Blogs, Home Buying Guide, real estate August 26, 2021 0

What Every Home Buyer Should Know – A Glossary of Common Terms Used Worldwide

Glossary of terms every homebuyer needs to know

Homeownership and the terms you need to know

Buying a home can be so stressful. But in the midst of it all, there are terms and jargon used by people from the real estate industry, and that you are expected to understand. What is the difference between floor and carpet areas, do you pay extra for the open balconies you love? Does the size of the house change from the carpet area to the built-up area, what is used to calculate your interest?

Here are some explanations, to help you understand what the real estate industry and make an informed choice.

Calculating the area of a home you plan to buy

Carpet Area: According to the Real Estate Regulatory Authority (RERA), Carpet area is the net usable floor area of an apartment, excluding the area covered by external walls, the area under utility shafts, exclusive balcony, or verandah area, and exclusive open terrace area. The carpet area includes the area covered by the internal partition walls of the home.

Built-up area: The built-up area of a home is measured at the external perimeter wall surfaces. It is made up of the carpet area plus the wall thickness and other non-usable areas within the apartment such as the dry balcony, terrace, flower beds, etc. It is always greater than the carpet area. Built-up area is carpet area + area of walls

Super built-up area: The super built-up area is the saleable area, which includes the carpet area, the terrace, balconies, areas occupied by walls, and area occupied by shared structures (e.g. lift, stairs, etc). In some cases, builders include amenities such as a pool, clubhouse, and garden. Builders use the carpet area load factor to arrive at the super-built-up area. Super built-up area = Built-up area + common areas

Exclusive: The term “exclusive balcony or verandah area/exclusive terrace area” means the area of the balcony/ verandah/terrace that is a part of the net usable floor area of an apartment, meant for the exclusive use of the unit only

Glossary of common housing terms

Actual Cash Value: An amount equal to the replacement cost of damaged property less depreciation
Adjustable-rate mortgage: There are two types of conventional loans: Fixed-rate and Adjustable-rate mortgage. With an adjustable-rate mortgage, the interest rate on the loan can change at five, seven, or ten-year intervals. For homeowners who plan to stay in their home for more than a few years, this is a risky loan as interest rates can suddenly spike depending on market conditions
Adjustment Period: There is usually an initial adjustment period, that begins with the start date of the loan and ranges from 1 to 10 years. After the initial adjustment period, adjustment periods are usually 12 months, which means that the interest rate can change every year
Amortization: Repayment of a loan over a specified period of time and at the interest rate specified in a loan document. Amortization of a loan includes payment of interest and a portion of the amount borrowed in each mortgage payment
Annual Percentage Rate (APR): Annual cost of a loan, a standardized method of determining the total cost of a loan. The APR includes the interest rate, points, broker fees, and certain other credit charges a borrower must pay. The fees are expressed as percentages and added to the actual interest rate to determine the total APR
Appreciation: An increase in the market value of a home due to changing market conditions and/or home improvements
Arbitration: A process by which disputes are resolved before a fair and neutral third party (the arbitrator). The disputing parties agree in advance to agree with the arbitrator’s decisions
Back-End Debt-to-Income Ratio: A comparison of your monthly debt payments to your monthly income, and is a widely used measure of your credit worthiness. You calculate your debt-to-income ratio by dividing your minimum monthly debt payments, not including your rent or mortgage, by your net monthly income
Balloon Mortgage: A mortgage with monthly payments based on a 30-year amortization schedule, with the unpaid balance due in a lump sum payment at the end of a specified period (usually 5 or 7 years). The mortgage includes an option to “reset” the interest rate to the current market rate and extend the maturity date if certain conditions are met
Cap (Interest): An interest rate cap is a consumer protection measure on an ARM which limits the amount of change of the annual interest rate and over the life of the loan
Cap (Payment): A payment cap is a consumer protection measure on an ARM that limits the amount by which monthly payments can change
Closing (Closing Date): The completion of the real estate transaction between the buyer and seller. The buyer signs the mortgage papers and closing costs are paid. Also known as settlement date

Closing Disclosure: A form that contains the final details of the selected mortgage loan. It includes the terms of the loan, the expected monthly payments, and lists all fees and other costs of obtaining the mortgage (closing costs). The lender is required to send the Closing Disclosure to the borrower at least three business days before closing the mortgage loan
Collateral: Property that is used as security for a debt. In the case of a mortgage, the collateral would be the house and property
Commitment Letter: A letter from your lender stating the amount of the mortgage, the number of years to repay the mortgage (term), the interest rate, the loan origination fee, the APR, and the monthly charges
Condominium: A form of home ownership in which the home buyer receives exclusive ownership of the interior of a multi-unit building (usually an apartment building or a townhouse), and shares ownership of to the common areas of the condominium (example parking spaces or a swimming pool)
Co-operative Housing: In real estate, co-operative housing is a form of multiple ownership in which a corporation or trust owns the property (usually an apartment complex) and grants occupancy rights to unit-owner’s tenants through their own leases
Credit Report: A credit report is a record of your personal credit history. It is compiled by credit bureaus/credit reporting agencies based on information provided by lenders and contained in public records. It contains very extensive information about your credit history and is probably the most important document lenders refer to when deciding whether to grant you credit

