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Managing Finance

What is the best way for a first-time buyer to set a budget to purchase a home?
Your EMI should not be more than 30-40 percent of your take-home salary. If the property markets in your city are very expensive and you cannot afford the property that you want to stay in, invest in whatever is affordable even in the periphery. Most banks allow you to exit one loan and take another.

Choosing the location

While investing in a big city, keep a few things in mind. If you are purchasing for self-use, make sure you buy a new home in a neighborhood that has all the conveniences that you require and also has good accessibility to the other parts of the city. Even in premium localities, if you keep searching, you will find properties that suit your budget. If you cannot afford the premium rates,

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Home Loan

Factors to keep in mind before getting a home loan:
1. Your income and your track record of repaying previous loans – this is obtained from the Credit Bureau.
2. Your current expenses including other loans you are servicing. The amount of loan related to the property value.
3. Ownership of the property – this means,

A beginner’s guide to buying an apartment

The demand for property is rising day-by-day. Buying an apartment from a reputed dealer or developer offers you and its residents the convenience of availing various lifestyle facilities like a clubhouse, swimming pool, gymnasium, etc. Since buying a property is a decision of a lifetime, you need to be equipped with the right know-how. It’s important to learn about the origin of the property, continuous flow of the title and present status of the property before buying making it yours. Buying a property for self-employment or investment is perhaps one of the biggest investments one can make and this landmark purchasing decision needs to be extremely well thought-out.

All that you need to consider while buying an apartment

Immense care is needed even from the beginning, right from site visits till the registration of the flat. Check the distance from schools, workplaces, colleges, transport facilities, markets, hospitals, etc. Do a detailed check on all the amenities provided in the building and if any additional costs are involved in the use of these amenities. If the building is under construction, confirm a tentative time for completion and enforce suitable penalty in case of any delay. Visit the developer’s earlier projects to check the quality of the construction, landscaping, and other amenities.
Before buying property, it is advisable to appoint a solicitor to inspect the original title documents of the property being purchased. It is advisable not to secure any property in a hurry and without subjecting all documents of the property to rigorous legal scrutiny. Find out any minor claims, court litigations, government acquisition proceeding, zonal regulations and other subsisting charges on the property. You should approach a financial institution in order to check if they would provide a loan for that particular property. Planning will help you to be out of the panic mode and keeps you on your toes for unplanned emergencies.

Define your requirement: The requirement of home buyers differs from one buyer to another, depending on their lifestyle, family size, preference, usage etc. Defining your preference or requirement helps you save time on unyielding and time-consuming deals for inappropriate properties. It will also help your real estate agent to come up with the right property quickly.

Legal aspects of property: Once you had found the property of your choice, make sure that the developer has acquired approvals and No-Objection-Certificate (NOC) from the Municipal Corporation, Area Development Authorities, Electricity Boards, Water Supply & Sewage Boards and other concerned authorities. Ensure that the developer has entered into proper development agreements and the property has clear titles. Every bank conducts a legal check on your documents to validate their authenticity before sanctioning Home Loan. As a buyer, it gives you confidence that your property has been inspected by experts and your property is legally clear and technically sound.

Property under construction : For a project under construction, you should ask for the allotment letter and development agreement. The development agreement is linked between the builder and the landowner and contains details regarding the terms and conditions on which the landowner has permitted the development of his property.

Duties and Taxes: Understanding Government policy and other legalities such as Stamp duty, Service tax etc. will be extremely handy in making an informed choice of property. The final sale deed should be stamped and registered at the appropriate local area office. A Capital Gain is applicable when:

1. The sold property has been withheld by a person for a period of more than three years from the date of purchase/possession.

2. The sale proceeds are invested in a residential property which was bought one year before the sale of property or two years after the sale of the first property.

3. The new property is bought after the sale of the first property.

Capital Gains Tax can also be saved by investing the sale proceeds in Capital Gain Bonds. Taxes will be saved only if the new property is registered in the name of the person who receives the capital gain, i.e., the owner of the previous property.

What to buy?

There are many residential formats to choose from - residential plots, single floors, multi-storey flats, 1, 2, 3 and 4BHK apartments, to studios, villas, and row houses, to builder floors and independent houses. If you are an end-user and have the required finances, ‘ready-to-move-in’ is the ideal option. As an end-user, the size of your family, along with the budget can be a determining factor while choosing the type of home you need. Multi-storey projects and townships with all amenities in one project – clubhouse, swimming pool, meditation center, health clubs, departmental stores, schools, cinemas, sports facilities, banquet/party halls are what most end-users are looking for today. This property would be significantly more expensive than at the launch stage. However, the buyer is protected against time and cost over-runs and also the EMI payment during the period when the house is under construction. For an investor who wants regular rental returns from his property investment, a ready-to-move-in property brings immediate rental income which helps the buyer pay back the loan to buy the property. If the project is new, choosing the right builder is a big decision to make. It is always important to do a detailed study on the builder's track record, his financial strength, his ability to deliver on time, construction quality and the payment terms, especially in case of a local builder. Do a background check on the developers and make a good assessment about where you feel is the safest to invest. One should always gather information from local real estate brokers about the last transaction price or the price of similar properties in and around that location.

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