much more than what you pay as monthly maintenance in a\ngated community.<\/p>\n\n\n\n
Cheaper maintenance cost<\/h4>\n\n\n\n
The\nproperty maintenance and repairing costs can be huge in case of an independent\nhouse. Usually the property maintenance cost and repairing expenses are less\nfor individual flats owners and in most cases, the monthly maintenance cost\ncomes at around Rs. 2 to Rs. 3 per sq ft of space in case of flat and apartment.\nHowever, the cost of maintenance for an independent house can go much more than\nthat.<\/p>\n\n\n\n
Therefore,\neven though you always wanted to construct a house of your dreams on a huge\nsize plot, consider all these pros and cons of buying an apartment Vs buying an\nindependent house. Only after considering these advantages and disadvantages\nyou should take a call on buying a house.<\/p>\n\n\n\n
However,\nif you have to take my words, I think buying an apartment is much better than\nbuying an independent house. But obviously, only you can decide which types of\nhouse will work well for you, an apartment or an independent house.<\/p>\n\n\n\n
Arrange down payment<\/h2>\n\n\n\n
Now\nthat you have decided to buy a home, it\u2019s time to save and arrange money for\nthe down payment to buy a house. You can avail home loans from banking and\nfinancial institutions, but they will not fund the entire cost of property.<\/p>\n\n\n\n
The bank or the lending institution can finance anywhere between 75% to up to 90% value of the property. Maximum loan to value (LTV) of property is predefined by the Reserve Bank of India (RBI<\/a>) Which does not allow a bank to finance more than 90% of the property value.<\/p>\n\n\n\n
However,\nthe exact percentage of loan that you may get depends on various factors and\ntherefore it is safe to assume that if you have all the papers and documents\nand your credit score is good, you may be able to get anywhere between 75-80%\nof the property value financed as home loan. <\/p>\n\n\n\n
However,\nthe exact amount of home loan that you may be eligible for depends on your\ncredit score and income. The lender would like to check your tax returns for at\nleast the past three years along with other documents. The remaining amount\ni.e. roughly 20-25% of the property value has to be paid by you as down\npayment. <\/p>\n\n\n\n
As\nyou have decided to buy a house, you may have already saved the amount to be\npaid as down payment. But, if you have not, then this is the high time you\nstart saving and arranging money for the down payment for buying your new home.<\/p>\n\n\n\n
How to save money for buying a house or a flat?<\/h3>\n\n\n\n
They say, earning money is difficult, saving money is even more difficult. However, if you are seriously willing to save money<\/a> for buying a house or a flat, then you may like to follow some of these simple yet effective money saving hacks.<\/p>\n\n\n\n
![\"How](\"https:\/\/www.servicesutra.com\/blog\/wp-content\/uploads\/how-to-save-money-for-buying-a-house-or-a-flat.jpg\")
<\/figure><\/div>\n\n\n\nNote down your income and expenses<\/h4>\n\n\n\n
Unless you review and analyze your expense, you may not get to know where your hard earned money is disappearing. So, list down all your monthly expenses, no matter how small it may be. Classify your expenses as necessity and leisure. <\/p>\n\n\n\n
Analyze your income to expense ratio<\/h4>\n\n\n\n
Now,\nevaluate both the expense heads for the last couple of months and you will find\nmany expenses that you can get rid of. You can easily get rid of some of the\nexpenses listed under the leisure category.<\/p>\n\n\n\n
Start saving every month<\/h4>\n\n\n\n
Save that money and possibly invest in equity, mutual funds or recurring deposits. If you don\u2019t already have a bank account then you may like to open a savings bank account now. When opening an account, just see to it that you have the net banking facility as you\u2019ll need that for investing in Mutual Fund etc. Also, if you want to get into direct equity investing, then you need to have a demat account.<\/p>\n\n\n\n
Invest to get better return<\/h4>\n\n\n\n
Equity\nand mutual fund investments are supposed to give better returns than the usual\nbank savings e.g. fixed deposits or monthly recurring deposits. So, whatever\namount you are able to save and invest, learn and invest carefully and wisely\nas per your goal and risk appetite.<\/p>\n\n\n\n
