First Steps
So, you’re considering buying a house. But, aren’t sure if you should make the move yet.
Home-buying can be as exciting as it is daunting, what with all the legalities, property tax, loans, EMIs, insurance premiums etc.
Renting doesn’t seem like a wise option either, as it comprises ‘throwing money away’ every month, while you could be making money off renting your own house.
Although it is a never-ending debate, home-buying has always been associated with more advantages than disadvantages.
Why invest in real estate?
One major advantage of investing in real estate is, building equity. It could be beneficial, in that your asset’s value might increase over a decade or two. In the initial days, you could even pay off your EMIs by renting it out.
Another is the tax saving benefits that first-time home buyers are entitled to, on home loan interests and EMIs.
Apart from these, there are factors such as security, a sense of belonging to a community and the much sought-after ‘settling down’ that we tend to look for.
What kind of property to buy?
It is important to understand what you are expecting from a house. While for some, it’s an expression of freedom or security, for others it could just be a great investment. This could help you assess the type of property to choose, going forth.
If you’re looking to own a house to live in, then buying a property that is ready-to-move-in would be a wise choice. In this case, location is of paramount importance. A house that is well-connected to educational institutions, hospitals, entertainment centers, offices and is still situated in a quiet locality with a host of amenities, would keep on giving.
On the other hand, if you are looking for a long-term investment or capital returns, then a ready-to-move-in property or one under construction, in a promising location may be considered. One of the advantages of picking a property under construction is that, property owners usually offer customized payment deals. However, there could also be a risk of delay in possession.
Buying a resale property is also a good idea. While these houses are cheaper than new units, you might have to end up spending a good deal of moolah on repainting, fixing things etc. Also, you could own one of them for a much lower price, if you can negotiate when the market is down.
When is the right time to buy?
It’s important to make the biggest purchase of your life at the right time. Make sure you take this decision only when you’re financially and emotionally prepared for it, as opposed to being pressurized by timelines and societal expectations.
Talking to a financial advisor, researching, reading up and understanding realty market also helps immensely.
And when you think you’re finally ready to take bigger steps, assess your current financial position and see what you can afford. You can also take the help of a lender to chart out an action plan for you, based on your financial position. The lender or the bank can then help you with how much you can borrow to buy a house.
A lot of banks today, offer attractive interest and loans to motivated home buyers. So, pick carefully.
A few things to consider:
- Compare and negotiate different home loan options extensively. Don’t fall for low-interest rates. Sometimes, banks offer low-interest rates to woo first-time buyers after which buyers discover heavy bank end charges.
- Pick a local bank or any financial institution and allow them to analyze your financial situation and credit score. Following which, you will receive a document from them with the sum you can borrow to buy a home.
- These days, banks offer home loan insurance and loan as a package. It would be wise to select a loan insurance which can shield your family from loan liabilities in case of your demise.
- Once you’ve narrowed down on the bank to loan from, strike a good deal.
Last but not the least, don’t forget to enjoy your home buying experience!