To read more how to calculate, click here

Debt-to-Income Ratio: The percentage of gross monthly income used for your monthly housing expenses, child support, car payments, as well as payments of other installment debts, and payments on revolving or open-ended accounts such as credit cards
Deed: The legal document that transfers ownership or title to a property
Default: The failure to fulfill a legal obligation. A default includes the failure to fulfill a financial obligation, but can also be the failure to perform an act or service that is non-monetary. For example, when leasing a car, the lessee is usually required to properly maintain the car
Depreciation: A decrease in the value of a home due to changing market conditions or lack of maintenance
Down Payment: A portion of the purchase price of a home, usually between 3% and 20%, that is not borrowed and usually paid upfront, with the balance paid at settlement. It is also the difference between the sale price of real estate and the mortgage amount
Equity: The value of your home above the total amount of the liens on your home. If you owe Rs. 10,00,000 on your house but it is worth Rs. 13,00,000, you have Rs. 3,00,000 of equity
Escrow Account: The safekeeping of money or documents by a neutral third party prior to closing. In a real estate purchase, the buyer is usually required to deposit a portion of their down payment into an escrow account where it is held until closing. After the property is purchased, a portion of each mortgage payment is usually deposited into an escrow account to pay the property’s taxes and insurance. It can also be a lender account (or servicer) into which the homeowner deposits money for taxes and insurance
Foreclosure: A legal action that terminates all ownership rights in a home if the homebuyer fails to make mortgage payments or otherwise defaults on the terms of the mortgage
Home-Equity Loan: Also known as a second mortgage, is a closed, secured loan where your home serves as collateral. The terms, interest rates and payments can be fixed or adjustable (they fluctuate based on a key index).Typically, you borrow a predetermined amount from your lender and pay it back in installments (usually monthly)
Homeowners Insurance: A policy that protects you and the lender from fire or floods that damage the structure of the home; a liability insurance, such as if a visitor to your home is injured; or damage to your personal property, such as your furniture, clothing or appliances
Housing Expense Ratio: The percentage of your gross monthly income that goes toward your housing costs
Interest: The cost you pay to borrow money. It is the payment you make to a lender for the money they lend you. Interest is usually expressed as a percentage of the amount borrowed
Lien: A claim or encumbrance on a property to pay a debt. With a mortgage, the lender has the right to take title to your property if you fail to make the mortgage payments. Liens are always against property, usually real property
Loan Estimate: A written statement from the lender detailing the approximate costs and fees associated with the mortgage. A lender is required to provide prospective borrowers with an estimate within three business days of receiving a loan application
Loan Origination Fees: Fees paid to your mortgage lender for processing the mortgage application. This fee is usually charged in the form of points. One point is equal to 1% of the mortgage amount
Lock-In Rate: A written agreement that guarantees a specific mortgage interest rate for a specific period of time
Market Value: The current value of your home based on the highest price a buyer would pay. And the lowest price a seller would accept. An appraisal is sometimes used to determine market value, which is the basis for a home’s “list price” or “asking price”
Mortgage: A loan in which a home serves as collateral. The term mortgage is also used to refer to the document you sign (to give the lender a lien on your home). It can also be used to refer to the amount of money you borrow, with interest, to buy your house. The amount of your mortgage is usually equal to the purchase price of the home minus your down payment
Open House: When the seller’s real estate agent opens the seller’s house to the public. You do not need a real estate agent to attend an open house
Pre-Approval Letter: A letter from a mortgage lender indicating that you qualify for a mortgage of a specific amount. It also shows a home seller that you’re a serious buyer
Pre-Qualification Letter: A letter from a mortgage lender that states that you’re pre-qualified to buy a home, but does not commit the lender to a particular mortgage amount
Pre-approval: A written agreement from a mortgage lender to grant a loan for a home purchase. The pre-qualification is based on the lender’s careful investigation and evaluation of the potential homebuyer’s income, credit history, employment history, personal assets, and debts. Pre-approval assures the seller that a buyer’s offer is valid. It also speeds up the buying process because, once an offer is made, there is no need to wait while the buyer finds a loan
Pre-qualification: An informal way to calculate an estimate of the approximate amount of money a homebuyer can afford to spend on buying a home. The pre-qualification, performed by a realtor or a potential homebuyer, compares the potential buyer’s income and assets to the buyer’s debts
Prepaid Items: Costs paid at closing for taxes, interest, and insurance. Because prepaid items are recurring costs that don’t relate to the acquisition of the property itself, they can’t be financed
Principal: The amount of money borrowed to buy your house or the amount of the loan that has not yet been repaid to the lender. This does not include the interest you will pay to borrow that money. The principal balance (sometimes called the outstanding or unpaid principal balance) is the amount you owe on the loan less the amount you have repaid
Qualifying Ratios: Calculations that are used in determining whether a borrower can qualify for a mortgage. They consist of two separate calculations: a housing expense as a percent of income ratio, and total debt obligations as a percent of income ratio
Rate Cap: The limit on the amount an interest rate on an ARM can increase or decrease during an adjustment period
Refinance: Getting a new mortgage with all or some portion of the proceeds used to pay off the original mortgage
Repayment Plan: This is an agreement that gives you a fixed amount of time to repay the amount you are behind by combining a portion of what is past due with your regular monthly payment. At the end of the repayment period, you have gradually paid back the amount of your mortgage that was delinquent
Secured Debt: A secured debt is tied to a specific piece of property, such as a house. The property, called collateral, guarantees repayment of the debt. If you don’t pay, the creditor can take the property back
Title: Written evidence of the right to or ownership of property. In the case of real estate, the documentary evidence of ownership is the title deed that specifies in whom the legal estate is vested and the history of ownership and transfers. The title may be acquired through purchase, inheritance, devise, gift, or through foreclosure of a mortgage
Title Insurance Policy: A contract by which the insurer agrees to pay the insured a specific amount for any loss caused by defects of title to real estate, wherein the insured has an interest. Homebuyers usually must purchase lender’s title insurance to protect the lender’s interest and may choose to purchase buyer’s title insurance to protect their own interest
Underwriting: Mortgage underwriting is the analysis of the risk involved in making a mortgage loan to determine whether the risk is acceptable to the lender. Underwriting involves the evaluation of the property as outlined in the appraisal report, and the borrower’s ability and willingness to repay the loan
Warranties: Written guarantees of the quality of a product and the promise to repair or replace defective parts free of charge
Variable Interest Rate: A variable interest rate is adjusted, usually quarterly, based on an economic indicator. They are commonly based on an economic index such as the prime interest rate, Treasury Bill rate, or the Federal Funds rate

