Purchasing a home is a capital-intensive investment. Therefore, making an informed decision after assessing crucial factors is essential instead of taking an emotional plunge. This article summarises some essential tips for buying a new home. So, if you are planning to purchase your dream house, keep reading to know such tips.
Consider the following tips for buying a house in India:
Before you proceed to purchase a new home, assess your financial health. This assessment is necessary as you must remain prepared for buying a house and its ongoing expenditures. This assessment will help you to determine whether you are financially ready to invest a lump sum in purchasing a house. Here are some of the ways you can check your financial stability:
Check Your Savings
Purchasing a home requires considerable upfront expenses, including closing costs and down payment. You should have funds saved to meet not only these expenditures but also these will serve as emergency funds. Besides, you must keep your savings in an accessible account that provides a regular return so that you can get the funds quickly whenever you require to meet any financial needs.
Evaluate Your Spending
Analyse your monthly expenses, which include costs you incur in purchasing utilities, entertainment, food, etc. This evaluation will help you to assess how much you can afford to repay a home loan.
Check Your Credit History
You must maintain a healthy credit history and a desirable debt-to-income ratio. Lenders nowadays prefer to restrict housing expenses to 30% of an individual’s total income. Exceeding this figure can be a concern for lenders to sanction a loan. Though, this percentage may vary based on the local real estate market.
Assessing all these pointers will assist you in understanding how much you can afford to buy a home. Depending on the affordability, create a budget that fits your both financial and housing requirements.
It is important to look at the locality and location around the house. It is ideal to purchase a house in an area adjacent to a city’s prime location where the property value is not that high. Avoid buying a house in a location that is yet to be developed with proper infrastructure to avoid inconvenience in the future.
Determine what kind of housing property you need – a conventional single-family house, a house with two to four units to accommodate multiple family members or other types of houses.
Apart from it, ask yourself whether you are buying a house based on size or accommodation. Remain cautious because when you buy a house based on the size, the usable area does not expand in a similar proportion.
Finally, you can check on a real estate website to get an idea about the costs and availability of features that are crucial for you, such as bathroom and kitchen layout.
Always choose a reputable builder dealing with the construction and design of your new home. You should not get lured only by the aesthetic component of a housing property. Instead, you must also pay attention to the construction specifications and materials to avoid hassle later.
Often property buyers do not pay heed to the resale value of a property and solely focus on its price and prime location. If you purchase a property without considering its resale value, then your investment may not be worth it, as your house's selling price will be lower than other homes in the area.
Purchasing a home requires a considerable investment. Therefore, you may rely on external financial assistance through a home loan. So, before borrowing a home loan, you must check the eligibility criteria with a home loan lender.
The eligibility parameters of a home loan usually depend on your income, repayment capacity, age, and existing debt. However, eligibility criteria may differ with each lender. The loan amount you can borrow also varies with RBI regulations or different banks.
When you are planning your budget, you must consider additional expenses. Such costs include your property’s market value and stamp duty charged on it. To know more about them, get in touch with a Ready Reckoner to identify your valuation and sub-zone.
Besides, you need professional assistance to buy a house. For that, you need to bear certain charges imposed by a mortgage broker, real estate agent, lender, land surveyor, home inspector, or lawyer. Apart from these expenses, check the maintenance and parking charges, if any.
Additionally, you must also safeguard your investment with property insurance. This will further help you in availing financial protection against issues with property titles, legal problems, or other damages. So, you must also keep aside some funds to purchase the same.
Another tip for a first-time home buyer is that one must carefully read and understand all clauses, implications, and penalties mentioned in a document. For example, note if there is a penalty clause for delayed EMI payments due to some circumstances, hidden charges, delivery date of the housing property, etc. Verifying all these details before signing the final agreement is essential to avoid problems later.
Several individuals aspire to purchase their dream house. However, often they cannot understand which path to approach. If you are facing similar issues, follow these tips for buying a new home as mentioned above to get a clear idea.
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Disclaimer: This information is added only for informative purposes and collected from different sources across the Internet. Digit Insurance is not promoting or recommending anything here. Please verify the information before making any decisions.
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