The current real estate landscape has become one of the single largest asset investment opportunities. Nowadays, with the rise in increasing awareness and open forums, it has become easy to know the ins & outs of property investment from a legal perspective. How many times have you heard that a building’s construction had to be stalled because there weren’t proper approvals or the documents were not in place? If you are waiting for the construction of your dream home to begin, it can be a rather unpleasant situation and can be the source of financial issue for you.
Hence it is absolutely necessary to have the checklist ready before stepping in to buy a property. You can’t be sure that the builder possesses the pre-requisite approvals and has legal rights for the construction. But there is a solution to this. You can opt for a pre-approved property.
A pre-approved property is the one for which the titles and documents have been examined by the bank or the financial institution at the request of the builder. As the banks and financial institutions understand the technical and legal jargons, it is safe to conclude that their assessment will be a comprehensive record including the track record of the builder, among others. Pre-approved properties are those that are having clear and marketable title as per legal and technical formalities by the bank (lender) for the sanction of a loan. But sometimes, there are also misconceptions related to pre-approved projects which can land you in a fix. Here are some of them:
l Guarantees clear title to the property
When Home buyers, opt for a pre approved property, they are under the impression that the legal due diligence have been carried out by the lender guaranteeing title to the property. But that may not be the case sometimes. Carrying out one’s own diligence is essential to understand the legal aspects.
l You cannot avail home loan from other lenders
Most of the time, builders point out that one can only avail housing loans from a particular bank which has pre-approved a project. In reality, you can opt for any home loan provider of your choice even if the project is not pre-approved by the particular Bank. The only important thing is to undergo complete legal verification.
l On-time completion
Sometimes, home aspirants who have opted for pre-approved property believe that the bank will ensure completion of project on time. That is not the case. There is no guarantee from the bank’s end. Keep in mind that you are liable for re-payment of your Home Loan, not the builder.
l Guaranteed Home Loan availability
Builder often assures you that a Home Loan will be approved if you avail home loan from a particular bank. In reality, there is no guarantee that a housing loan on pre-approved project will always be approved by the Bank. Every home loan borrower has to be eligible for the loan by going through the home loan eligibility calculator and they can also check their monthly instalments using the home loan emi calculator.
Home loan benefits there are, aplenty such as the freedom to choose a lender who offers a competitive home loan interest rate. When you opt for a home loan, don’t fall for misconceptions about pre-approved properties and take a cautious decision.