To help readers keep pace with what’s happening in the real estate sector, Mint’s Q&A will appear every other Monday.
I am buying a property worth Rs25 lakh and meet all eligibility criteria for a loan. However, my loan provider says that the final amount will depend on property valuation. What is property valuation and how do I get it done, as the lender is willing to give me only a certain percentage of the market value of the property as a loan (as I am buying a resale property)?
Valuation or assessment of the property is important especially in case of resale as the market value of one flat (property) could differ by 10-15% with the market value of another flat even in the same building.
The price would depend on present condition of the flat, the view, the negotiating skills of the buyer, etc.
Additionally, general factors that influence the price are the locality, facilities available both within the premises and in the vicinity, the existing infrastructure, future development prospects of the area, and so on.
Property valuation is a comprehensive assessment that will give a fair indication of the real worth of the property based on which the loan amount will be worked out.
There are several ways of having a valuation done. However, the best thing would be to speak with your loan provider if they could assist, as they would be comfortable giving the loan as well.
My wife and I are working with an aviation company. It is difficult to visit a bank’s branch during the banking hours. How can we apply for a loan without having to visit the bank personally?
You may take advantage of technology and apply for a loan through the Internet. There are lenders that provide online application forms on their website, where you may fill your details/requirements for them to call you.
Alternatively, you may also explore the SMS service that some loan providers offer. This is an instant service, where a customer service executive calls you to get the loan details in return to your SMS sent to them in their unique ‘short messaging code’.
Once the customer executive has discussed the basic details, the customer executive arranges to send someone at your place of convenience, home or office, to take forward the loan process.
Though these services add to customer convenience and help save time, it is always advisable to directly meet the loan provider before finalizing the loan.
Buying a home is for most of us the single largest investment and involves a long-term financial commitment. Thus, it is important that you meet and discuss the details of the loan, understand the repayment options available and choose the one most suitable for you.
Also, when you meet the lender, you generally get a feel of the lender’s background—whether they seem to have adequate systems in place in terms of maintaining your documents safely and capabilities of providing you the desired service levels throughout the term of the loan as housing loans are of long duration.
Renu Sud Karnad is executive director with HDFC.
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