Monetize your skills<\/h4>\n\n\n\n
In order to save and invest more money for buying a flat, you have to increase your income and savings. So find ways to cut your monthly expense and increase your monthly income slowly. You can start a blog, teach online, make YouTube videos<\/a> to teach or share product reviews, tell a good story i.e. do whatever you are good at and find ways to monetize your skills to earn more and save to buy a house.<\/p>\n\n\n\n
Increase monthly saving slowly<\/h4>\n\n\n\n
When\nyou get an increment, invest that amount to increase your savings instead of\nspending that money on things you may not require immediately.<\/p>\n\n\n\n
Saving\nmoney is all about discipline and habits. If you are willing to tweak your\nspending habits then you can easily course correct, decrease your expenses and\nincrease your monthly saving. No matter how small, you should start saving. <\/p>\n\n\n\n
Also,\nI personally follow a simple rule for saving i.e. Earn. Save. Spend. No matter\nhow much you are earning, you got to save a portion of that earning for your\nfuture and spend what remains after saving and investing. Not the otherwise\ni.e. earn, spend and then whatever is left will be saved.<\/p>\n\n\n\n
Search for your dream home<\/h2>\n\n\n\n
While you are already taking steps and saving money to manage down payment to buy a house, you should start searching for a suitable property. Searching for your dream home that suits your requirements and budget can be time taking and overwhelming. Moreover, if you trust in Home Vastu Shastra<\/a> and you are looking for a Vastu friendly home then it\u2019s going to be even more difficult. However, there are ways to search the best properties in town and here\u2019s how you should search for the right kind of property.<\/p>\n\n\n\n
How to search for your dream home the right way?<\/h3>\n\n\n\n
Searching\nand finding the right kind of property is one of the most essential and\nimportant steps for buying your dream home.<\/p>\n\n\n\n
One of the most essential and important steps of buying a home is to find a few of the available properties that meet your space requirements, budget and other priorities like neighborhood, view of the house, size of the property, common amenities and features<\/a> you want in your new house.<\/p>\n\n\n\n
When\nyou buy a house, you should not just buy a house. You should buy the complete\nexperience and that\u2019s when you will be able to make it your dream home.<\/p>\n\n\n\n
Here\nare a few of the resources and ways you may like to try to find the best match\nproperty.<\/p>\n\n\n\n
![\"Easy](\"https:\/\/www.servicesutra.com\/blog\/wp-content\/uploads\/easy-ways-to-search-best-property-to-buy.jpg\")
<\/figure><\/div>\n\n\n\n- Search online on realty portals and websites like magicbricks.com, housing.com etc<\/li>
- Ask your friends and family for recommendations<\/li>
- Browse through the classified website like olx, quikr, craigslist etc<\/li>
- Classified ads in print and news papers<\/li>
- Attend property fairs happening near you<\/li>
- Contact realtors and property agents<\/li>
- Contact developers and builders<\/li>
- Browse though property related groups on social media sites like facebook<\/li><\/ul>\n\n\n\n
Ideally,\nyou should check one or more of these resources and make a list of a few\npotential properties that you can choose from. Don\u2019t hesitate to make a list of\nmany possible properties so that you have multiple options to choose from.<\/p>\n\n\n\n
How to choose the right location for buying a house?<\/h3>\n\n\n\n
Choosing\nthe right location for buying a house is one of the most important decisions\nyou will make. Location of the property matters a lot. And therefore, when you\nare buying a house you have to look for the right location, if not the best. <\/p>\n\n\n\n
However,\nproperties in high end and well developed areas are going to be costlier than a\nneighborhood that\u2019s still developing or is underdeveloped. But, that should not\nbe a concern for you, especially when you are on a budget. Just see to it that\nthere is possibility of future infrastructure development and if that\u2019s the\ncase, the area will certainly develop in no time.<\/p>\n\n\n\n
Here\nare a few things to consider when choosing the neighborhood and location for\nbuying a home.<\/p>\n\n\n\n
- Area should have basic infrastructure and livability quotient<\/li>
