HOME LOAN CHECKLISTS FOR UNDER CONSTRUCTION FLATS - Magnolia Realty
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HOME LOAN CHECKLISTS FOR UNDER CONSTRUCTION FLATS

5 Jan 2021

KEY OBJECTIVES:

This blog post is useful for all home-buyers who want to avail housing finance while booking their homes in an under-construction project. This blog highlights:

  • The benefit of RERA or HIRA approved homes
  • Importance of commencement certificate
  • Pre-approved projects and their benefits
  • Flexible payment plans
  • Impact due to the credibility of the builder

Many individuals are now choosing to buy under-construction apartments, as they can be purchased at a lower price compared to ready-move-in flats. Under-construction properties are typically valued at least 20% less than projects completed and are integrated with many modern features and amenities. Another advantage is that you will reap tax payment incentives up to a certain amount if you are taking out a home loan in India.

A substantial number of home buyers are now being more tempted to buy apartments that are under construction due to all these advantages. So, are you looking for a home loan to purchase a flat under construction?

HERE ARE SOME SIGNIFICANT DETAILS THAT WILL HELP YOU MAKE AN EDUCATED CHOICE:

  1. REGISTRATION NUMBER RERA (WB-HIRA IN WEST BENGAL)

The government aims to ensure transparency in all real estate transactions by enforcing the West Bengal Real Estate Regulatory Authority Act, or WB-HIRA. All builders will have to apply to the authorities the required legal documents and obtain for each project a WB-HIRA registration number.

This refers to projects in which the land to be developed is 500 sq. m or more and the number of apartments is 8 or more, all stages being included. To prevent fraud and other issues, you always want to buy an apartment with a valid WB-HIRA registration number.

Kolkata realty brand, Magnolia has 100% compliance on this aspect. All their projects are HIRA approved. Check their latest HIRA approved the project with Singapore Lifestyle in Rajarhat 

VERIFY THE LEGAL DOCUMENTS

Verifying all the legal documents and permits relevant to the chosen apartment is extremely important. A contractor or developer must have a commencement certificate (CC) from the authorities for every new project to begin the construction process. So, before signing any property document, review the project’s Building Permit or Commencement Certificate that can be obtained from the contractor.

Other papers, such as NOCs, legal permits, should also be checked before purchasing a property in advance. This will guarantee that you are free of legal and financial difficulties.

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  • NEGOTIATING RATES

Once you have zeroed in on a good house, the first and foremost move is to do a price negotiation with the builder. You must be well aware of the current market prices for real estate and analyze the value of the apartment or flat chosen. To understand if the property is suitably priced, you can make a comparison with other nearby ventures.

You can negotiate with the contractor to get a reduced rate if you feel that the quoted price is on the higher side. For under-construction projects, this is particularly feasible as builders would typically offer good price offers to attract buyers.

Best negotiation is there where everyone wins and this boils down to the fact that affordable and good quality homes are the best value for money. Check highly affordable project with Singapore Lifestyle in Rajarhat

  • PRE-APPROVED PROJECTS

As a buyer, to make the home loan process simpler and risk-free, it is ideal to select a builder who provides pre-approved loans from major banks. Most of India’s reputed builders will be registered with major nationalized banks and authorities for financial lending.

If you receive a pre-approved home loan, you will also benefit from interest rate discounts. The banks shall determine the eligibility for a pre-approved loan based on your financial reports and account status.

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  • FLEXIBLE PAYMENT SOLUTION

One of the major advantages of buying a home loan under-construction property is that you need to pay just the pre-EMI on the balance of the disbursed loan and not the whole amount of the loan. If you take a loan for Rs. 50 lakhs, for example, the bank will release payments as instalments based on construction progress, i.e. the banks will not release the entire amount of the loan at one go.

So, if the bank releases Rs. 10 lakhs as the first payment, you just need to pay Rs.10 lakh pre-EMI at that moment. This makes investing in a new home simple for homeowners as the monthly financial pressure is less. The payments may be put on hold to prevent losses in case of any major project delay.

  • CHECK THE REPUTATION OF THE BUILDER

Before making the buying plunge, always check the builder’s credentials. Choosing a reputable and competent contractor would guarantee the project’s timely delivery and good quality of construction. Since one of the biggest investments you can make is buying a home, you should be extra careful not to get duped by fake agreements and builders’ promises.

To gain more clarity about their trustworthiness, study more about the builder’s track record by visiting their website, status of previous projects, and customer reviews. This will assist you in finding West Bengal under-construction flats that are best in terms of quality, finish, and price.

SUMMARY

Under-construction properties are typically valued at least 20% less than projects completed. The government aims to ensure transparency in all real estate transactions by enforcing the West Bengal Real Estate Regulatory Authority Act. The first and foremost move is to do a price negotiation with the builder.

To understand if the property is suitably priced, you can make a comparison with other nearby ventures. You can negotiate with the contractor to get a reduced rate if you feel that the quoted price is on the higher side. Most of India’s reputed builders will be registered with major nationalized banks for financial lending. Before making the buying plunge, always check the builder’s credentials.

Choosing a reputable and competent contractor would guarantee the project’s timely delivery and good quality of construction. The payments may be put on hold to prevent losses in case of any major project delay. This makes investing in a new home simple for homeowners as the monthly financial pressure is less.

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