So here are the ones that will help you. And, as you go through the process, there may be many more that may puzzle you, which you may need to understand. We hope you reach out here, leave us a comment and we will do our best to help.

And, we hope to see you in your dream home very soon.

Suggested reading:
Home Buyers Guide On The Things To Consider Before Buying Home
5 Awesome Ideas To Own A Dream Luxury Home In Bangalore

Apartments for Sale, Blogs, Builders & Developers, real estate, Small Home Community February 13, 2021 0

Why Choosing a Smaller Community Makes a Big Difference

The concept of multi-family apartment living is not something new, and today, smaller communities are a great hit than the bigger ones. Reasons include space, value for money or even just for a secure sense of privacy and comfortable living. With more people renting than ever before in the last 50 years, it has become increasingly evident that living spaces has its benefits. Today, it’s not just about owning a personal sanctum, it’s also about matching your lifestyle and happiness factor to where you intend to live. However, the question arises- does it matter staying in smaller communities of house complexes rather than bigger ones?

If you are at the crux of making the decision of choosing between a flat in a smaller home campus of 50-100 units, rather than in a large community of 1000, let us help you. Listed below are the reasons why a tiny home community is worth considering:

Safety a Priority

Living in a smaller combined dwelling gives a sense of security that’s unavailable in larger units. Selecting a smaller community of residential apartments where almost everyone knows each other is an undeniable advantage as it limits the risks of large numbers of unknown visitors and dwellers. Most residential house complexes have gated communities, controlled entry and exit, CCTV, 24/7 security personnel and a solid fire protection plan in place too. When the unit is small, it’s easier to keep track and control risk factors.

An additional benefit is having neighbours within such close proximity. Should an emergency arise, there will always be someone within reach to be of help or to ring in authorities as opposed to larger units where the reach is distant. This makes small gated communities an attractive option for single men/women, the elderly and families with children.

Community Feel

One of the greatest benefits is the community feel with closer proximity from each other, there’s a greater chance of socialising and creating long-lasting bonds. Families with children can also be at ease letting their children play in common playground areas knowing access is restricted to the limited apartment buildings in the complex. The ‘extended family-like’ feel encourages a multicultural family bonding between all known occupants.

Stress-free Maintenance

Living in a small or mid-size apartment building gives you better professional maintenance carried out by property management companies on time and by uniform standards. No stress, just a call away and easier to reach consensus regarding various aspects of maintenance and considering they are dedicated to the few homes in the residence.

