Your flat may not last more than 30-40 years

Source :ET:3 SEP, 2011, 04.44PM IST, VIVEK SHUKLA,TNN

Apartment or independent house? It is an endless debate. There are valid arguments to buttress the claims on both sides. While the jury is still out, there is a growing demand from certain sections of the housing sector, which argue that builders must ensure that the apartments they build should be able to face the vagaries of time for at least seven-eight decades. 

There are apartments like Sagar Apartments and Sujan Singh Park, to name a few, which are still standing tall even after 40 to 60 years of their construction. 

It is no secret that economic factors and a fast lifestyle have dealt a death knell for the culture of independent houses in India. As the cost of an independent house is staggering, not many buyers consider the option of going for one now. Land prices have rocketed and made the purchase of a site and construction of a house almost impossible . Cut back to the 80s, when the capital was still green: those were the days when the apartment culture had not yet gripped the capital. Today , the scene is completely different . 

Not only are concrete blocks mushrooming all over the city, large individual houses are fast disappearing with residents opting to give them up to developers. A typical apartment complex or gated community comes with clubs, a large community garden with plenty of area for children to play and pathways to walk. With most of these apartments pitching plenty of light and ventilation as their USPs, individual units, though small, do not make a resident feel cramped. 

Sanjeev Shrivasta, the chairman and managing director of Assotech ,

 , says, "The New Age customers are finding community living more attractive given the nature of facilities offered as well as the ease in tackling maintenance and security, which is the responsibility of the RWA." According to him, a typical homebuyer does not have the time or energy to spare to build a house. 

Sanjay Khanna, director of Kailash Nath Khanna Projects Pvt Ltd, says: "Building an individual house involves not just designing, but finding the right contractor for the construction. And it doesn't end there, as sanctions and approvals for utility connections will still have to be tackled. An independent house also has issues of security and maintenance. These can prove a deterrent, especially when apartment complexes and villas with state-of-the-art facilities are available." 

The fact that fresh land for individual houses is no more available within the capital again acts as a dampener. Getting the desired location is a further incentive for homebuyers to opt for gated communities or apartment complexes, Khanna adds. 

After listening to all these arguments , you are left with no option but to go for a flat. But, will your flat last more than 50 years or more? Well, it is an important question . Azmal Zaheer Khan, an architect with Delhi-based Kothari Associates, is of the view that unlike independent houses, we are looking at apartments which are unlikely to remain in a perfect state for over 30 years, if they as they are not maintained with due care. 

"As far as an independent house is concerned, it can be rebuilt to suit changing tastes and requirements, at any point of time," Khan says, adding that the house can be expanded horizontally if space permits , or vertically, by adding more floors. These are impossible in a unit in an apartment. 

Sanjay Khanna says: "I meet many people who have sold their independent houses to move into flats and are now ruing their decision , as the quality of construction of their flats was bad, especially the plumbing and electricity." 

Do pre-approved loans work for you?

Source :livemint: Abhishek Anand :Thu, Sep 1 2011. 11:37 PM IST


This type of loan comes with many terms and conditions. 
Ensure you know them well before you go for one


A few months back, Delhi-based Punit Bhardwaj booked a flat in Noida. 
While he managed the initial booking amount from his own resources,
 he was banking on a home loan for the rest.


 To his dismay, the bank turned down his loan request 
because there was a problem in his credit report.
 To make matters worse, the builder has refused to cancel the booking.


“I had availed a personal loan and was punctual in paying my instalments.
 But due to some error on the part of my bank, my credit information
 report shows a default against my name. Owing to same reason,
 the bank (different bank) is refusing to finance me any loan,” says Bhardwaj.


 Now Bhardwaj is running between banks and non-banking financial companies.
 A little foresight and planning could have saved him the trouble.

A pre-approved loan ensures you don’t face last-minute hiccups
 such as these. But remember that they tie you down with terms and conditions.
What is it ?


A pre-approved loan is one that is approved for a purpose before the need for it actually arises. 
The most common is pre-approved personal loans, but home and car loans, 
too, get pre-approved. Banks usually offer pre-approved personal loans on
 their own to customers, who have a relationship with the bank in the form
 of a salary accounts, deposits or loans, among others.





Personal loans are usually pre-approved based on your financial health
(read balance in your savings account), but in order to get housing loans
pre-approved, you would have to go through the entire paperwork that is
 normally required for a home loan. The only difference is that the bank 


does not run a check on the property’s title; this is done when the loan
 actually gets sanctioned. 


So you would have to produce your salary slips, 
income-tax return receipts for previous years, among other documents.

“We take into consideration all the criteria that the bank normally have 

and if someone fulfils those criteria, we issue a pre-approved

 loan arrangement letter in favour of the customer which remains

 valid for two months and within the given time frame 

the customer needs to locate a property,” says Sunil Pant, 

chief general manager, State Bank of India (SBI).

 The process is the same in case of other banks, too,

 but the tenor for which the loan is approved varies from bank to bank.

Like all other loans, you need to pay a processing fees here too.

For instance, SBI charges a processing fee of 0.25% 

for loans up to Rs. 25 lakh. So, if you are availing a home 

loan of Rs. 25 lakh, you need to pay a processing fee of Rs. 6,250.

The benefits

Know your budget: When pre-approving a loan, the bank looks at your repaying capacity and accordingly fixes the loan amount. This gives you a budget and you have to look for a house that fits into this budget.

“One can add his own contribution to the amount which we have mentioned in our pre-approved arrangement letter and shop around the same budget,” says Pant.

Get discounts from builders: Some builders provide discounts to customers who have pre-approved loans since there is surety that the person is interested in buying a house.

“Since you already have an in-principal approval, you can bargain for additional discount with the builder and at the same time can negotiate with other builders, too, and should settle for that builder who offers the best deal,” says Satkam Divya, business head, Rupeetalk.com, a NetAmbit venture.

Time lines not a worry: Customers often complain about the time banks take in sanctioning a loan. There have been cases where people have missed the property of their choice. A pre-approved loan solves such problems.

The drawbacks

Meet deadlline for house hunting: Even though you are required to do complete paperwork, the loan remains valid only for a particular time frame fixed by the bank. For instance, while SBI pre-approves a home loan for two months, Kotak Mahindra Bank Ltd pre-approves for six months.

It is possible that you do not get the house of your choice in the stipulated period. If you fail to identify the property in the given time frame, the loan agreement gets cancelled and the process needs to start afresh.

Pay processing fees twice: Another thing that pinches is the fact that in case you are unable to use the pre-approved loan within the stipulated time and get it approved again, you would have to pay the processing fees again.

Loan amount may vary: When calculating the loan amount, banks consider your repaying capacity at the prevailing interest rates. However, interest rates may change during the pre-approved tenor. If that happens your eligibility for a particular loan amount may also change. In fact, banks factor in interest rate changes every month and accordingly keep changing your loan amount.

No guarantee: A pre-approved loan does not provide the guarantee of lending. For instance, if you finalize a house but the bank does not find the title of the property satisfactory, it may withdraw the loan it approved earlier.

Nonetheless, a pre-approved loan indicates your ability to borrow and whether or not you fulfil the criteria laid down by the bank. So it may come handy