A Complete Guide to Buy a New Flat in Bangladesh

1. Your Budget

When you are going to invest to get your new flat, it’s not a small investment without any doubt. It’s quite natural that you won’t be able to finance it yourself. But if you can, that’s good news. Generally, an appropriate-size flat in Dhaka will cost you around 50 lac to a few crores.

Read also: Budget friendly areas in Dhaka for buying a flat

Well, that’s a huge amount indeed. If you can fix your budget at the very beginning, it will be easier for you to cut down on the options when choosing the exact flat type for you. The highest loan amount for you to purchase a flat is 80 percent of the value of the property, and this is a restricted proportion. It means you need to pay the rest of the amount from your pocket. So, if your flat’s price is BDT 60 lac, the bank or other financial institution can lend you at most BDT 48 lac, you need to arrange the rest 12 lacs on your own.

Read Also: Top Reasons to Invest in Residential Flats in Bangladesh

2. Your Income Level

Your lending institution will be interested in your level of income. They will also like to know your work history, generally, the previous two years’ records. Prepare your income documents to show evidence of constant employment. If you have a monthly salary for your job, you need to show the latest pay stubs.

In case, you have a business or are self-employed, you need to present the tax returns or any other documents as instructed by your lender.

Read this article to know how to reduce expenses in Dhaka according to income.

3. Debt/Income Ratio

Your mortgage lending institution will analyze your loan application with this ratio. Your debt-to-income or DTI ratio informs your lender what amount of your monthly earnings is used after debt. It will help them understand the amount of mortgage loan you can get.

You can get DTI by dividing the monthly debt amount by monthly gross earnings or income. In case, your monthly debt is about BDT 30,000 and your monthly gross income is BDT 70,000, your DTI will be 30,000/70,000 or 42.86%. Your lender will calculate your DTI with the debts given on your report of credit.

Your lender can computer your ratio of housing expense or front-end DTI based on your asked loan type. This ratio compares your total monthly payment of mortgage (principal, insurance, interest, and taxes) to your monthly earnings. For instance, if your mortgage payment is BDT 40,000, and your monthly salary is BDT 70,000, your front-end DTI will be 40,000/70,000, or 57.14%. Before you apply for a loan, you should test your DTI.

Mostly, you will need a 43% back-end DTI or less to get most of the mortgage loans. But this amount can differ based on your loan type, lender, and others.

Read also: How to buy a Flat by getting a loan from a Bank

4. Down Payment

Consider the down payment amount while selecting your desired flat. Generally, a lower down payment will make you pay a higher interest payment. So, while applying for a home loan, you need to give thought to your potential income and job progression. Down payment helps you to calculate the LTV or loan-to-value ratio.

You can calculate the loan-to-value ratio by dividing the total loan amount by the property’s market value. The greater the LTV ratio. the lower the down payment. But a lower down payment will lead to a higher interest payment. So, keeping the down payment lower will influence the lenders to keep the interest rate lower.

Generally, a lower LTV ratio is preferable for a bank because it will indicate that you have invested a larger portion of your money for the ownership of the property, and your chance of defaulting will be lower. But paying a larger down payment will be difficult for a new homeowner with a lower investment. Try to make a larger down payment to decrease your interest rate and EMI or equal monthly installment.

Read also: Thing to know before taking a loan for home or flat

5. Feasible Cost

When you are purchasing an apartment, it will come with several other expenses like processing fees, parking fees, registration fees, stamp duty, brokerage fees, technical and legal fees, stamp paper expenses, GST, and so on. A bank might not initially reveal all of these costs to you. So, if you want to know the feasible cost of your home loan, you need to straightly ask your lender regarding additional expenses.

Read also: Key Considerations for a Loan Against Property

6. Select Your Reliable Real Estate Company

Select your real estate company quite carefully because a reputable real estate development company will represent you to the bank or financial institution. Most of the banks offer loans to the clients of a well-known builders company in Bangladesh. Test the banks with which your real estate company is associated. Best – Tech can be a reliable real estate company that will help to fulfill your dream of a peaceful home.

Related: Top real estate companies in Bangladesh

7. Research

Research appropriately to get your desired flat. Search online for the top real estate agencies in Bangladesh. You will get an idea from their websites because nowadays companies have nice websites. When you are convinced after seeing their websites, visit their physical office and the project yourself. Jot down all your and your family’s requirements well so that you can fulfill all of your requirements accordingly in the design of your flat, and also check the property paperwork.

Take enough time in your hand to meet all your criteria well in your dream house.