Amenities

Yet another hard to beat factor is the less stressed amenities that come with a small-scale living quarters. Recreation and convenience live right at your doorstep when living in a modern and smaller residential property. However, in larger community the amenities such as party halls, common play areas, swimming pools, squash courts, fitness centres and many such are often over used and it feels like you are in public space rather than private with the recent pandemic onset, it is even more important to restrict access and usage of common areas. A smaller complex would mean limited capacity in common areas by the less residents and enhanced cleaning protocols creating a safer environment.

Parking Space

Parking spaces are especially a boon in cities where getting a spot to park more than 2 cars can be difficult. Being part of a limited number of houses ensures there’s an exact number of parking spots allocated to each resident and also lesser traffic movement within the campus.

Lesser Pollution

With fewer residents sharing an apartment block, chances are the noise levels are lesser too. This also equates to lesser vehicles in the complex avoiding potential bottleneck blockages and spending a long time at the gates of the community.

Privacy

Gone are the days of cramped up condo with the risk of neighbours peeking into your balcony. Developers & Builders in Bangalore are more conscious and cater to the need for privacy by spacing out living spaces. Smaller the number of towers in a compound, more spacing and opportunity for privacy. Balconies too come with walls built on either side, not only framing your view but also protecting from curious Tom’s next door.

Landscaping and Gardening

Small group of buildings give an opportunity to enjoy extensive landscaped gardens among families. Some communities even allow residents to grow their own plants in allocated plots in the gated area.

Moving into new house with lesser units to rent or own, gives a ‘home-like’ feeling without compromising on quality. Experience an individualistic feel, easily identifiable construction than just living in a pigeon-hole among larger units!

Apartments for Sale, Blogs, Ready to Move Flats in Sarjapur Road, real estate January 25, 2021 0

5 Awesome Ideas to Own a Dream Luxury Home in Bangalore

Bengaluru is a city of opportunities and is the place most people from all over come for lucrative jobs, education, and to start a new journey. Finding a job and staying in this city is a dream come true for many people. For those who have already accomplished this, your next dream may be buying a luxury flat with low density of people. There are many properties for sale in Bengaluru so choosing the best among them is a challenge.

Here are some tips to help you

Prime Location:

One of the high priority factor to consider is the location when purchasing 3 bhk , 4 bhk, 5 bhk homes. The interiors of the home can be changed, the security can be upgraded and many other aspects of a home can be improved but not the location. So it is imperative that you consider the location of your choice as well as the neighbourhood before you finalize the home. Some of the things to consider are:

The proximity of the apartment to your workplace and your children’s school.
The traffic situation, considering Bangalore is notoriously famous for it.
The noise and pollution levels of the area.
Ease of access to other neighbour localities.
Transport facilities for any elders that stay with you to move around the city.
Access to health care (hospitals or clinics), shopping malls, schools or colleges, IT Hubs, Business Companies and other amenities.
Accessibility of playgrounds, parks, etc. for elderly/senior citizens and kids to spend time.
There are many happening places and locations to choose to live peacefully without much noise i.e., Sarjapur Main Road, Koramangala, Hsr Layout, Marathahalli, Bellandur, Agara, Outer Ring Road, Whitefield etc.

The Neighborhood:

The second most important aspect is the neighbourhood. It is quite different from the location. The location may be safe, classy, and has all the facilities but it is the people who live in it who also matter. Check if the neighbourhood and neighbours are friendly and are fun.

The Apartment Layout and Builder Reputation:

Now that you have zeroed in on the location and neighbourhood, it is time to move on to factors related to the actual residential property, like:

The main is the real estate company & builder’s reputation and then the layout and structural integrity of the building.
The next is to check if the area and the plan are as per your requirement.
Understand the difference between the super built-up area, and the carpet area so that you don’t end up compromising on space. Familiarize yourself with the jargon used by developers and agents so that you both are on the same page.
Check floors, walls, and the other interiors for cracking and leakage.
Ensure that the building is cleared by the government and the apartment is Ready to Occupy/Move-in and has all the clearance documents. Check with a lawyer for full clarity on that.

Security:

In days like these, living in a condominium also gives you added security, with its single entry and exit points. And guards who monitor who comes in and when the person is leaving, checking with the residents before allowing people into the premises. Apart from patrol guards, the apartment complex should have CCTV cameras, monitors, biometric access, etc. as part of security facilities.

Amenities:

If you have young children, then a huge gym may not be as important to you as open playing spaces. If you are working a lot from home these days, small bedrooms and a large living room may not be your best choice. Most modern flats provide amenities like club houses and visitors parking spaces. Find out what is available and what is important for you.

To find a premium property by following the above-mentioned tips and doing the right property research.