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How to Buy Property Easily?

IndianMoney.com Research Team | Posted On Wednesday, January 22,2020, 03:10 PM

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How to Buy Property Easily?

 

 

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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How to Buy Property Easily?

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.

See Also: Best Investment Plans for Millennials in 2020

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

  • Once the funds are ready and the property is finalized, you will be faced with a series of documentation procedures. Here is a quick list of the requisite documents:
  • Sale deed: This document establishes the property ownership title. It is one of the most important documents for the property purchase. It must be registered at the sub registrar’s office of the property location.
  • Extracts: Important document for the registration of a new property. It is a must during a transfer of ownership of a property. It is proof that the property is included in the municipal records and constructed as per rules and regulations. Banks ask for this document before approving a home loan.
  • Mutation register extract: Details of the previous owners are mentioned in this document if the property falls in the jurisdiction of a gram panchayat.
  • The general power of attorney: This is a document mentioning whether the sale or purchase is being carried out by an authorized person on behalf of the owner of the property. It is a must by banks to sanction a home loan.
  • Building plan: A copy of the building plan must be acquired. It is proof that the building is built as per rules and regulations and is approved by the statutory body.
  • No objection certificate (NOC): The builder requires several NOCs from various departments. The number varies across states. Make sure you keep a copy of all this with you.
  • Allotment letter: A document given by the developer to the first owner. It gives the description of the property and the amount paid by the buyer to the developer. This document is mandatory for getting a home loan.
  • Sale agreement: This is important for a property purchase. It contains all information on the property like terms & conditions, payment plan, specifications and many more.
  • Possession letter: It contains the date on which the developer promises to transfer the possession to the buyer.
  • Payment receipts: Collect the payment receipt from the developer. If it is a second sale, ask for copies of receipts from the seller.
  • Property tax receipts: If you are buying a resale property, make sure the previous owners have paid off all the tax dues. Keep a copy of the tax receipts to legally prove this in any situation.
  • Encumbrance certificate: This ensures the property has no pending legal dues or mortgages.
  • Completion certificate: It proves the building is constructed according to a pre-approved plan.
  • Occupancy certificate: Given by the authority to the developer, stating the project construction is complete and is ready to be occupied.

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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