Buying a Resale Property? 3 Things that You should Know
Oct 09, 2018 Home Trading Steps
Most of us when we make up our minds to buy our own house, we want everything to happen as quickly as possible. In such a scenario, buying a resale property is always the best to have the possession as soon as you make the payment. Resale properties are listed under the secondary housing market, which is still in demand.
Three things that you should know before buying a resale property.
- Know all the links in the chain: when you compare documents requirements, the list is much longer in case of resales properties than properties under construction. The home buyer has to present all the paper works in the entire train right from the ownership to other regular documents to the lender for loan approval. It is advisable to take an external expert’s help to understand documentation requirement and also to arrange papers before you present it to the lender. Remember that the more the ownership changes, longer is the list of documents requirements. For example, if your seller has bought the house from another owner of that house or if the seller is still repaying the home loan. Documentation has to be accurate to avoid delay in the process as any slippage can make you wait to buy the house.
- Take steps cautiously: lenders are more cautious about lending money for a resale property, which may sound unfair. Several terms and conditions are there in such transactions by the lenders; in fact, several banks do not encourage lending money for the secondary housing market. Those lenders who do have numerous parameters in place. For instance, the lender may ask you to pay 20 per cent of the amount as down payment. For properties under construction, down payments are usually negotiable to even 10 per cent. When you compare the tenure of loan amount repayment, for secondary housing market the lenders do not exceed more than 20 years. Whereas for properties under construction, it can go up to 30 years of tenure. Property’s age also matters for loan sanction. Banks do not encourage loan approval for a property which is more than 20 years old.
- There may be varying estimates: even if you do everything right about documentation after you submit the application, the lender will send a team who are expert in doing property appraisal. Whatever the team projects after evaluation will be the amount that the lender will approve as a loan. It may vary from your estimation. So, be prepared to add some extra amount as well as down payment in case the estimation has the lower value.
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