Before You Apply for Loan and Buy Property, do This

Once the idea takes root that you must buy a house, you will want to rush out to view properties advertised by builders and then apply for loan from a bank to finance your house. Hold on. In each case you must think and consider all aspects before closing a deal with either a builder or a bank. Both can draw you in and then extract the maximum from you.

Before finalizing with the builder please check:

The property in question has all titles clear and that builder is prepared to give you all supporting documents like plans, NOC, Building Permission, etc. to assist with a bank loan.

Check that the price is right in relation to the size. Check superbuilt up area claimed and actual carpet area for which the builder should provide a floor plan.

Is the builder dazzling you with granite tiles, high value fittings, furniture and other “attractions” and them ramping up the price?

Examine the agreement carefully. If builders reserve their right to levy charges, escalation or modify plans and construction, you can be sure they will. There are other hidden clauses as well. If you do not notice and clarify these, you then have no option to pay up or forfeit your deposit. Clarify if property will be delivered on the scheduled date. It is best not to rely on builders and instead, choose a ready property.

Before you apply for a loan

Get the loan application form, study it carefully and compile all documents including the proposed deal with your builder. If you have existing small loans or liabilities, clear them.

Check the interest rate and clarify how they base it. What are the processing fees and other charges? Clarify and compare it among other banks to settle on the bank that gives you the best flexible offer of loan and repayment terms.

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