Flats under construction are in great demand in the real estate sector as it bill not cost you much compared to the fully built flats. An under construction property cost is on an average 20% price lower than a ready to move in and comes with a good number of modern features. In addition, if you are applying for a home loan in India, all interest paid on that loan is tax deductible.
The benefits that accompany construction guarantee that a lot of home buyers are now getting a lot of interest in purchase apartments that are still in the construction stages. Therefore, do you want to get a home mortgage for a flat that is still being constructed?
Important Points Regarding Home Loans for Under Construction Flats.
1. Registration Number of RERA.
By the enforcement of the Kerala Real Estate Regulatory Authority Act or K-RERA, the government seeks to cover all the regulatory measures aimed at protecting the interest of the consumers in all real estate transactions. RERA registration number will be issued to each project after all builders submit the required legal documents to the authorities.
This applies for the projects where the land area under development exceeds 500 sq. m in area and the number of apartments under development exceeds eight in total irrespective of all phases. Hence always opt to purchase an apartment with an active RERA registration number to be safe from frauds and various inconveniences.
2. Confirm Documents
It is very important to check all the legal documents and the permits related to the selected apartment. Compliance documents are vital for every new scheme, so prior to all construction works commencing, a construction commenced certificate must be advanced by the relevant authorities to a builder. Therefore, you have to check the Building Permit or the Commencement Certificate for the project with the builder before entering any contract concerning the property.
This is also true for any other NOCs and legal permits that should be verified prior to buying possessions. This will guarantee that in the future, you are free from legal and financial complications.
3. The Art of Negotiation
Once you identify a good property the next process is to bargain the price with the builder or owner. You should take note of the surrounding real estate market prices and assess the value of the apartment or flat that you have selected. This can be accomplished by checking other projects in the vicinity of the property you want to buy to see if the pricing is ideal.
In case the price quoted is too high, you may also approach the builder, or the principal who decided the rate and mention that rate should be adjusted. This is very much possible in buying houses which are yet to be built because builders offer the customers good rate so they are able to make enough sales.
4. P…re-approved Loans
Buyers must aim to select a builder that has the borrowing from the major banks so as to streamline and reduce risk in the entire home loan process. In India, most of the well-established builders are associated with some of the leading nationalized banks and funding institutions. You may also qualify for a lower interest rate when applying for a home loan that has already been approved before buying the house. The authority to approve a loan is usually granted by the financial institution depending on the previous loan and account information.
5. Home Loan Applicants Should Be Able To Manage Custom Payment Plans
One of the biggest advantages of acquiring a home loan for purchasing a house which is currently being built is that you only have to make the payment of the pre-emi on the loan disbursed, and not the sum of the loan amount. For instance, if the house is costing you Rs. 50 lakhs and you need to take the loan then the bank will start disbursing payments in installments as the construction work progresses. This means that a significant portion of the loan amount will not be disbursed at once by the banks.
In this regard, suppose the bank gives out ten lakhs rupees in the first tranche. It presumes that at that point, the client should pay only ten lakh rupee as pre-emi. As such, it alleviates the financial outlay as a reason to invest towards buying a new home. In the event of any significant delay in the project realization, payments can be canceled so that no one incurs a loss.
6. Builder’s Reputation
Investing in Real estate requires an immense amount of cash and time, therefore the first step before making any purchase is to check whether the given builder possesses the credentials he claims to possess. Making a wise decision when hiring a builder will certainly assist you in finishing the project on schedule while also ensuring that the construction is superb. Since purchasing a house is one of the huge expenditures which you will make, be more cautious as not to be misled by fake contracts or promises made by builders.
Moreover, learn more about the builder’s history of performance by going through the company profile, prior projects completed, and comments of clients to understand their reliability. This will enable you to discover the best the flats in Kerala that are still being constructed according to your purpose of best quality; best finish and best price.
Conclusion
In this article, we hope you have generally learned about mortgages of incomplete properties.
Focussing on these basic factors can be helpful while drawing a picture of the location to build or select flats that you desire.
Author – Dream Location
As the most trusted real estate brand in the nation, we at Dream Location aim at creating a pleasant, hassle-free and transparent medium through which prospective home buyers can seek out anything relating to home purchase. Thus, we write articles that are informative and interesting which touch on a variety of useful topics pertaining to the real estate industry.
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