Mumbai: If there is one sector that can sustain resilient, promising growth for the present year amidst global economic uncertainties, it would be the real estate industry in India. Real estate is an asset class that is witnessing some attractive, uninterrupted growth for first-time home buyers. The growth is mainly driven by growing confidence in government initiatives, the upcoming July budget, and expectations of improved transparency and accountability.
For homebuyers, buying a house is not just a residence; today, it has evolved into a desired lifestyle and the future needs of overall family wellness. Let’s understand home buyer dilemmas and how they can overcome them being first-time home buyers and the mistakes they can avoid going forward.
5 Tips for First-Time Home Buyers in India
Prepare to pay a hefty downpayment first: Saving up the 20 per cent downpayment required to purchase the house of your dreams is always tricky. In that situation, one should be able to plan a house purchase several years ahead, allowing enough time to accumulate a reasonable amount of money before even considering purchasing a property. To create a corpus for downpayment, one can start investing in mutual funds through Systematic Investment Plans (SIPs) and government schemes.
Select the property first and then apply for a loan: Before applying for a loan, it is imperative that a buyer hunts down the right property and understands the kind of locality it falls under. It is crucial to be clear about the type of house and lifestyle the buyer has envisioned for the family.
Compare home loan rates with other lenders: When it comes to financial lending, loan interest rates differ across all financial institutions. For instance, NBFCs or fintechs would have a competitive edge regarding interest rates and repayment flexibility compared to private and government banks. Again, this should depend on buyers’ individual needs, which can only be determined by comparing and studying the interest rates.
Plan to pay EMIs: There is an idiom that says, “Eat an elephant one bite at a time.” This simply means that when it comes to home buying, tackling and planning how to repay your EMIs can make a massive difference at the start of a home loan’s first year. Also, a separate bank account can be opened just to repay EMIs to avoid confusion later on.
Keep documentation and paperwork in place: There is a reason why the Real Estate Regulatory Authority, or RERA, came into existence in 2016. The RERA aims to make the real estate industry more transparent and offer correct pricing points free of manipulation by landlords, builders, and real estate agents. A home buyer should thoroughly check all the home registration papers and stamp duties on the RERA website to confirm a builder’s authenticity and reputation.
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5 Tips for First-Time Home Buyers in India
1
Plan to pay a hefty downpayment.
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Select the property first and then avail of a loan.
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Compare the home loan rates with other lenders.
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Plan in detail on how to pay EMIs.
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Keep documentation and paperwork in place.
Source: News9live Research
Common First-Time Home Buyer Mistakes to Avoid
Failing to plan a budget: The biggest mistake a buyer can make is failing to understand their financial capacity before buying a home. At the end of the home-buying process, a buyer shouldn’t end up betting all his earnings on a house. Hence, a proper budget should be in place.
Buying a home with research: The second mistake is that even after budgeting, the buyer fails to do adequate research to identify a suitable locality. Basic groundwork research on the builder’s reputation, interiors, and construction can save much money.
Failing to compare interest rates with other lenders: Today, financial lending has evolved with the entry of new-age NBFCs and Fintech, as opposed to the old way private and government banks offer home loans. Failing to compare attractive home loan rates can lead to a giant debt trap in the long run.
Failing on home loan eligibility: The down payment for any home loan ranges between 10 and 30 per cent, depending on the loan. Failing to identify your down-payment capacity and directly applying for a higher loan amount with a poor credit score can cost you your ability to negotiate and lead to rejection for a home loan.
What to Know Before Buying a House for the First Time?
Locality and correct structure: Again, finding a locality depends on the buyer’s needs. It is imperative to find a locality that meets basic needs such as a nearby school, hospital, garden, work commute, and so on. Further, when it comes to structure or construction, the buyer can get it checked by a construction quality assistance expert before zeroing in on the house.
Well-priced: You can control the home’s pricing by checking other localities or comparing on the various real estate fintech websites. You can start by asking the agent or real estate executive for the cost breakdown of the overall property.
Ensure correct documentation: Well-placed documentation related to home loans, house registration, and stamp duties paid can save you a lot of time in the future. One can always seek assistance from a financial planner to sort out the documentation correctly.
Hidden costs: The buyer should check if there are no hidden costs for parking or other amenities inside or outside the residential house, including a garden, swimming pool, or in-built gym.
It’s never too early to begin saving for a down payment on a new house. The buyer’s current pay will also determine the money available for monthly savings to buy a house. As with any other objective, the down payment should be factored into buyers’ goal planning early on. However, if buyers purchase without planning, they risk jeopardising their long-term savings, which may have compounded in the future. One can develop an early saving habit by investing in systematic investment plans (SIPs) or government schemes. That said, it is prudent to have a long-term savings strategy (of around 6-8 years) before even starting to plan for a house.
Home buying tips 2024: Purchasing your first Home in India is an exciting step, but navigating the process can be overwhelming. This article provides essential tips for first-time homebuyers to avoid common pitfalls. Learn about crucial steps to take before signing on the dotted line. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
