For many investors, buying an under-construction property is a very good investment. For this kind of property, home loans are offered by your bankers to your builder directly. If you’re a Mumbaikar looking to invest in township projects in Mumbai or projects in Navi Mumbai, here are some tips to consider before taking a home loan for under-construction projects.
- Streamline payment schedule as per your convenience: You should not be ready to pay money to the builder until there is actual work seen on the project. As an owner of the property, you have every right to show the financier or the bank and inform them about the status of the construction. If the construction is not progressing as initially discussed, then you can give strict instructions to the bank to not release the next instalment to the developer until the housing project is completed as per the deal.
- Negotiate with the developer: You need to negotiate a deal with the builder even if the price quoted by the builder seems fair to you. If you try to be on good terms with the developer, the price may also come down for a few lakhs or even thousands. If the apartment offered to you is on the upper floor of a high-rise building, the more reason to negotiate with the builder.
- Check if the commencement certificate has already been received: Always check if the commencement certificate has been received on a particular tower, phase, or floor. You also need to check if the builder has all the required approvals and documents needed to start the project. To initiate the process, every builder must get a commencement certificate. Banks will not disburse loans without this certificate.
- Contact the financier or bank to know if the loan has been approved: Even though the builder has offered you all the required documents and is ready to share further information pertaining to the project, it is the duty of the homebuyer to get in touch with the financier or the bank to check the reputation of the builder and if the loan has been approved. It’s good to do a detailed research on the builder, the land, and the project with the help of a lawyer.
- Give more time to get the actual benefit of property appreciation: Appreciation of property value by the time the construction of the project is complete might take longer than expected. Hence, it is important to wait to get the actual advantage of land value appreciation. The period of eight to ten years is a perfect time frame to get a good appreciation.
- Don’t opt for a pre-EMI option: You should not opt for a pre-EMI option as the project may get delayed and your cost of acquisition will grow every month towards the possession. Hence, you must opt for an EMI option only if you can afford it.
The banks get a little anxious while giving a home loan for an under-construction property and only gets ready to offer a loan if the buyer has proper documents in place. These tips will definitely help you in taking a better decision before taking loans for an under-construction property.