To help readers keep pace with what’s happening in the real estate sector, Mint’s Q&A appears every other Monday.
I am a cost accountant working in a multinational pharmaceutical company in Delhi. I am staying in a rented flat and my lease agreement of two years is ending next month. Instead of renewing it, I want to move into an apartment of my own, but am not sure if I will be able to get a flat within my budget. Is this a good time to buy? I want to take a home loan in case I decide on the property.
Yes, this is a good time to buy property. Property prices have bottomed out, and we do not see property prices going down much from the current levels. In fact, in some places, which include metros such as Mumbai and Delhi, one can see a marginal increase in property prices.
There have been several projects announced by developers in recent times with a special emphasis on affordable housing. The cost of buying a house has come down due to a combination of factors, such as a drop in property prices, lower specifications and reduction in the average size of units.
Further, home loan interest rates have also come down sharply over the past six months. Interest rates are also likely to be stable with a downward bias in the next four-six months.
Since you want to buy property for your own use, this is as good a time as any to buy it.
I am a 32-year-old software engineer working with a leading IT firm in Pune. I intend to buy my first property in Pune and have homed in on an apartment in the range of Rs40-50 lakh. While I have some savings, I would need to take a loan from a bank too. If I book this flat, which is under construction, how will the payments be made?
If you choose an under-construction property, please note that payments to developers are typically time-bound and linked to the stage of construction.
You will have to begin by paying the booking amount to the developer. Since you need a home loan for the purchase of the plot, you could approach a housing finance company or bank and get your home loan approved. Most lending institutions approve up to 80-85% of the cost of the property, depending on the repayment capacity of the borrower.
Once your loan is approved, you need to pay the balance amount to the developer towards your own contribution, after which your lender will disburse the required amount to the developer based on the stage of construction.
Renu Sud Karnad is joint managing director, HDFC.
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