We have all been through the agonising dilemma of wanting to buy a new home but not knowing where to start. You have dreamt of a space to call your own, but the maze of paperwork, financial decisions, and market choices can be daunting. Thankfully, this article is your companion to navigate this journey.
Let’s delve into the art of purchasing a home.
Setting a Realistic Budget: Knowing Your Limits
Before plunging into the ocean of house-hunting, knowing how deep your pockets go is crucial. Setting a budget streamlines your search and ensures you are not burdened with undue financial stress later on. Given below are some realistic factors you must consider when you get ready to house hunt:
● Current Savings and Earnings:
Evaluate your savings, monthly income, and other financial assets. Choose an EMI calculator to check how much the loan will cost you.
● Consider the Extra Costs:
Stamp duty, registration fees, and brokerage cover the payable ancillary costs involved.
● Factor in the Loan Amount:
If you are considering a loan for a house, remember the golden rule. The EMI should not exceed 40% of your monthly income. Using a home loan EMI calculator with prepayment can clarify your loan amount and tenure.
Understanding Your Credit Score: The Gateway to Your Dream Home
A good CIBIL score is your golden ticket in the home-buying journey. Lenders scrutinise your CIBIL score before sanctioning any loan, making it a crucial step.
● CIBIL Score Basics:
A score above 700 or above is considered good. Anything below might make lenders hesitant or may increase your interest rates.
● Improving Your Score:
Regular bill payments, clearing outstanding debts, and not taking on too many loans are ways to improve your score. For instance, borrowers can improvetheir CIBIL score by diligently paying off their credit card bills every month.
Exploring Loan Options: Picking What Suits You Best
A home loan is not just about borrowing money. It is about finding the right fit for your financial situation.
● Types of Home Loans:
Whether it is fixed interest, floating interest, or a combination, each comes with its benefits and downsides.
● Features and Benefits:
Some lenders offer features like a home loan EMI calculator with prepayment. This allows borrowers to calculate their EMI and understand how prepayment might benefit them in the long run.
● Documentation and Approval:
Lenders require documents like income proofs, property papers, and a good CIBIL score. Always keep these updated and ready.
House Hunting: More Than Love at First Sight
Buying a house is emotional, but one must marry emotion with practicality. Below is another set of factors buyers of homes must consider:
● Location and Infrastructure:
The charm of a house is one thing, but its proximity to work, schools, and other amenities is just as essential.
● Resale Value:
Think long-term. The location and quality of the house should be such that its resale value does not dip drastically over the years.
● Legalities and Documentation:
Ensure the property has clear titles, no legal disputes, and all necessary approvals.
The Digital Home Hunt: Harnessing Online Platforms
House hunting has transcended beyond physical site visits in today’s digital age. Platforms like 99acres and MagicBricks have transformed the landscape. By offering virtual tours, detailed neighbourhood insights, and user reviews, these platforms bring a wealth of information to your fingertips. Before leaving, browse online to shortlist properties that align with your preferences. This saves time and offers a broader view of available options in your desired location.
Green Homes: The Eco-friendly Shift in Housing
The emphasis on sustainable living has never been greater. Green homes, designed with renewable resources and energy-efficient systems, are the future. Features such as solar panels, rainwater harvesting, and sustainable insulation materials set these properties apart. Investing in an eco-friendly home reduces your carbon footprint and can translate to long-term savings on energy bills. As a bonus, you are contributing positively to the environment.
The Importance of Home Inspection: A Crucial Overlook
While a property might look impeccable, underlying issues can lurk. Home inspections done by professional inspectors assess a property for structural issues, plumbing or electrical defects, and potential pest infestations. By investing in a thorough home inspection before purchase, you can avoid costly repairs in the future. An informed decision now can save immense stress down the line.
Understanding the RERA Act: Safeguarding Buyers’ Interests
Introduced in 2016, the Real Estate (Regulation and Development) Act (RERA) has been a game-changer. Aimed at promoting transparency, accountability, and efficiency in the sector, RERA protects home buyers against malpractices. From ensuring builders stick to project timelines to safeguarding the buyer’s money, knowledge of RERA is paramount. Before committing to a purchase, ensure the property is RERA-registered. This legal shield adds an extra layer of security to your investment.
Deciphering Home Loan Fine Print: Beyond the EMI
While monthly EMIs are often the focal point when considering a loan for a house, there’s more to it. Buyers often overlook hidden charges, loan processing fees, and prepayment penalties. It is essential to understand these finer details before signing on the dotted line. By doing so, you safeguard yourself against unforeseen expenses and enjoy a smoother loan repayment journey. Always remember, thorough research now paves the way for financial harmony in the future.
Sealing the Deal: The Final Step
Once you have zeroed in on a property and have the necessary finances, it’s time to seal the deal. Keep the factors listed below in mind while taking the final step:
● Negotiation is Key:
Don’t hesitate to negotiate. If the seller knows you are serious, they might be open to reducing the price.
● Read Before You Sign:
Go through every paper and agreement. Consider hiring a lawyer for this step. For example, Sanjay hired a lawyer who pointed out a clause that wasn’t in his favour, saving him from potential trouble.
● Payment and Transfer:
Upon agreement, make the payment through traceable means and transfer the property to your name.
The journey of purchasing your dream home might be intricate, but with the right steps and knowledge, it becomes a memorable experience. Remember to set a clear budget, understand your financial stance, explore all loan options, and always think long-term.
Krishna Murthy is the senior publisher at Trickyfinance. Krishna Murthy was one of the brilliant students during his college days. He completed his education in MBA (Master of Business Administration), and he is currently managing the all workload for sharing the best banking information over the internet. The main purpose of starting Tricky Finance is to provide all the precious information related to businesses and the banks to his readers.