Seemingly Easy Choices That May Make Homebuyers' Lives Difficult
A prospective homebuyer does all things in his capacity, to materialise his plan as soon as possible. As fascinated as you are with the whole idea of home ownership, it would, however, be imprudent on many levels, to side-line diligence in your home purchase process. Mentioned below, are some choices that seem easy but may make your life difficult in future.
Choosing an unknown brand
Obviously, reputed developers make you pay for their brand name. However, since every penny counts, it is common for people to choose a small-time builder who does not have a big name that one is expected to pay for. Also, negotiations are easier with them, as compared to a reputed developer. It is important to choose a builder who has a good reputation in the industry, irrespective of how big his brand name is and has an impressive track record, especially if you are investing in an under-construction project.
Getting a co-applicant to increase your home loan limit
Banks prefer to have co-applicants in home loan applications, because if one party is not able to meet the commitment, the other party would be obliged to do so. This minimises the chances of loan default. So, they enumerate the many advantages of co-applying for a home loan, like availability of a bigger loan amount at lower rates. However, it is also not ideal for two people in a single household to be under debt at the same time, especially if one may desire to take another loan in future. Also, in case things go wrong between the co-applicants in future, a dispute with regard to ownership and debt might ensue
Under-valuing the property
This is a typical money-saving exercise widely practiced by both, buyers and sellers. By under-valuing the property on paper, buyers save on stamp duty and sellers save on capital gains. Often neglected throughout this exercise, is that if one were to sell this property in future, they would have to find similar buyers, who would agree to under-value the property and have unaccounted money for purchase. With increased scrutiny around realty transactions, it is increasingly hard to find such buyers. Also, by depreciating the value of your property on paper, you undermine its worth. If a problem were to arise in future, forcing you to leave the premises and be compensated for your immovable asset, you would get the worth mentioned on paper and not its actual value.
Doing everything on your own
Many home seekers opt to find the property without a broker, select the banks for processing home loans and are prepared to carry out the transaction, without seeking any help, legal, financial, architectural or such. Hiring a lawyer or a chartered accountant or an architect, would cost money which can amount to at least one per cent of the property value, which home seekers prefer to avoid. However, doing everything on your own, in this highly capital-intensive deal, might not be the best of idea. Seeking help, especially legal and financial, could save you from many big expenses in future.