Having zeroed in your dream home, you apply for a home loan, only to find a lengthy and compulsory loan approval process especially the evaluation of the said property. Ever thought why Banks mandatorily conduct property evaluation? That is done to secure the lender against your home loan. This simply means that if you default or are no longer able to make the repayments then the lender may sell the property to recover its amount.
Let us look at the various pointers the banks check when they evaluate your property.
- Ready to move /resale property
- Maintenance of the property
- Quality of Construction
- The age of the building, the older it is the lesser the value
- Location of the property: if it is located near a market or office are, the valuation is higher
- Nature of the property – residential, industrial, commercial or agricultural – for each valuation will be different.
- The builder must provide requisite possession certificates while handing over of the flat.
- If the property is in a risk zone, banks may not prefer to lend at all. Same goes for earthquake or flood prone areas.
- Under construction property
- Stage of construction of the property: Is it the same as that mentioned in the payment notice given to you by the builder.
- Quality of construction.
- Location of the property
- A Site well connected to hospital, mall, railway station or airport gets better valuation
- Satisfactory progress of work.
- Sanction plan.
- The layout of the flats and area of property is well within permissions granted by the governing authority.
- Banks will provide a loan only if it falls in a region where they service.
This is a critical process for both the bank and the buyer. Not only the evaluation enables the bank to set its loan limit, for the buyer it is a big confidence booster that the property is hassle free- technically and legally.