8. Personal Investigation

After you have fixed your budget and completed your actual research, now visit the properties to check some critical components of the house you have chosen. The following are the most mentionable among these critical things:

a) Location

Location is a crucial thing when selecting your flat. Choose the location based on your convenience such as adjacent to your office, children’s schools, shopping malls, markets, hospitals, and the like. If you prefer certain locations such as Uttara, and Dhanmondi in Dhaka, or Feni outside Dhaka, and the like, choose flats in those areas. Price will also vary based on the location of your home.

Recommended reading: Exploring the best places to purchase a ready flat

b) Neighboring

Choose the neighboring of your flat carefully. Select an area where the surrounding is peaceful, safe, and with no kind of criminal activities.

c) Privacy & Security

Generally, if you have your flat on a higher floor, it will be considered safer than that on a lower floor. Still, if you like to take your flat on a lower floor, consider the security features carefully such as security guards, intercom, CCTV cameras, and the like. Also, look for other security facilities like fire extinguishers, emergency exits, and fire alarms.

d) Lifts and Staircases

If you have chosen a flat in a multi-storied building, ensure that it has at least two lifts, in case one is out of order, you can use the other one. Staircases are also important to move goods, and furniture, and also for emergency cases.

e) Noise Levels

In case, you have heart patients or small children in your family, try choosing a quiet location where there will be less noise pollution. But if you are looking for some local facilities such as schools, stores, hospitals, parks, gyms, and the like, the possibilities are high to have more sound pollution there. So, try finding a location where the noise will be within a tolerable level.

f) Flat Type

Choose the flat type based on your requirement if you are in a hurry to shift to a new home, try choosing a readymade apartment. Again, if you aren’t in such a hurry, try choosing a flat that is under construction. An under-construction unit will be a better choice because there you’ll get a lot more chance of customization. But while getting an under-construction flat, it would be quite difficult to ensure whether the builder is reputable.

Again, make sure that the building structure is developed according to the construction rules of the concerned authority.

Read Also: Steps to Follow for Buying Commercial Property

g) Utility

While there are places where you can always get the basic utility facilities such as electricity, water, and gas, again, in the city, you’ll get such places where there is a shortage of water and gas. In some areas of Dhaka, there is a huge gas shortage as they get gas only for a few hours of the day. Again, some areas have a huge water shortage. So, before choosing your flat location, investigate properly the availability of the basic utility facilities in that area.

h) Perks and Other Facilities

Recently, modern apartments will offer you extra perks, and other facilities like gyms, mosques, and swimming pools inside the apartment building area. Again, the rooftops are built strong so that young children can play sports like cricket, and football during the afternoon. Parking space is also a mentionable feature. Look for the features that you need.

9. Obtain Home Appraisal

The house appraisal means a survey deciding the present market value of your desired property. You must get an appraisal before you take a mortgage loan to buy a property. A Lender will demand an assessment because they won’t lend you more money than the residence value. In case, the analyzed value is less than your proposed value, you might be in trouble getting financing.

Carefully consider your proposed offer, and try appealing the derived assessment outcomes if you think the analyzed value is so much low.

10. Reason Behind the Sale

In case, you are buying an older flat, you need not invest your money blindly. You must know why the present owner is selling the unit. Determine whether the owner is hiding something from you before buying the apartment.

If there was any problem, you might face difficulties resolving the issues after purchasing the flat. So, don’t be in a rush while buying the property. Take enough time to talk to the neighbors and investigate whether there was any issue, and then buy the flat.

11. Complete Legal Paperwork

You need to complete all the legal paperwork appropriately. Ensure that the title deed contains the name of the seller clearly, and nobody else should own any portion of that property. Get all the legal papers checked by your authorized lawyers before signing the papers so that no dispute arises after signing the agreement.

12. Deal Closing

When the deal closing takes place the entire process of acquisition of your new flat comes to an end. You need to get the selling deed after obtaining the title deed. The selling deed must consist of all the terms of the acquisition. You need to get the selling deed thoroughly reviewed by your lawyer so that no legal gap remains there.

You should sign the agreement after being satisfied that everything is absolutely okay, and legitimate.

If you can meet all of the above requirements, buying a flat will be a good investment for you for sure.

From the above discussion, you must have got your answers to all of your questions like,

• Is buying a flat a good investment in Bangladesh?
• How do I choose a flat to buy?
• Which floor is best in a flat?
• Which documents to check before buying a flat?
• What should I be careful of when buying a flat?

Bonus Tips: Buying a Flat vs a House: Which is better in Bangladesh?

Final Words:

Now, must be confident to buy your new apartment because you have gone through this blog, which is a complete guide to buy a new flat in Bangladesh. In case, you have any confusion and want to implement your dream of having your desired home, please contact Best – Tech Properties Ltd.

Read also: If you want buy a used flat, let’s get to know what is advantage and disadvantage of buying a used flat in Dhaka and all other relevant details.

Bonus part: Read our article to know what kind of questions a real estate agent should ask before viewing a flat