- Distance from your office and schools for your kids<\/li>
- Public transport and connectivity to that area like bus, metro etc<\/li>
- Accessibility of basic amenities like markets, shopping complex, nursing home etc<\/li>
- Possibility of future expansion in social infrastructure like road, drainage etc<\/li>
- Future appreciation of property value in that neighborhood<\/li>
- The area should be clean, peaceful and safe for living<\/li>
- Connectivity to the Airport, Railway station and interstate bus terminus<\/li><\/ul>\n\n\n\n
The idea is to look for a location and neighborhood that is good, safe, peaceful and well connected to other major destinations in the city. <\/p>\n\n\n\n
Which types of house is best to buy?<\/h3>\n\n\n\n
Now\nthat you know which location is best for you to buy a home, it\u2019s time to look\nat the various types of properties available near you. <\/p>\n\n\n\n
Typically,\nyou will find three types of properties, such as:<\/p>\n\n\n\n
- Under construction house<\/li>
- Ready to move house<\/li>
- Resale properties<\/li><\/ul>\n\n\n\n
Each\nof these property types offers different benefits. Let\u2019s take a look at the key\nfeatures of each of these properties types so that you can choose the right\ntype of house for buying.<\/p>\n\n\n\n
Under construction house<\/h3>\n\n\n\n
Under\nconstruction properties are usually priced lower than a ready to move property.\nMany developers provide launch offers at the beginning stage of construction\nand if you can manage to book in the early construction stage, you may get some\nprice advantage.<\/p>\n\n\n\n
However,\nthere are many under construction properties that have missed the handover\ndeadline, and that makes such properties less attractive. If anything goes\nwrong due to legal complications or the market crashes for some reason, then\nthat may simply delay the completion of the project. <\/p>\n\n\n\n
Another\nimportant thing to note may be the social infrastructure because in early\nstage, usually the neighborhood may not be well developed. However, due to\nearly booking at a better price, you can expect a lot of appreciation in the\nvalue of the property within a few years.<\/p>\n\n\n\n
Usually\nsuch under construction housing complexes and properties get approval from the\nbank, and therefore getting a home loan should not be an issue. <\/p>\n\n\n\n
All\nin all, if you are buying a house for immediate move in, then these types of\nproperty may not suit you, unless you are buying at a stage where the majority\nof construction work is already done. These kinds of houses and properties are\nmost suitable for buyers who are looking for value appreciation or ones who\ncan’t wait for a few years to get possession and handover. <\/p>\n\n\n\n
Ready to move house<\/h3>\n\n\n\n
Buying\na house in a ready to move complex has its own advantages. These types of\nprojects and properties are priced a little higher than the under construction\nhousing properties. There is no risk of delayed possession and handover as the\nconstruction is usually complete and you can move in immediately. However, you\nshould check the quality of construction of the building carefully before\nbuying a ready to move house.<\/p>\n\n\n\n
Buying\na ready to move house may cost a little more, but there is no risk involved and\nthat makes it the best option for homebuyers who are not looking for cheaper\nrates and better return on investment. Rather they want to buy a house to move\nin immediately.<\/p>\n\n\n\n
Resale property<\/h3>\n\n\n\n
Third\ntype of property option is the resale property. Buying a resale house is not a\nfavorite for many of us, but it may be advantageous at times, especially in\ncase of distress sale. Prices are usually the same or a little lower than the\nstandard market rates in the area. There is no risk involved as you can get\nimmediate possession and you don\u2019t have to wait for it. And another benefit is\nthat if you get a fully furnished house, then you can save on the interior\ndecorating expenses to some extent. All in all a resale home buying may or may\nnot suit you, depending on how you look at it.<\/p>\n\n\n\n
Select a right size house<\/h2>\n\n\n\n
Buying\na house is also an emotional decision and any homeowners get carried away after\nlooking at the properties and end up buying costlier or bigger homes than they\nactually need. Ideally, you should consider the size and budget of the house\nwhen searching and choosing a home for buying.<\/p>\n\n\n\n
