Buying a home reaffirms the fact that the next generation will not have to struggle for a home, as their parents have already created one for them. You own home brings with it, a sense of stability and security and truly makes you the master of your abode. Apart from the fact that you are saving thousands of rupees on rent every month, the very thought that you can design your home the way you want to without any interference from the apartment owner, is indeed a comforting factor. When you sign the cheque for your new home, it is indeed one of your biggest emotional, social and financial investment. In this article, we will tell you whether you should invest your money in an under construction or ready to move home. gravity by southfield nahur east
Benefits of investing in an under construction project
When you set out to buy an apartment, you have two choices: either invest in an under construction project or a ready to move property which has received all the mandatory clearances for legal possession. In an under construction project, the builder will eagerly offer you flexible payment schemes so that you are convinced for investing in their project. If you come across a serious buyer to them, they will even create a customised payment scheme specially for you, which will be more lucrative as compared to their regular offers. In addition to this, you can also negotiate for waiving off the GST, annual maintenance charges and other miscellaneous charges. southfield nahur east
If your purchase is fully self-funded or the down payment for the housing loan is ready and the balance loan amount is approved, then you will be in a stronger position to negotiate with the developer. Another big benefit of investing in an under construction project is that it is registered under MahaRERA (Maharashtra Real Estate Regulatory Authority) and offers complete transparency. 70% of the amount you pay will be invested in a joint escrow account in a scheduled bank and can only be used for that particular project.
As a home buyer, you have the freedom to select the apartment of your choice in terms of higher floor, better view etc. You can also avail the benefit of higher property appreciation, as under construction properties are typically priced lower than ready to occupy properties. As the progresses towards completion and possession, the proportionate price increase will increase the value of your dream home.
Challenges of investing in an under construction project
On the flip side, it is quite possible that the project may take more time to complete as committed in the project document filed with MahaRERA, due to natural calamities such as the ongoing pandemic. Builders can invoke the Force Majeure or “Superior Force” clause, which relieves them from performing their contractual obligations when faced with circumstances that are beyond their control, such as “Act of God”.
Also, if you’re planning to take a loan, you should know that not all under construction projects are approved by leading banks and housing finance companies. Another factor that will affect your home loan approval is your CIBIL score, which should be at least 750 for you to smoothly qualify for a home loan from all housing finance companies and banks. If you have a lower score, you may still get a loan, but the interest rate will be on the higher side and the tenure and repayment terms will be heavily loaded in the lender’s favour.
In conclusion, while it is certainly beneficial to invest in an under construction project, you should be in a strong financial position to negotiate the best terms and consult a good property lawyer before finalising the deal.