Buying a property is not easy. But, it can be made easy by preparing for it. There are defined procedures to buy a property. Ensure you are making the right choice when buying a property. Once the decision is made, consider the following points:
1. Funding: Before you buy a property, you must arrange the funding required. Long term or short term savings may be utilized. This is the ideal option if you have enough savings for other purposes. It will leave you debt-free.
If you are planning to buy a property in the future, start investing. Otherwise, you can depend on banks or financial institutions. Banks generally finance 75% of the property price. To avail of this, 25% must be paid via down payment. If you do not have enough savings, it is not advisable to avail of another loan. Borrowing money from close friends or family is a better option.
2. Pre-approved loans: Banks offer pre-approved loans to long term customers or at times even to new borrowers. To get a pre-approved loan, you must apply for it. Banks will consider your credit report and another criterion before sanctioning the loan.
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Make sure to maintain a good credit report to get the loan approved. A pre-approved loan is given before the purchase of the property. This reduces the risk of banks turning down your loan at the last moment. However, before applying for a pre-approved loan, go through the bank conditions.
Some banks might not approve loans for buying properties at a specific location and so on. Down payment along with a pre-approved loan is great for buying a property. Builders will treat you as a profitable customer and are more likely to be open to bargains and discounts.
When you are availing any kind of loan, make sure the monthly EMIs do not exceed 40% of your take-home salary. For high priced properties (over or equal to Rs 1 crore), banks will carry out a valuation process by a couple of agencies. Loan to value ratio is applied on the lower of the two values proposed by the agencies. Therefore, be prepared with an additional amount to overcome such circumstances.
1. Right Property: Once you have the funds ready, start monitoring ideal properties. Consider property factors like connectivity to roads, airports, railways, accessibility to hospitals and schools, geographic location, security factors, price and much more.
Irrespective of whether the building is under construction or fully built, documentation will be done through RERA (real estate regulation act) website. If it is ready to move in property, make sure to ask for the occupancy certificate. If it is under construction, check for the plan, commencement certificate, the developer’s other projects to assess the quality and title of the land.If it is the second sale you must be more cautious. Some additional documents must be verified before the purchase. Original documents and current ownership details are two very important documents not to be missed out.
See Also: Investment Plans For Your Kids
See Also: Types Of Investment Plans
Having a self-owned property adds to your asset list. The returns or value of your asset will ease the complexity d in buying it. Proper planning helps achieve this effectively. Make sure you do not burden yourself with EMIs to acquire an asset.
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