Searching,\nsort listing and choosing a home can be overwhelming because you will often\nfind homes that will match just a few of the criteria. And when everything\nmatches your expectation, then it may be a little more than your budget.\nHowever, you should not feel frustrated and tired. The best you can do is\nsearch many properties that match most of your expectations and then sort and\nchoose a home that suits you the most.<\/p>\n\n\n\n
Here\nare a few of the things you may like to consider when choosing a house:<\/p>\n\n\n\n
- Affordability and the cost of the property, plus other expenses e.g. registration, interior and exterior house design<\/a> and decoration cost, furnishing expenses etc<\/li>
- Overall size of the house and number of rooms<\/li>
- Condition of the house in case you are buying a resale property<\/li>
- Number of bedrooms and bathrooms you need<\/li>
- Amenities like swimming pool, gym, games room, community hall, front and back view etc<\/li>
- Utility expenses in the neighborhood<\/li>
- Registration expenses and property taxes<\/li><\/ul>\n\n\n\n
Ideally,\nyou should list all our priorities in an order and then choose a property that\nmatches most of the features you want in your dream.<\/p>\n\n\n\n
Size of the house \u2013 carpet, built up and super built up area<\/strong><\/h3>\n\n\n\n
As\nyou already know homes are priced based on the size of the house. When you meet\nthe realtors and developers to buy a house, you often hear the say carpet area,\nbuilt up area and super built up area. If you are not sure what that means,\nthen let me explain it to you.<\/p>\n\n\n\n
What is the carpet area of the house?<\/h4>\n\n\n\n
Carpet\narea is the wall to wall measurement of the house, including balconies and\nclosets and excluding any common space.<\/p>\n\n\n\n
What is the built up area?<\/h4>\n\n\n\n
Built\nup area is the wall to wall measurement of the house including walls and\nexcluding common space. It\u2019s generally 10% higher than the carpet area.<\/p>\n\n\n\n
What is a super built up area?<\/h4>\n\n\n\n
Super\nbuilt up area is the built up area plus the proportion of the common space of\nthe building such as staircase, lobby, elevator etc and excluding terrace,\ngarden and parking space.<\/p>\n\n\n\n
Your\ndeveloper will charge you on the basis of the super built up area. However, you\nshould carefully evaluate and consider the actual carpet area of the house when\nbuying. If the carpet area matches your size and space requirements, then you\nshould zero in on the property for buying. <\/p>\n\n\n\n
Property inspection checklist to choose the right house<\/h3>\n\n\n\n
Choosing your dream home requires a lot of efforts, and depending on which types of property or project you are evaluating, you may have to put in efforts to ensure that you are buying it right. Here\u2019s a quick property inspection checklist<\/a> that\u2019ll help you evaluate the property from a different point of view and you won\u2019t miss out on anything essential.<\/p>\n\n\n\n
- Visit the site at different times of day to know what to expect from that area.<\/li>
- Ask and investigate about the water logging issues in the area, as that could be the biggest drawback during the monsoon. You can even visit the site during the monsoon to see what it looks like on a rainy day.<\/li>
- Carefully evaluate the construction quality by looking for any crack\/moisture\/damp\/fungus etc in the walls and ceiling.<\/li>
- Look at the quality of fittings in the bathroom, kitchen and other applicable areas.<\/li>
- Any types of cracks on the outer or interior walls may be due to the poor quality of construction.<\/li>
- Meet the onsite engineer to ensure that the construction is done as per the planning and structural drawing.<\/li>
- Look at the number of lifts in every block.<\/li>
- Which lift is installed, is it a manual one or an automated one?<\/li>
- Look for the power backup facility and the capacity of the power backup for every flat.<\/li>
- Evaluate the water treatment plant and its capacity<\/li>
- Carefully look at the wiring and electric points, especially for Air Conditioner<\/li>
- Mobile network is another big concern these days and therefore carefully see if you are getting proper network in the flat you are planning to buy.<\/li>
