Property Buyers Guide

As you buy a new home, the questions mentioned in the FAQs will answer all your common queries about buying and owing a property.


What is meant by valuation of property?

The valuation process evaluates the market value of the property. Demand and supply forces operating in the market, as well as other factors like type of property, quality of construction, its location, the local infrastructure available, maintenance, are all taken into consideration before the market value is decided.

How does property valuation help?

Typically, if a real estate agent is asked to judge the value of a piece of property, he would do so based on information of recent sales or purchases of similar properties in that area. Though this may give a fair idea of the property's market value, an official property valuation would carry more weight. For example, if you need to use a piece of property as a security against a loan, the bank's loan approval process would be faster and smoother if the property is certified by an official valuation. Many banks now insist on valuation certificates before issuing loans using properties as security. The value thus certified may also have chances of getting a higher amount of loan sanctioned. Another benefit of official valuation is that it is a useful negotiating tool when selling the property. Such certification also becomes essential in situations where the correct value of the property has a legal bearing—such as, a will statement, insurance papers, business balance sheets etc.

What is the meaning of a property's market value? How is its stamp duty decided?

The price that a property can command in the open market is known as its market value. Stamp duty is based on the market value or the agreement value of the property, whichever is greater.

What is the difference between carpet area, built-up and super built-up area?

The area of an apartment or building, not inclusive of the area of the walls is known as carpet area. This is the area that is actually used and in which a carpet can be laid. When the area of the walls including the balcony is calculated along with the carpet area, it is known as built-up area. The built-up area along with the area under common spaces like lobby, lifts, stairs, garden and swimming pool is called super built-up area.

Who is eligible for a Home Loan?

Any individual above the age of 21 years and below the age of 65 years, who is of Indian origin, Indian Resident and Non-Resident Indian can apply for a home loan. Apart from this, eligibility is calculated based on the factors such as age, income, qualifications, number of dependants, spouse's income, assets, liabilities, stability and continuity of occupation and previous credit history.

What happens if there is a change in status from Non-Resident Indian to Resident Indian?

In such a case, the bank will reassess the repayment capacity of the applicant based on resident status and will prepare a revised repayment schedule with a new rate of interest as per currently applicable rates on Resident Indian loans (for that specific loan product). The revised rate of interest will be applicable only on the outstanding balance.

What is the maximum amount of housing loan that can be availed?

The usual margin is 85% of the total cost of the property inclusive of the cost of land. This maximum amount is subject to a sealing of Rs 1 cr.

What is pre-EMI interest?

Pre-EMI interest is the interest paid on the portion of the loan disbursed, before final disbursement. This pre-EMI interest is payable every month from the date of each disbursement up to the date of commencement of the EMI.