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You are a woman and want to buy your own property? Here is a handy women’s guide to buying real estate, that can make things simple.
Clare Booth Luce, an American author and ambassador, has said, “A woman’s best protection is a little money of her own.”
If was alive today, her words would have been: “A woman’s best protection is a little money and a room of her own.”
If you are financially independent or dependent, single or married, old or young woman, you would swear by Clare Booth’s words. Men have traditionally been home buyers, when women set out to buy a house on her own it does raise eyebrows –from the real estate agents, to builders; it’s the men who run the show.
Our comprehensive property buying guide that will help you overcome not only the perception bias but save you from getting a rough deal for your home too.
Save for the down-payment amount atleast 9-12 months in advance:
Unlike a big ticket purchases like a car, furniture upgrade etc, house buying requires adequate financial planning. It’s too tempting to fall for those sweet deals where builders come up with complex schemes of payment like no payment now or waiver of 3-4 equated monthly instalments. Go for the simple financing deals only.
With property prices, especially metros, being upwards of Rs 50 lakh for even a one bedroom hall kitchen (bhk), the down payment amount for a home loan can derail your monthly finances. (See saving options below)
Consider your EMI capacity and your financial hygiene:
Before giving a home loan, banks will consider your capacity to repay the equated monthly instalments (EMI) and your credit score. The longer the tenure of the loan, lesser will be the monthly burden.
Credit score is an account of your previous repayment history as collated by credit score agencies like Credit Information Bureau (India) Limited (Cibil). A bad credit score means that you could have defaulted in your previous loan payments or credit card bills etc. Once a bank rejects loan application due to bad score, it may take 6-9 months to improve the score and secure a fresh loan.
Rajiv Raj, co-founder of Creditvidya.com, advises that before even paying a booking amount for a home, women should get their credit score report and then approach a bank or housing finance entity for a home loan approval.
Also remember that women enjoy, preferential home loan rates as some entities lend to women borrowers at 0.25-0.50 percent lower than the usual rates.
Saving Tip for Down Payment
Invest in a short-term debt fund or a fixed deposit
Measure your cash flows: do you expect any bonus or windfall payment, then that amount can be utilised
Any traditional life insurance policies like endowment or money back plans coming up for maturity in near future.
Your purpose matters:
Be clear of the motive of purchase: Is this an investment for tax saving purpose? Or you plan to stay in the property you buy? If it’s an investment purpose, then a property on the outskirts or suburbs or an under-construction property may have a greater scope of appreciation. If you plan to reside, then proximity to civic amenities should be the key determinant.
Mind the middlemen:
Be wary of an agent or a broker who sweet talks a lot about a particular property only.
Be prepared to bravely answer weird questions because of your gender. Anupama Kapoor, an HR and gender diversity professional and founder of Reboot Network, says that brokers can ask things like: Will you live alone in the property? Are you married or single? When Anjali Gulati, founder of Back to the Front went house hunting few years ago, the broker was taken aback when she said “the sale deed will be in my name only”
Assess builder’s reputation:
You don’t want to be on a morcha or a part of a grievance forum to possess your property. Therefore, do a thorough search and informal market survey to get a clear idea about the builder’s track record. Also just because family members or friends are investing in a particular builder’s property doesn’t mean it’s a good deal. A bank approved real estate project doesn’t necessarily mean that the builder has got all the legal clearances from the relevant authorities.
Here is a basic list of legal property documents you need check:
1. Necessary approvals for a Non agricultural land
2. Commencement and completion certificate of the builder
3. Certificate of Title
4. Occupancy Certificate (if it’s a ready to move in property)
5. Relevant approvals for water electricity supply
6. Approved floor layout or the plan (for you might just buy a 20 the floor and builder might have approval for just 15 floors)
The list of documents may vary depending on the State.
Leading housing finance companies offer real estate advisory divisions which can guide you to right kind of property deals. In addition to that, it’s advisable to hire a professional lawyer who can ensure that the necessary approvals are in place and the agreement of sale or purchase is not against you.
Own it legally:
You buy the property in your own name and from your own salary or savings, you better be the owner of it. Anjali Gulati feels proud when she tells me that it’s not just the name plate which bears her and husband’s name, she is the part owner in the purchase agreement as well. On the contrary I also know a lady, who took a home loan in her name, but property is jointly owned with the spouse who fully controls her bank account as well. She remains financially dependent despite working so hard.
Perhaps it’s easier to make such claims if you are earning the bread and butter too. In most Indian families, a housewife claiming ownership right in the property bought by the spouse or family becomes a sensitive issue. In that case, insist on being a nominee in the ownership agreement.
Get the ball in your favour with two little facts:
Check the State you live in as certain states levy lower rates of stamp duty if woman is the sole owner in the property.
Banks will also offer 0.25-0.50% lower home loan rate if woman is the first owner in the property.
Claim the income tax benefits:
This is relevant for women who declare income and pay taxes as an individual. If you own the property and took a home loan in your name, from your total taxable income, an amount upto Rs 2 lakh towards interest repayment and Rs 1.50 lakh towards principal amount of loan is deducted. If you jointly own the property with the spouse and took a joint loan, both of you are eligible to claim upto Rs 2 lakh and Rs 1.5 lakh each as deductions from your income. This however is dependent on the percentage share in ownership which should be clearly mentioned in the sale-purchase agreement. If you are selling the property, you can get a capital gains tax exemption if proceeds are invested in another property within a relevant period.
Property buying or selling is a long-term fixed asset which gives us a sense of security and comfort. Don’t shy away from hiring professionals such as real estate legal advisers or tax experts for a smooth deal!
Image source: woman holding keys and model of house by Shutterstock.
Rachna Monga Koppikar aka The Great Gruhini is a finance writer who’s worked with
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