- Operate the toilet flush to check if it\u2019s working and the water pressure is good.<\/li>
- Carefully check for any types of leakage in the walls, ceilings, under sinks etc mainly in the kitchen and bathroom area.<\/li>
- Carefully evaluate the safety features like CCTV camera, security guards and other safety measures.<\/li>
- Look at the emergency fire installations and if that is enough. <\/li>
- Check for a fire audit certificate which is offered by the fire safety department to be double sure that the building or the complex meets the fire safety standards.<\/li><\/ul>\n\n\n\n
This\nis a tentative property inspection checklist that covers most of the essential\nthings you should look for. But, feel free to add any other task to this list\nand evaluate the property well before selecting.<\/p>\n\n\n\n
How to negotiate the property price?<\/h3>\n\n\n\n
Did\nyou know that prices for homes on sale are not fixed, and there is always a\nchance to negotiate well and bargain for a better deal? <\/p>\n\n\n\n
Yes,\nyou heard that right.<\/p>\n\n\n\n
Here\u2019re\na few of the quick and easy hacks that\u2019ll help you to negotiate the property\nprice and get better rates and offers from the developer or the seller.<\/p>\n\n\n\n
- First of all, find out if it\u2019s a distress sale i.e. the seller is in a hurry to sell it out.<\/li>
- Even if you are interested, don\u2019t get overexcited and show your immediate interest.<\/li>
- If you have noticed drawbacks in the property, then highlight that.<\/li>
- Research about the general property pricing trend in the neighborhood.<\/li>
- Start negotiation with 10% lower than the asking price.<\/li>
- Bargain for cheaper rates as well as some freebies like extra AC points or free false ceiling or an independent car parking?<\/li><\/ul>\n\n\n\n
The\nidea is to try everything that can help you bargain with the developer.\nRemember that even if you are able to negotiate Rs. 100 per square feet, it\u2019s\ngoing to be a lot of money for 1200 sq ft flat.<\/p>\n\n\n\n
Home loan and financing<\/h2>\n\n\n\n
Home\nloans are easily available these days from banks and other lending institutions\nfor buying a house. However, there are multiple banks offering housing loans at\ndifferent interests and with different features. If you are buying a house and\nyou are wondering about how to avail home loan and arrange secured finances to\nbuy a house then I have got you covered.<\/p>\n\n\n\n
In\nthis section, we are talking about everything worth knowing about home loans,\nrate of interest, application process, loan eligibility criteria, and much\nmore.<\/p>\n\n\n\n
What is a home loan?<\/h3>\n\n\n\n
A home loan is a secured loan that can be availed by eligible home buyers to purchase a house. Home loans are offered by national and private banks and other financial institutions. When you borrow money to buy a home, the lender keeps the property as mortgage and therefore it is considered to be a secured loan. Home loans can be repaid through EMI (equated monthly installment) and once you repay the entire loan amount (loan amount plus the interest) you get the papers of the property. <\/p>\n\n\n\n
Home\nloans are primarily meant to help an eligible home buyer in buying a house.\nHowever, some of the banks and lenders also offer home loans for repair and\nmaintenance related expenses. Moreover, different banks offer home loans at\ndifferent rates of interest and they may charge some processing fees, it will\nbe wise for you to check loan offers from multiple banks and institutions\nbefore applying for a home loan.<\/p>\n\n\n\n
What\u2019s the documentation for a housing loan?<\/h3>\n\n\n\n
Housing\nloans involve huge amounts of money and usually the tenure of the loan is more\nthan 15 years and therefore banks will ask for different types of documents.\nApart from the following documentation, the person must be salaried or a self\nemployed and should file income tax returns.<\/p>\n\n\n\n
Here\u2019s\na quick checklist of documents that may be required for a housing loan in\nIndia.<\/p>\n\n\n\n
- Filled and signed home loan application form obtained from the bank or the financial institution.<\/li>
- A cheque toward the loan processing fee which is non-refundable and amount varies from bank to bank.<\/li>
- Three color passport size photographs from the front.<\/li>
