Of all the dreams that a person dreams in his lifetime, the most desired is the one for owning a house. It is much more than just a real estate purchase or an investment opportunity. Every individual aspires to have a private space that he can call as home. People spend lots of time and money in making this dream of theirs come true. However, it is advisable to give proper thought and planning before making a decision to buy a new home. After all, we buy a home just once.
When you opt for a property, you should also consider the amenities like space, neighbourhood, transport, proximity to schools, hospitals, markets etc. Visit the site and cross verify that the actual amenities are in compliance with what is mentioned in the advert. Make sure the basic infrastructure like water, electricity etc. are in place. Try to find valued add-ons that will further save you on cost, e.g. a furnished plot or automatic admission in the township.
An important point to consider is that if the property to be bought is a part of some registered society. You should check the society norms for selling or renting out the property, parking space etc.
Proper verification of documents like solicitor’s title report, title certificate, Municipal Corporation approvals, No Objection Certificates, terms and conditions, relevant title certificate, IOD, CC list, copy of plan etc., is mandatory. Make sure that the agreement of sale is drafted as per the state’s Municipal Corporation.
Keep you eyes open for any hidden costs and document the entire transaction. The total actual cost should be calculated by including stamp duty, registration charges etc.
Always keep a margin of few months, in case the possession gets delayed. It is a good idea if you already are staying at a rented place. To ensure good quality, service and possession on time; go for a developer that has carved out a niche in the real estate market. Some with a well established reputation in the market. Also, get the property checked by a lawyer and engineer to avoid any legal hassles at a later point of time.
The selection of the perfect home loan provider should be done after a thorough market research. Go for the one that offers best cost, prepayments, interest rates etc. Before zeroing on the loan amount, consider your savings and your income. Don’t spend more than you can afford.
Craft a proper financial plan that would help you save enough and spend wisely. A home loan will be a huge fiscal responsibility and its better to get rid of it as soon as possible. So it would be a better idea to clear off your other debts before opting for a home loan. Assess your expenditures properly, prioritize them and save prudently. The more you save, the bigger is your down payment and repayment will be easier. Any major financial decisions, e.g., buying a car etc., should be kept on hold till the time you completely repay your loan.
Some terms related with housing finance:
EMI: EMI means Equated Monthly Installment. This is the installment payable to the housing finance company and remains constant over the tenure of the loan. The EMI you pay depends upon the rate of interest, the tenure of the loan and the amount of loan you take. For example, when ICICI Home Finance says EMI of Rs 982 per lac for a 20 year Home Loan, it means that if you take a loan of Rs 1 lac for 20 years at the existing rate of 10.25% you will have to pay Rs 982 every month for the next 20 years.
LTV: LTV stands for Loan To Value ratio. It signifies the loan amount that a person is eligible for a Home Loan on the total cost of property. So an LTV of 85% means that you can get a loan of maximum of up to 85% of the value of the property.
FOIR: FOIR is Fixed Income Obligation Ratio. It is used to calculate your eligibility in terms of the EMI, in which the housing finance institution takes into account all the fixed obligations that you pay every month like of all the loans previously availed before you take your Home Loan and arrive upon the maximum EMI that you can pay. The loan amount you get is derived on the basis of the EMI that you can pay. It is usually expressed as a percentage.
With inputs from ICICI Bank Home Loan and Property Buying Tips
Posted under categories: Buying Property
Tags: Buying Property, EMI, FOIR, Home loans, LTV
installment payable to the housing finance company and remains constant over the tenure of the loan
The way in which each small point is mentioned with so much clarity is really good. Each point mentioned is equally important and should be complied with.
your point wise description is very good skill. Keep Updating
It is nice and useful. And before buying any property, we should have knowledge about the developers.
yeah i also agree for the above statements,before making a decision to buy a home,we have to get information about the developers.
i have paid about 80% of flat cost, now Builder send a notice that super built area has been increase (about 20%) and u have to pay Rs 4 lakh. what should i do?
This is good blog. And it is more informative. These are the good steps for the use to Things to Keep in Mind Before Buying a Home. These are the good for the buyer to keep the in mind before buying home…
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Be sure to know about property tax information. and the most important is that Ask for utility bills.Anyway, I like this post which is very useful for Consumers.
Interesting post and thanks for sharing. Some things in here I have not thought about before.Thanks for making such a cool post which is really very well written.will be referring a lot of friends about this.Keep blogging about indian real estate
Nice Information.Can i have sample
The article is very helpful for all the people related to real estate.One can understand the market and gain knowledge….