Bangalore Real Estate Trends

This appraisal helps the borrower too

While determining the eligibility for a housing loan,a bank conducts a technical appraisal.The technical appraisal is an important stage in the whole process of availing a housing loan.This aspect of an appraisal process covers the documentation and legal sides of the housing loan,and is done once the credit appraisal process is over. The technical appraisal is done on behalf of the bank.The objective is to ensure that all the documentation related to the property in question like allotment certificate,Katha etc is in order.

The due diligence exercise is carried out before disbursement of the loan. The report of the technical appraisal determines whether the loan can be given for the property concerned.It does not determine the quantum of the loan,which is covered under other appraisal processes.

The technical officer,on behalf of the bank,verifies the original documents,title certificates,clearance certificates, guarantees, security documents,income certificates,address proof etc and cross-checks all the furnished information with the records and documents submitted.A charge report is submitted by the bank's lawyers directly to the bank.

Approvals and clearances from competent authorities are verified.Checks are made in line with internally-set parameters to verify estimates of costs of construction submitted.The enquiry tends to answer questions like whether the property is authorised,whether proper approvals from component authorities have been obtained,whether quality of construction is as per the agreed terms etc.

A check on the progress of construction can safeguard the borrower.Further,a check can be carried out on the estimate submitted by the borrower of current rates and quality of materials,so that the bank does not finance more than the actual cost of the property or construction.In addition,the quality of work and materials used by the contractor can be checked at various stages of work so that the borrower gets full value for the amount invested by him.

Assessing the work at various stages and recommending the disbursement to be released will prevent the borrower from paying excess amounts.The required documents differ from case to case depending on whether the house is being purchased or constructed.The purpose of availing the housing loan - purchase of land,purchase of land and construction of house,or purchase of a constructed house is significant.

In case a borrower is constructing the property, these documents are to be furnished:

Layout plan Allotment letter from appropriate authority Approved building plan No encumbrance certificate from the appropriate authority Commencement certificate Detailed estimate of cost of construction and phases of construction No objection certificate for mortgaging the property Considering the fact that the amount involved is large and the time period long,the bank tries to reduce the risk by conducting a technical appraisal through its own resources.Simultaneously,a borrower also gets a comfort level regarding the legal standing of the deal.

_{Source: Time Property Dt: 6-8-10}