Instead of buying a ready-to-move apartment, many people dream of building their homes. Living in a home brings more comfort to your life. To build your home, you need to find the right plot. Purchasing a vacant plot is a hassle these days. It would help if you considered various factors. If you want to get a loan against property then apply for a loan to purchase a residential plot, you should find land that does not have legal hassles. Moreover, only some lands are suitable for residential purposes.
You need to find the land for residential purposes if you want to build your house in the future. In the following section, find a guide on buying the right plot.
1. Check the Investment Worthiness
Is the plot investment-worthy? You may find many vacant plots, though they are unsuitable for developing residential properties. Some buyers also see it as an investment. Thus, you would love to invest in a property that can fetch a good return on investment. So, how can you judge the investment worthiness of a property? You can consider the following factors.
- Location: The property location is an essential thing. The location should be easily accessible. When you find difficulty accessing a plot, developing residential property in such an area will bring dissatisfaction. The plot should have a clear and large entrance. Otherwise, it will not fetch a good return for the investor.
- License and Approval: Most people want to purchase properties through loans. You need to check the license and legal aspects of the property before buying it. For checking the paperwork, you may need a legal advisor. Make sure that you check all documents carefully before finalizing the deal for buying the plot.
- Title Deed: Remember to ask for the title deed from the seller when you go for a physical property inspection. You should only show further interest if the property has a transparent title deed. The title deed also tells the nature of the plot. For example, some plots are residential, while some are commercial.
2. Local Approval on the Plot
In India, various cities have their local municipal authorities. Such authorities deal with property taxes, legal ratification, and other property-related matters. Local approval on a property is essential for developing a house. You may only purchase the land with the local authority’s approval.
For local approval, you may have to submit the applications. However, some municipal authorities have yet to offer such services. In many cases, the applications are made through a virtual platform. It would help if you visited the local office to apply.
3. Property Tax Bills and Receipts
Before purchasing land, you should ensure the seller has paid all the overdue property taxes. If the seller still needs to pay the taxes, you must pay them after purchasing the property. Therefore, a buyer should check the tax bills and receipts before purchasing the property.
Before applying for a loan against a property to purchase a residential plot, you must check the overdue property bills. You must clear the dues before signing the deal for buying the land. Otherwise, you will not get the property loan approval for such properties.
4. Apply for a Loan to Buy a Plot
For property financing, you need to explore the various loan options. For purchasing a plot, most people apply for property loans. Instead of paying the lump sum out of your pocket, obtaining a loan is better. Find a few of those options below.
- Bank Loan: You can get both personal and property loans from banks. In most cases, the property loan interest rate is lower than the personal loan. So, choosing a property loan is a better option.
- Other Lenders: Apart from banks, you can find many other lenders. However, most lenders check credit scores before disbursing a property loan. Some lenders do not even check your credit score. The only problem is that the interest rate is high in the case of such lenders.
5. Find a Legal Advisor
Before purchasing a plot, you need a legal advisor to audit the papers of the property. A professional lawyer can also help you create a legal agreement with the seller. Thus, finding a legal advisor is essential in such cases.
Along with these crucial factors, you should also find a reliable lender to seek a loan against the property. The interest rate on a LAP loan is low if you find a bank or a trusted lender.