Documentation for Purchasing Property
Q 1. What are the documents generally required by builder while booking the property?
Soln. Following are the documents generally required by the builder for booking the property:
Q 2. When will the Builder-Buyer agreement be signed?
Soln. It is signed between the builder and the buyer when the requisite amount is paid in by the buyer as set in the terms of the Booking Form.
A home loan is a loan taken for buying or constructing a home or to make improvements to a residential property. You can get a loan from banks and registered housing finance companies.
Your home loan is secured against the property that you buy. This means that in case you are unable to repay the loan, the lending bank will have the right to take possession of your home.
Q1. What are the types of Home loans available?
Ans.: The following different kinds of home loans are available:
Q2. What is an EMI?
Ans.: EMI (Equated Monthly Installment) is the amount payable to the lending institution every month, till the loan is paid back in full. It consists of a portion of the interest as well as the principal.
Q3. What are the eligibility conditions for a home loan?
Ans.: To qualify for a home loan, most of the lending institutions in India require you to be:
Q4. What are the interest rates offered for home loans? What are: Daily Reducing, Monthly Reducing and Yearly Reducing?
Ans.: Interest rates are different from institution to institution and generally range from about 8.75% to around 12 %. The interest on home loans in India is usually calculated either on monthly reducing or yearly reducing balance. In some cases, daily reducing basis is also adopted.
Q5. What is a fixed rate of interest?
Ans.: Some institutions have a fixed rate of interest, which means the rate of interest remains unchanged for the entire duration of the loan. This means you do not benefit, even if rates of interest drop in the market.
Q6. What is a floating rate?
Ans.: This is the rate of interest that fluctuates according to the market lending rate. This means you stand the risk of paying more than you budgeted for in case the lending rate goes up
Q7. What are the other costs that usually accompany a home loan?
Ans.: Home loans are usually accompanied by the following extra costs:
Q8. How do HFCs decide on the loan amount?
Ans.: Usually, most companies give up to a maximum of 85% of the cost of the house. The 15%, sometimes called 'seed money', will have to be provided by the loan applicant. The amount, for which the applicant is eligible, is determined by the age, income, no. of dependents, monthly outgoing and repayment capacity. This varies from case to case.
Q9. Are securities required for home loans?
Ans.: In most cases, the property to be purchased itself becomes the security and is mortgaged to the lending institution till the entire loan is repaid. Some institutions may ask for additional security such as life insurance policies, FD receipts and share or savings certificates.
Q10. What is the time required for loan disbursement?
Ans.: On an average, loans are disbursed within 3-15 days after satisfactory and complete documentation and completion of all relevant procedures, including proof that 15% of the cost has been paid upfront to the seller of the property.
Q11. What are the tax benefits of home loans?
Ans.: Both principal as well as interest of home loans attract tax benefits. With effect from 1st April 2005 (i.e. assessment year 2005-07) under section 80C of the Income Tax Act 1965:
Principal amount of repayment of loan along with other savings such as PF, PPF, Life Insurance premium etc up to a maximum of Rs 1, 00,000/- will be eligible for deduction from gross income.
Interest paid up to a maximum of Rs 1, 50,000/- will be eligible for deduction from gross income on loan after completion of construction will be deductible from income from property.
Home Loan Documents
Generally, the documents required to process a loan application are almost similar across all banks, however they may differ depending upon specific requirements and other factors.
The following documents are required by financial institutions to process a loan application:
If a flat is purchased from the builder
Property Buying Steps
Our endeavor is to simplify the most important decision of your life - buying a home. We combine the power of the internet to provide comprehensive information along with the services of a property advisor who offers genuine and unbiased advice and helps conclude the transaction successfully.
I Step: After being introduced to property by Flatle verified Sub-seller, Check out our website
Visit flatle.com to see and compare the best-suited property from a vast database of properties from best builders. We provide comprehensive information on location, builder, unique selling points of the project, layout plan, floor plans, pricing, specifications and amenities on all properties.
II Step: Select the property that meets your criteria
Property selection is based on the following:
III Step: Closing the deal
Once you have decided on the property of your choice, we help you:
Vaastu is a set of principles that helps home owners lead a happy and peaceful life in their abode. The doctrine of Vaastu is related to architecture and the designs are based on directional arrangements. Vaastu guidelines can be applied during the construction of homes, offices, temples and other buildings and help bring about positive energy and general well-being for the home owner. As such, it is important to keep in mind few tips while searching for or building your ideal house.
Property purchase guide for NRI
Q1. Who is an NRI?
Ans.: Under the Foreign Exchange Regulation Act of 1973, Non-Resident Indians are:
Indian citizens who stay abroad for employment or carrying on business or vocation outside India or for any other purpose in circumstances indicating an indefinite period of stay abroad;
Government servants who are posted abroad on duty with the Indian missions and similar other agencies set up abroad by the Government of India where the officials draw their salaries out of Government resources;
Government servants deputed abroad on assignments with foreign Governments or regional/international agencies like the World Bank, International Monetary Fund (IMF), World Health Organisation (WHO), Economic and Social Commission for Asia and the Pacific (ESCAP)
Officials of the State Government and Public Sector Undertakings deputed abroad on temporary assignments or posted to their branches or offices abroad.
Q2. Who is a foreign citizen of Indian origin?
Ans.: A foreign citizen is deemed to be of Indian origin if:
Buying a Property
Q3. What should a consumer keep in mind while purchasing a housing flat?
Ans.: Some of the factors to consider while purchasing a flat are:
Q4. What is the checklist for buying a residential property?
