Are you thinking about buying your first home? Have you been saving up for the down payment, or are looking into getting a mortgage loan? Well, there are many things that will go into making this big decision.?
First time homeowners often make mistakes when purchasing their homes. Here's 5 things to consider before buying your first home.?
- Duration: How long do I plan on staying in this house?? It is the right decision to buy if you have planned to stay for > 5 years of duration. If you have taken a home loan, the longer you stay in one place, the more equity builds up over time. If you're not planning on staying in the house for at least 5 years, it might be better to see what rent you would be acquiring after giving your place on lease.
- Budget: Planning your finances before you buy can make the process much easier. You can start off by evaluating the current needs of family members and decide the configuration of the home. Then evaluate the budget based on how much money will remain each month after meeting your daily expenses. You can also consider checking how much loan can be acquired by the financial institutions which will make budget calculation much easier.?
- Location: Once the budget is determined, one needs to shortlist a suitable location for the property. Most home buyers consider investing in locations based on individual preferences such as convenience to office location, school, healthcare services, etc. Home buyers need to keep in mind the location has a large impact on resale value of the house. So strategically choosing the location which is closer to the prime city will be a good choice in terms of longer term investment.
- Loan Eligibility: Home loan eligibility depends upon various factors such as the repayment capacity, income, existing obligations or debts and age of the applicant. Financial institutions provide online services such as home loan eligibility calculators to calculate loan eligibility of the home loan borrower. The maximum loan that can be sanctioned varies from bank to bank. Many first time home buyers opt for joint loans with their spouse or family members.
- Home down payment: Once a desired home is shortlisted, 10 - 20% of the property value needs to be paid upfront. Previously the majority of home buyers used to save this initial amount or borrow from friends and family. Nowadays, first time buyers take assistance from home down payment assistance programs that offer upto 50% of the amount.?
Conclusion: The home buying process in India has undergone significant changes post the pandemic, however these 5 things remain as key aspects that one needs to address in the initial stages. The more you educate yourself about the process beforehand, the less stressful it will be. Homeowners who are educated on the home buying process before they look around for their dream house have been shown to have better chances of getting what they want at the price that works for them. With our resources and expertise in this area, there is no reason why anyone should not know all their options when looking for a new place!