- Proof of identity e.g. PAN card, driver\u2019s license, Aadhar card or passport<\/li>
- Current residential address proof e.g. driver\u2019s license, passport, ration card, recent telephone or electricity bill.<\/li>
- Proof of salary e.g. copy of income tax returns (last three years) and original salary slips or proof of business in case of a self employed applicant.<\/li>
- Income tax returns with computation of income for the last three financial years, along with tax payment challans.<\/li>
- Balance sheet and profit and loss account for self-employed individual<\/li>
- Bank statements or passbooks showing the transactions for the last six months or so.<\/li><\/ul>\n\n\n\n
Apart\nfrom that, the banks will also ask for some papers and documents related to the\nproperty. These documents are usually provided by the developer if you are\nbuying from a developer. <\/p>\n\n\n\n
If\nyou are buying a resale property from an individual then the bank may ask for a\nsearch report, sale deed registered in the name of the owner from whom you are\nbuying the property, mutation certificate and property tax receipts etc. If you\nare taking out a loan to buy a resale house, then your bank will advise you\nabout the specific documents they need related to the property. <\/p>\n\n\n\n
What’s the credit score?<\/h3>\n\n\n\n
Credit\nscore as the name suggests is a numerical score that represents a person\u2019s\ncreditworthiness or his\/her ability to repay a loan. The credit score (CIBIL)\ncan range from 300 to 900, and a higher score represents better credit history\nacross different loans including your credit card bill payment history. When\nyou have a higher credit score, you can expect to get easier approval for\nyour local application. <\/p>\n\n\n\n
A\nlower credit score can easily lead to rejection of your housing loan\napplication and therefore, if you are planning to avail housing loan to buy a\nhome, you should be mindful of maintaining a good credit score.<\/p>\n\n\n\n
Here\u2019re\na few ways to maintain good credit score:<\/p>\n\n\n\n
- Pay all your bills on time e.g. any existing loan EMI and your credit card bills. If you miss or default your credit card bill payment or paying EMI of an existing personal loan, car loan etc, it badly affects your credit score. <\/li>
- If you don\u2019t have a credit card, then maybe have one and use it with discipline i.e. make payment through cards and always pay the credit card bills within the due date as it will boost up your credit score.<\/li>
- Don\u2019t check your credit score too often \u2013 i.e. for instance when you apply for a credit, your credit score is calculated and too many and too frequent requests make you look like a credit hungry person and that may affect your credit score badly.<\/li><\/ul>\n\n\n\n
Maintaining\ngood credit history is seriously important to get any type of credit or a\nhousing loan. If you are planning to apply for a housing loan, then you should\nstart improving your credit score from today.<\/p>\n\n\n\n
Tips to choose the best home loan in India<\/h3>\n\n\n\n
Most\nof the private and national banks in India offer housing loans for buying a new\nflat or constructing a new house. There is no shortage of lenders, especially\nfor those who have a good credit history and are in a position to repay the\nloan.<\/p>\n\n\n\n
However,\nevery housing loan is not the same. Housing loans from different banks may\ndiffer in terms of processing fees, rate of interest, repayment tenure and\nother features. And therefore, it is always better to compare and review a few\nof the best loan offers and then choose the best home loan that offers you more\nflexibility and lower interest rates.<\/p>\n\n\n\n
Here\nare a few things you may like to consider when choosing a housing loan for\nbuying a flat.<\/p>\n\n\n\n
- One of the most important things to look at while choosing a housing loan is the rate of interest.<\/li>
- Ideally, you should look for loan offers that offer the lowest rate of interest.<\/li>
- To get a better idea of the rate of interest of a particular bank, compare the interest rate for past few months and see how they fare against their peers.<\/li>
- The next important thing you should look at when choosing a housing loan is the repayment terms. <\/li>
- You should look for loan offers that offer better repayment flexibility e.g. you should be able to repay the full or part of loan amount when you want.<\/li>
