Buying a home is a big decision for many of us. It is one that requires lot of thought and planning. For some it may be an investment, while for some it may be for their own use. You may need to apply for a housing loan, which you can do even online today.
Another point to consider is whether to go for an under-construction or a ready-to-move in property. It is always a confusing question, since both these properties serve and suit different purposes and intents. In both cases home loans are easily available.
Here are some tips to help you make the choice between an under-construction property and a ready-to-move in home.
The biggest advantage of an under-construction property is the cost. It is much cheaper than a ready home. The price increases as the property nears completion. The earlier you book the flat, the lower is the rate.
This is a good option if you are not in a hurry to get possession of the house and are willing to wait for two to three years. Hence, it may work for someone who is looking to invest in a house, rather than someone is looking to buy for immediate use.
With the Real Estate Regulation and Development Act in place, the issue of delay in possession has been addressed to a large extent. This has helped in ensuring timely delivery of property.
In an under-construction property, customization may be possible in some cases. The builder may allow some alteration as per your needs. For instance, you may want premium floor tiles or additional electric sockets or a change or the cooking area shifted as per vastu rules. Since it is at the construction stage, some builders may be willing to incorporate these changes, and may charge a little extra if required.
Usually, an under-construction property would be in an upcoming residential area. So check out the infrastructure in that locality, such as shops, market, medical facilities, schools, etc. But if you are buying a house in a redevelopment project, this would not be an issue. Since it is an existing residential building, the area around it would be well developed.
Ready-to-move in property
The biggest advantage of ready-to-move in property is that you don’t have to wait for the possession of the house. Hence, it is more expensive than an under-construction house. It is a good option for those living on rent and want to buy their own home. You also don’t have to pay GST in case of a ready-to-move in property.
Since the house is ready it will be difficult to make any alterations or changes inside. You may have to get prior permission from the builder or the housing society’s members for carrying out any work. This is to ensure there is no damage to the building’s structure.
Chances of complaints related to various amenities are also less in a ready-to-move in property. If it is a resale property, keep in mind the age of the building. An advantage in this is case is that the social infrastructure in the locality would be well-developed.
Factors to consider
Irrespective of whether you are buying an under-construction or a ready-to-move in property, it is advisable to get all the property documents verified by an independent real estate expert or lawyer. This will help you know whether the property’s title deeds are clear and if all approvals for the building plan, etc., are in place.
You can avail Axis Bank Home Loans whether you are buying an under-construction home or a ready-to-move in property. There are several options based on your income, property price, repayment capacity, etc. The competitive interest rates and flexible loan tenures ensure that the repayment will not be a burden on your pocket.
Check out the home loan details and interest rates on the Axis Bank website. Use the Home Loan EMI Calculator to find out how much your monthly repayment will work out to, based on your loan amount, tenure and interest rate.
Difference in tax exemption on home loan
Tax exemption on the home loan is also available in case of both under-construction and ready-to-move in properties. But in case of under-construction property, you repay only the interest component of the home loan EMI before you get possession. It is called pre-EMI. This interest component is eligible for tax deduction once the property is complete. The amount repaid as interest prior to getting possession of the house, can be claimed over a period of five years, starting from the financial year in which you get possession. It is advisable to consult a tax expert for calculation of the tax deduction on the EMI repayment.
Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.