Ans.: Keep in mind the following things while buying a residential property:
Q5. Do NRIs require consent of the Reserve Bank to buy immovable property in India?
Ans.: No, NRI's do not require permission to buy any immovable property in India other than agricultural/plantation property or a farmhouse.
Q6. In what way should the purchase consideration for the immovable property be paid under the general permission?
Ans.: The purchase consideration should be met either out of inward remittances in foreign exchange through normal banking channels or out of funds from any non-resident accounts maintained with banks in India.
Q7. Is there any limit on the number of housing properties that may be purchased by an NRI?
Ans.: There are no limits on the number of residential properties that may be bought by an NRI. However, repatriation (the process of converting a foreign currency into the currency of one’s own country) is allowed only in respect of two such properties.
Selling a Property
Q9. Can a home/land be sold without the permission of Reserve Bank?
Ans.: Yes, the Reserve Bank has granted general permission for sale of property. However, where another foreign citizen of Indian origin purchases the property, funds towards the purchase consideration should either be remitted to India or paid out of balances in non-resident accounts maintained with banks in India.
Q10. Can sale proceeds of such property if and when sold be remitted out of India?
Ans.: In the event of sale of immovable property other than agricultural land/farm house/plantation property in India by a NRI or PIO, the authorized dealer may allow repatriation of the sale proceeds outside India, provided all the following conditions are satisfied:
The immovable property was acquired by the seller in accordance with the provisions of the Exchange Control Rules/Regulations/Law in force at the time of acquisition, or the provisions of the Regulations framed under the Foreign Exchange Management Act, 1999;
NRIs/PIOs can effect remittance of sale proceeds of immovable property in India irrespective of the period for which the property was held. The sale proceeds allowed to be repatriated should, however, not exceed the foreign exchange brought in to acquire the said property.
In case of residential property, the repatriation of sale proceeds is restricted to not more than two such properties, if the property was purchased from funds held in NRE Account.
The amount sought to be repatriated abroad should not exceed the amount paid for acquisition of the immovable property in the foreign exchange received through normal banking channels or out of funds held in FCNR or NRE Account. In case of investment out of NRE Account the amount to be calculated as foreign currency is equivalent value as on the date of payment for acquisition of the said property.
Q11. Does RBI have any guidelines for loans to NRIs/PIOs?
Ans.: There are guidelines issued by the Reserve Bank of India for grant of housing loans to NRIs. The guidelines are:
Q12. Can authorized dealers grant loans to NRIs for purchase of a flat/house for residential intention?
Ans.: Authorized dealers have been granted permission to grant loans to NRIs for acquisition of house/flat for self-occupation on their return to India subject to certain conditions. Repayment of the loan should be made within a period not exceeding 15 years out of inward remittance through banking channels or out of funds held in the investors' NRE/FCNR/NRO accounts.
Q13. Can authorized dealers grant housing loan to NRIs where he is a principal borrower with his resident close relative as a co-applicant / guarantor or where the land is owned jointly by such NRI borrower with his resident close relative?
Ans.: Yes. Such housing loans availed in rupees can also be repaid by the close relatives in India of the borrower.
Q14. What are the documents required along with the application?
Ans.: The following documents are normally required to be submitted along with the application:
Q15. Can an NRI take loan against the security of immovable property in India? Are there any restrictions on the use of loan amount?
Ans.: An NRI can borrow against the security of immovable property from an authorized dealer subject to following conditions:
Q16. What kinds of incentive can NRIs, PIOs and foreigners look forward to in the Indian real estate industry that favours investment?
Ans.: The relaxation of FDI in the construction development sector announced in March 2006 allows NRIs, PIOs and all foreigners equal opportunity with their Indian counterparts in the Indian real estate sector. The new guidelines state that before selling, the site has to be developed, constructed upon or fulfill the criteria of a minimum of one year of development.
Q17. Is there any deadline to actually complete your construction development work?
Ans.: The norms are quite liberal. It allows you five years to finish at least 50% of your project from the date of getting all the clearances. Under normal circumstances the project can be completed within three years. It helps protect the customer and keeps fly-by-night people at bay.
Q18. How does the automatic route work?
Ans.: The automatic route has simplified much of the cumbersome investment process. Approval from the Reserve Bank is not required anymore and there is also no need to go to the Foreign Investment Promotion Board. The easing of paper work and relaxation of formalities has given a boost to overseas investor confidence for investing in India.
Q19. What aspects should overseas investors look at in the Indian real estate market to facilitate the suitability of their projects?
Ans.: Any NRI before investing in the Indian real estate should also focus on the particular segment that he plans to invest in like residential, retail or office space. Consulting legal firms and real estate firms providing professional NRI services can be very useful.
Q20. What steps should an NRI follow for getting all the clearances in a hassle-free manner? Whom should one consult in the process?
Ans.: A lot depends on the segment you want to invest in. It helps to gauge the future state and to know what utilities are available. An office market investment, for instance, requires you to:
Q21. Is a single window clearance possible?
Ans.: Single window in a real estate project in India may be difficult because of the involvement of several authorities. If it is a multistoried building, you need to get clearance from town planning authorities, clearance on design, elevators, firefighting agencies, etc. Efforts are on to make the process simpler and transparent, though.
Q22. How is the sanctioning authority and monitoring authority different in India?
Ans.: In some states, the Municipal authority is the ultimate monitoring authority. In smaller states and in non-urban areas, the town and country planning corporation acts as the monitoring authority. In urban areas where most of the construction takes place, the municipal authority wields power in giving the final permission and sanctioning drawings and plans. Clearances on electricity, water supply and other utilities also come from here.