- Similarly, you should have the option to repay extra EMI every quarter or year without any charge.<\/li>
- Portability is another feature that you should look for \u2013 you should be able to easily transfer the loan to another eligible individual, in case you wish to sell your house.<\/li>
- Turnaround time is yet another feature that you should consider. Ideally you would want a housing loan from a bank that can process and release funds faster and without much hassles.<\/li>
- Also, look for the processing fees and any other hidden charges e.g. valuation fee, prepayment fees, and other miscellaneous charges and fees.<\/li>
- Negotiate well for any concession or fee waiver <\/li><\/ul>\n\n\n\n
Home loan interest rates<\/h3>\n\n\n\n
Usually\nthere are three types of interest at which a home loan can be offered by a\nbank:<\/p>\n\n\n\n
Variable\ninterest rate<\/strong>\n\u2013 The rate of interest for such housing loans may go up or down as per the\nofficial cash rate of the bank.<\/p>\n\n\n\n
Fixed\ninterest rate<\/strong>\n\u2013 as the name suggests, the rate of interest is fixed for such loans, and\ntherefore the applicable rate of interest will remain the same for the entire\ntenure till the loan is repaid.<\/p>\n\n\n\n
Mixed\ninterest rate<\/strong>\n\u2013 in this case the rate of interest for your housing loan is going to be the\ncombination of fixed and variable rate i.e. rates can be fixed for certain\nduration and it may change after that.<\/p>\n\n\n\n
As\na buyer, you should evaluate the entire loan schedule to get a better\nunderstanding of the total amount that you have to pay. Naturally, you should\nchoose one that costs you less and offers more flexibility than the other loan\noffer.<\/p>\n\n\n\n
How do I apply for a housing loan?<\/h3>\n\n\n\n
Once\nyou have researched about the banks and lending institutions, here\u2019s how you\ncan apply for a housing loan. <\/p>\n\n\n\n
You\ncan directly contact a branch near you or you can apply for a loan online\nthrough the website of the banks. Once you share your interest for a home loan\nonline or offline, usually the banks will take it forward from there. They\nshould share the loan application form and share the documentation required\nalong with the processing fees if any.<\/p>\n\n\n\n
Fill\nup the application form carefully, attach all the documents required e.g.\ngeneral KYC documents like PAN card, Aadhar card, Address proof, income tax\nreturn of last three years, bank statement etc, along with the processing fees.<\/p>\n\n\n\n
Once\nyou submit the filled home loan application form, the bank will verify all the\ninformation and may approve or reject your application. Banks usually evaluate\nyour credit score and check your ability to repay the loan amount you are\nasking for. The banks also need to ensure that the property you are buying is a\nfree hold property and has all the clearance and approvals from required\nauthority.<\/p>\n\n\n\n
After\nevaluating your eligibility for loan, the property you are interested in and\nyour ability to repay the amount, if they decide to approve your application,\nthen a representative of the bank or third party will visit your home to verify\nyour address. Some banks verify both residential and work addresses and such\nverification is usually carried out by a third party company or an independent\nservice provider authorized by the bank.<\/p>\n\n\n\n
Once\nthe verification is over and everything is found to be satisfactory as per\ntheir finding and evaluations, the bank will finally approve your loan and\nprepare the agreement. They will contact you and set a schedule for final\ndocumentation. Make sure to carry all the original documents you have provided\nto the bank like PAN card, Aadhar card etc when you visit them for signing the\nloan agreement.<\/p>\n\n\n\n
However,\nyou should read the loan agreement very carefully because no matter what the\nrepresentative or your loan agent might have told you, this final agreement\nbetween you and the bank is going to be the final document that talks about the\nloan amount, rate of interest, EMI amount, date and other terms and condition\nof the housing loan.<\/p>\n\n\n\n
Hence,\nyou should read the loan agreement carefully, and if there is any doubt or you\nare unsure about any clause, then you should get that clarified and sorted\nbefore signing the agreement.<\/p>\n\n\n\n
