Too often, people put off home-buying because it’s a major financial commitment and involves a truckload of effort. However, there are ways to simplify the home-buying process.
Home ownership is a long-term move that can not only offer you huge returns on your investment but is also known to bring in immense satisfaction and a sense of security.
If you’re reading this, then it’s probably because purchasing a home is on your mind. You may still have a few lingering doubts. Here we have put together a handy guide for first-time home buyers in India that talks about how to overcome various obstacles that come in the way of buying a home.
#1: Finding the Right Propert
Purchasing a home is both a financial and emotional decision. You need to look for a property that not just fits your pocket but one that is also close to your heart. After all, a home is where the heart is.
The entire process of searching for your dream home can go sour, if you are unable to find a project that you like or if you choose a particular project, only to be disappointed a few years down the line.
What to do?
Start by making a list of all the factors that make your dream home. This list should include both your needs and wants. The ‘needs’ are generally basic things that could include – a location close to your child’s school or your workplace, high-quality building materials, minimum square feet, two bathrooms, utility areas, green spaces, 24 x 7 security, power backup, etc. The ‘wants’ can include posh amenities like swimming pool, playground, walking tracks, sports courts, etc.
With the help of these factors, start short listing projects that fit your basic criteria. Once you have created a short-list, the next step is to evaluate the properties on your list. Don’t just look at project brochures or ads. Instead, make sure that you go on a site visit (look beyond the model flat showcased by the builder), connect with previous owners to get their feedback on the amenities and features offered by the builder.
Don’t skip ground research, even if it takes time. By following this process, you could easily narrow down your list to two or three projects that you’re interested in. Connect with each builder, negotiate, and make your final decision.
#2: Saving for Down Payment
One of the biggest deterrents for first-time home buyers is saving enough for the down-payment. Though home loans are readily available, they don’t cover the full cost of your property. The lender usually pays only up to 80 to 90% of the cost of the property; the rest has to come out of your pocket. 10-20% of a property is a huge value, and it can be difficult for first-time home buyers to pay for it.
What to do?
Here are some tips to help you save for down payment of your first home:
Borrower from Employers – Check with your employer or HR department as they may also offer the initial deposit as part of your overall salary package. As part of employee retention schemes, many employers have started offering this benefit.
Know your budget and timeframe – Start by determining how much you need to save and the timeframe you have for it. Set realistic monthly targets – this is the amount you have to save monthly so that you can afford down payment when the time comes.
Open a new savings account or a recurring deposit, just for the down payment. Don’t link any credit/debit cards to this account, so that you don’t spend the amount you have saved. Divert any extra cash in hand – bonus, monthly savings to this account. Remember, every contribution you make helps.
Monitor your monthly spending – Use a mobile app to monitor your overall income and expenditures. It’s easy to save when you know where you keep an eye on your spending, as you can then cut down on not-so-needed expenditures.
Credit Card – You could also use your credit card, and make the initial down payment. The credit amount could be converted into EMI.
Life Insurance – Did you know that you can borrow against your life insurance policy? This, however, does not apply to unit linked plans. For most traditional insurance investments, you can borrow up to the policy amount. The downside is that the interest rates are usually high and the repayment time period is usually very short. However many home buyers do opt for this financing option to make their foray into the housing market.
Alternatively, you can avail a personal loan to pay for the down payment. However, remember if you choose this option, you have to pay off two loans EMIs – your home loan and the personal loan – simultaneously.
#3: Finding the Right Home Loan Lenders
Another big obstacle for purchasing your dream home is finding the right lender who is willing to lend you the desired amount. With property prices soaring, paying for it out of your own pocket is next to impossible.
You need the right home lender to help you avail a home loan. Today, thanks to government initiatives and Fintech lenders, availing a home loan is easier than ever before. But, that doesn’t mean, you will get a cheap home loan. Even if you manage to secure a loan, but if the interest rates are high, it could end up costing you more in the long run.
What to do?
Shop around. Compare home loan lenders; check their interest rates to find the best deal for you. Most builders today offer help for buyers to locate the right lender. Make use of government initiatives like the PMAY, women-buyer home loan discounts, to reduce the overall burden of your home loan.
#4: Verifying Property Registration and Other Related Documents
Purchasing a property be it a home, a villa or a plot of residential land involves several checks like – title deeds, environmental clearances, RERA certificates, NOC (No Objection Certificate) by relevant local bodies, encumbrance certificates, building approval plan, completion certificate, possession certificate, allotment letter, buyer-builder agreement and more. This can indeed be overwhelming for first-time buyers.
What to do?
This is where choosing a reputed builder is a huge benefit. Reputed property developers have a trusted portfolio, and they take care of all the legal transactions on behalf of the buyer. This is a huge relief for the buyer. Alternatively, you can hire a property lawyer to handle all the legal processing and verifications on your behalf.
#5: Working on the Interiors
Most home buyers are shocked when they find out the home interiors – painting, flooring, electrical appliance fitting, cupboard, and kitchen installations, decorating – cost a fortune. Not only home interiors cost a lakhs of rupees, but it is a time-consuming process. You need to hire the right contractors – painter, electricians, plumbers, carpenters, and other handymen – for the various jobs.
What to do?
You can overcome this obstacle by choosing ready-to-move-in properties. As the name implies, these properties are completed 100%, and you can move in immediately. The builder takes care of all the details, including the interiors, common amenities, and sometimes even post-sale maintenance, thereby reducing the burden of the home buyer.
Simplify your Dream Home Purchase
Purchasing a home may feel overwhelming and intimidating for first-time home buyers. Use the above guide to overcome the major obstacles and ensure that the process goes smoothly so that you can step into your dream home without any major hassles.
Bonus Tip: Always search for a builder with in-house maintenance, because then the builder would use better quality raw material and that will bring peace of mind for you and your property price will also appreciate with time.
Ashiana Housing build homes. Homes surrounded by vast green spaces and fresh breeze. Homes cocooned in secured gated complexes. Homes where futures are forged and there are opportunities to grow. And Homes in environments brimming with healthy activity, trust and respect. At heart, we build communities with care.