Buying home is not rocket science. Still you must keep certain things in mind while closing the deal Read on…
We all dream of owning a home. We all dream of a life without having to worry about exuberant amounts of rent. Buying a home is usually the biggest financial decision of our life which requires a lot of planning and research, due diligence, and a highly focused approach. A wrong decision while buying a home can cause financial distress, but in the current situation, it could have devastating financial implications as well. When it comes to buying a home, we all hope to find a home that fulfils our many desires and satisfies all our needs, a home that has been specifically designed for us. With so many options available in the real estate market, there are many things to lake Into consideration when buying a home, especially when it’s the first time you’re buying one. Talking about the key things that a buyer must not Ignore while buying a home, Ashwinder A Singh, CEO, residential at Bhartiya Urban, says, ‘Since buying a home s a more permanent decision than renting a name, its important to analyses every aspect of what you’re investing in and make sure the home you intend to buy will keep you md your family happy for the foreseeable future. Here are a few tips to help you with your home buying process! Singh outlines a checklist of 10 points for a first-time buyer.
1. CREDIT AVAILABILITY VS HOW MUCH YOU CAN AFFORD
One’s credit score is one of the major factors that contribute to the process of choosing the ideal home. If your credit cards have been maxed out and you often pay bills late, It directly affects your credit score. This, In turn, can affect mortgage rates and be a deciding factor in the home-buying process. There-fore, being aware of your credit score and being mindful of your expenses helps in determining how much you can afford when choosing a home.
2. FINANCIAL DISCIPLINE CM WHEN IT COMES TO DOWN-PAYMENT COSTS
Financial discipline is extremely essential if you’re looking to invest in your own home. Down-payment costs range from 10 percent to 25 percent of the market value of the property which is paid from your own pocket. In order to be able to afford these amounts, being aware of your expenditures and accordingly cutting dawn on costs helps expand your income pool.
3. BEING AWARE OF THE HOME FINANCING OPTIONS AVAILABLE
One of the key steps when purchasing your first home is obtaining a mortgage. There are various types of loans available in the market and finding the right one can be an overwhelming task, therefore spending time to understand the property’s location and the basics of property financing can help you pick the right option that is mast suited for your needs.
4. FINANCIAL HEALTH OF REAL ESTATE DEVELOPER
Owning a home is a huge investment, therefore making the right choices is extremely Important. Investing in the wrong property can end up causing a lot of trouble in the future. A developer’s financial health can be determined by their RERA registration numbers, their annual reports reading customer reviews or by visiting their previous projects.
5. PROJECT TIMELINE : TIMELY COMPLETIONS
The pandemic has influenced every aspect of our life. This stands true to the real estate market as well. The onset of the virus has changed consumer buying behaviour and their decision making processes. The timely completion of projects has now become a huge deciding factor for consumers. This also establishes trust between buyers and developers.
6. LOAN REPAYMENT OPTIONS
When choosing the most suitable loan, determining the repayment options, the payback period and lump sum payback options, play a huge role. Based on what your needs are, a fixed rate of interest or floating rate of interest can be explored. To choose the right one, proper research is needed which will further impact your over-all home-buying process.
7. WORD OF MOUTH FEEDBACK
Another way in gauge the developer’s success rate as a determinant in your home buying process are referrals. This showcases the authenticity of the project.
8. SOCIAL INFRASTRUCTURE AROUND THE PROJECT
One of the main factors when picking the ideal home is the presence of social infrastructure around the property. The presence of schools, hospitals and department stores in the vicinity helps in determining the value of the property.
9. PROPERTY DESIGN
Being smart about your purchase is highly essential when buying a home. Being aware of terms such as square area, built up area and super built up area makes sure you do not get cheated. This ensures you are getting the promised amount of space for the amount you are paying.
10. NEIGHBOURHOOD
living in a good neighborhood that is equipped with the necessary amenities is an essential need especially after the pandemic. Thus, the neighborhood the property is located in is an important factor to take into consideration when purchasing a home.
Adding further Amit Goenka, MD and CEO, Nisus Finance, says, ‘Owning a home is a dream for many people, but to translate that into reality requires hard work, diligence and financial commitment. As a first-time homebuyer you need to be extra careful and have an in-depth understanding of the processes involved. Looking for a home requires your time, effort, and commitment. You need to carefully weigh, your options given your current life stage and budgets. Most people purchase a house only once in their life, so it is exceedingly important You that you do it right”
Given the complexity of home buying, here are first time homebuyer tips: Start saving early : You can never completely discount getting impacted by a financial risk, especially when the overall economic situation is still going through a rough phase. To mitigate the financial risks, you should be ready with an adequate amount of contingency funds. This emergency corpus should be sufficient to meet your crucial financial requirements including your regular expenses and your EMIs
Decide how much home you can afford: Figure out how much you can safely spend on a house before starting to shop. Home affordability calculator can help with setting a price range based on your income, debt, down payment, credit score and where you plan to live.
Goenka also underscores the need for a healthy credit score. “Most of the banks have linked their home loan interest to the borrower’s credit scare. A higher credit Score (usually above 750-800) normally results in lower rates and vice-versa, subject to fulfilment of other. conditions. So, if you plan to buy a home, you must assess your credit score and make sure that it is maintained at a higher level get a home loan at the lowest possible interest rate.”
What type of house: To-day, there is no dearth of choices in housing. You can get everything from a small studio apartment to a mansion. Decide on the type of house that is most suited to your needs,
Give a thought to amenities: Today, housing complexes come bundled with amenities like gyms, pools, club houses, etc. However, the cost of these amenities must be borne by the occupants You should carefully weigh the need for these amenities and whether they fit in with your lifestyle. Thus, if you have young children, then having an apartment complex with a game room may be a good Investment. Do not forget to take into consideration parking areas or garages if you own vehicles, you will need space for them.
