Many people are now opting to buy under-construction flats in Kerala, as they can be purchased at a lesser price as compared to ready-move-in flats. Usually under-construction properties are priced at least 20% less than completed projects and are incorporated with many latest features and amenities. Another benefit is that if you are taking a home loan in India, you can enjoy tax payment benefits up to a certain amount.
Owing to all these benefits, a large number of home buyers are now becoming more tempted to buy apartments which are undergoing construction. So are you looking for a home loan to buy an under-construction flat?
Here are some important facts that will assist you to make an informed decision:
With the implementation of Kerala Real Estate Regulatory Authority Act or K-RERA, the government aims to ensure transparency in all real estate transactions. All builders will have to submit the necessary legal documents to the authorities and get a RERA registration number for each project.
This is applicable for projects where the land to be developed is 500 sq.m or more, and the number of apartments is 8 or more inclusive of all phases. So always choose to buy an apartment with a valid RERA registration number to avoid frauds and other hassles.
Read more about the RERA Act
It is highly crucial to verify all the legal documents and permits related to the chosen apartment. For every new project, a builder must possess a commencement certificate (CC) from the authorities to initiate the construction process. So, before signing any document regarding the property, verify the Building Permit or Commencement Certificate for the project which can be obtained from the builder.
Other documents like NOCs, legal permits should also be verified in advance before buying a property. This will ensure that you are free from legal and financial hassles in future.
The first and foremost step after you have zeroed in on a good property is to do a price negotiation with the builder. You must be well aware of the existing real estate market prices and analyse the worth of the chosen apartment or flat. You can do a comparison with other nearby projects to understand whether the property is aptly priced.
If you think that the quoted price is on the higher side, you can negotiate with the builder to get a discounted rate. This is especially feasible for under-construction projects as usually, builders will give good price deals to attract customers.
As a buyer, it is ideal to choose a builder who offers pre approved loans from major banks to make the home loan process easier and risk-free. Most of the reputed builders in India will be registered with major nationalized banks and financial lending authorities. You can also avail discounts on interest rates if you are taking a pre-approved home loan. The eligibility for a pre-approved loan is determined by the banks on the basis of your financial records and account status.
One of the major benefits of buying an under-construction property with a home loan is that you need to pay only the pre-EMI on the disbursed loan amount and not the entire loan amount. For example, if you are taking a loan for Rs. 50 lakhs, the bank will release payments as installments based on the progress of construction i.e. the banks will not release the entire loan amount at one go.
So, if the bank releases Rs. 10 lakhs as the first installment, then you need to pay pre-EMI of Rs.10 lakh only at that time. This makes it easy for buyers to invest in a new home as the monthly financial burden is less. In case of any significant project delay, the payments can be put on hold to avoid losses.
Always verify the builder’s credentials before making the purchase plunge. Choosing a reliable and experienced builder will ensure timely delivery of the project and good construction quality. Since buying a home is one of the biggest investments that you will make, you should be extra careful not to get duped by false agreements and promises by builders.
Study more about the builder’s track record by visiting their website, status of previous projects and customer feedback to get more clarity about their trustworthiness. This will help you to find under-construction flats in Kerala which are best in terms of quality, finish and pricing.
We hope this article about home loans for under-construction flats was helpful and informative.
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