THE ROOF OVER YOUR HEAD
Meera Kapoor, 32 and married for 3 years, wants a sense of stability in her life after having worked for almost 8 years in three metros, where much of life is consumed commuting and building a career which brings money and a sense of achievement, but not necessarily happiness. She is fed up of living in rented apartments, of shifting from one to the other every 11 months, of dealing with property brokers, of restrictions imposed by landlords. Now she wants this to stop. Now she wants to own a piece of earth or concrete, which she can call her home, whose interiors she can design, whose walls reflect her personality and floors give the family a comfort and whose doors can bar frustrations and unhappiness of big cities.
What’s with the Delay
She talks to friends and colleagues and those who already own a home and those who, like her, are planning to have one. They discuss, get some information, discuss again, forget, boss calls out, some important mail lands in, another day, another discussion, another assignment. Life goes on. It’s been more than a year and Meera is still clueless. Discussing something you really value and want to possess always gives a kick. But that charm should not delay your goal and reduce the pace of the process.
Ideally...
Consulting friends and colleague for home purchase is always a good idea, but don’t forget no one among your colleagues is an expert on this. They just bought a home and only have their experiences to share. They may not have answers to all your queries. So quickly be through with this consultation and hit the market on your own.
The Hunt
Your search could begin on internet with various property sites, which lists properties and brokers and give you a sense of what is available for what price in which locality. Call up brokers from the telephone numbers available on these sites and figure out the way market looks like. Go meet some builders and brokers over the weekend and look at the properties or project sites where homes will be built.
Your Needs
This is the key criteria to fast pace your home purchase. Meera too lingered on with the notion that she must buy a 3 bedroom apartment, even though she lived all these years in 2 bedroom apartments. Her logic: your own home has to be spacious and you don’t keep buying homes every day.
Both arguments aren’t very reasonable: You rented two BHK and you lived fairly well mainly because you couldn’t afford a three BHK. You would have an equally good life in your own 2bhk. Second, Meera has moved not just homes, but also cities—four in last eight years – in pursuit of her career. She doesn’t live in her parents’ home, nor will her kid, when he grows up, will live in her. Therefore, instead of worrying about more space, she should just get a 2bhk that she can afford today and sell it to buy a 3bhk when her finances support this.
Zero In
Once you have identified a location, half you home search is done. Try and block a location that suits you most depending on the neighbourhood, distance from workplace, market, school, transport facility.
Set Your Budget
Most of us feel offended when a broker asks us in the very first sentence about our budget. There is no denying property brokers are not the most polished lot, but their query is really genuine. All potential home buyers should ask themselves this question before broker asks and have a range in mind as to how much their income would allow them to spend on buying a home.
The Home Loan
Most of us tend to believe that banks are waiting for us to give home loan, which in certainly not the case. Before booking a property or giving advances, one must get in touch with more than one bank and know for himself if he is even eligible for a home loan. Banks have their own criteria, some visible, some not so visible, to give or deny loans.
If you are in certain profession disliked by a bank, it’s likely that you may not get a loan, although bank will continue to process you application for years. Mostly these days, banks give loans to salaried people employed with government or good corporates.
Loans are on average 70-75 percent of the value of the property. So for a Rs 1 crore-flat, banks ordinarily will not finance more than Rs 70-75 lakh, with the buyer having to shell out the rest. A buyer usually gets a loan, whose EMI (monthly payment towards loan) should be less than half of his monthly salary.
The interest rates banks charge keep fluctuating depending on the way RBI moves interest rates. Most banks these days offer very high fixed rate loans, while the floating rate (which keep rising and falling depending on RBI action) comes at about 3-4 percent discount to fixed rate.
Banks also ensure that law of gravity has limited impact on floating rate. Therefore rates go up as RBI raises rates, but don’t go down with equal ease for borrowers when the reverse happens.
While finalising a home in any project you must check with banks if the project is cleared by them. Don’t rush into offering advances as you may get stuck if banks don’t sanction loan. And you must remember it’s almost impossible to get a refund from any builder or broker.
Risks
It’s true many a time that builders launch projects without obtaining proper permission from the government. DON’T be lured by a rate concession and rush into making pre-sale bookings, where typically builders have no permission to build homes. There have been many instances where builders didn’t even own land on which they launched projects. So ask for a copy of the permission the builder has received from the local authorities.
DON’T think since a lot of your acquaintances have booked flats in a project, that project must be safe. Builders have a great ability to fool people in hordes. Biggest names in the property sector have a history of delayed projects and not keeping promises. Therefore, just read your agreement with the builder carefully and ensure the agreement penalises builder for delaying delivery.