Once\nthe loan is approved, the bank can release full funds in case of resale or a\nready to move house. If you are buying an under construction house, then the\nbank will release the amount as per the development schedule and demand by the\ndeveloper. In case of under construction property, payment is linked with the\nprogress of construction and therefore when the developer sends a demand notice\nfor payment, you have to forward it to the bank and the bank will pay directly\nto the developer. <\/p>\n\n\n\n
Things to check before signing the housing loan agreement <\/h3>\n\n\n\n
After\nevaluating your application and all the documents, if the bank or the lender\ndecides to approve your housing loan, then they will prepare a loan agreement\nthat has to be signed by you. Housing loan being a huge financial commitment,\nyou should carefully read and understand the agreement before signing. <\/p>\n\n\n\n
Here\nare a few of the important things to consider before signing the agreement and\naccepting the home loan offer to buy a house.<\/p>\n\n\n\n
![\"Things](\"https:\/\/www.servicesutra.com\/blog\/wp-content\/uploads\/things-to-check-when-accepting-a-housing-loan-offer.jpg\")
<\/figure><\/div>\n\n\n\n- Amount of loan sanctioned by the bank<\/li>
- Applicable rate of interest rate on your housing loan<\/li>
- Type of interest applicable e.g. floating, fixed or mixed interest rate<\/li>
- What\u2019s the process of disbursement of the sanctioned loan amount<\/li>
- EMI \u2013 amount, number of EMIs and date of payment for EMI<\/li>
- Home loan tenure \u2013 i.e. number of years by when you have to repay the entire amount<\/li>
- Other terms and conditions of the loan and repayment.<\/li><\/ul>\n\n\n\n
It\u2019s\nseriously important to study the document and only after understanding\neverything terms and features, you should go ahead and sign the document.<\/p>\n\n\n\n
Registration, taxes and interior design expenses<\/h2>\n\n\n\n
I\nhave said it earlier and I am saying it again \u2013 buying a home is a huge\nfinancial commitment. If you have decided to buy a home, you must be\nfinancially prepared and committed. You might have saved for the down payment\nand can apply and get a housing loan as well. <\/p>\n\n\n\n
But,\nthere is more to it. Apart from the property price, you have to manage the\nmargin money to cover other expenses like registration, stamp duty, mutation,\ninterior decorating and move in expenses. <\/p>\n\n\n\n
Consider\nthese expenses and cost heads as well so that you know about your financial\ncommitments well in advance.<\/p>\n\n\n\n
Stamp\nduty <\/strong>\u2013\nthe charges may vary from state to state, but it would be safe to assume it\u2019s\ngoing to be nearly 4-5% of the property value. So if you are buying a flat\nworth 400000, you may end up paying around Rs. 160000-200000 in stamp duty.<\/p>\n\n\n\n
Registration<\/strong> \u2013 may cost around\n1% of the property value or maximum of Rs. 30000.00 <\/p>\n\n\n\n
Brokerage<\/strong> \u2013 if there is a\nbroker involved then you may have to pay around 1-2% of the property value as\nbrokerage fees.<\/p>\n\n\n\n
GST<\/strong> \u2013 GST is also\napplicable @ 12% on all under construction properties. However, it\u2019s NIL for\nready to move properties or in completed projects.<\/p>\n\n\n\n
Interior design <\/strong>\u2013 you are most likely going to buy an unfurnished flat and if that\u2019s the case, then you have to spend some money in decorating the flat. Depending on the level of interior designing<\/a> work you want to carry out, you may have to spend anywhere between 10%-15% of the total property value. Interior designing costs depend on several factors. However, the majority of the money is going to be spent in carpentry related works, ten false ceilings , lighting and painting. 3 BHK interior design cost in Kolkata<\/a> or other metro cities in India can well run between Rs. 7.5-10 lakh, and hence this could be a major cost head worth considering. However, interior designing can be done at a later date, or you may not need to do it completely. So think of it as an optional expense.<\/p>\n\n\n\n
- Affordability and the cost of the property, plus other expenses e.g. registration, interior and exterior house design<\/a> and decoration cost, furnishing expenses etc<\/li>
- Buying an apartment Vs independent house<\/a><\/li>