Owning a home is a common goal for many in life. Be it the financial independence it signifies, the assurance of its payback as an investment, or the sentiment behind owning a home, homeownership is a key milestone for most of us despite the large financial undertaking it entails. Considering the decades-long commitment typically associated with a housing loan, extensive research is a must, especially given the current economic climate.
There are several basic things one must consider before investing in a property, including tax savings, home loan interest rate, and pricing. Here are five things to keep in mind when buying a house, especially if you’re a first-time homebuyer.
Choose a property with a clear title
When buying a house, ensure that the property title has no encumbrances or active disputes. Any such discrepancies will cause problems, some of which could affect your home loan eligibility or spell trouble in the long run. Ideally, all property-related documents of the last 30 years must be examined for any issues by a professional. If documents of the last 30 years do not exist, then you must insist on being provided with the documents of the past 13 years or since the property come into existence.
Here are all the illustrative list of documents you should request from the seller.
- Succession certificate, wherever applicable
- Sale deed
- Title documents
- Partition deed, wherever applicable
- Gift deed, wherever applicable
- Development agreement, if applicable
Additionally, all documents provided should be original and have the stamp and registration of the concerned authorities.
Scout for a property within your budget
Your budget is among the most important things to keep in mind when buying a house. Even though a housing loan enables you to access a sizable sanction, consider the impact it has on your monthly budget. The best way to do this is to use a home loan calculator and calculate your EMIs beforehand.
You also need to keep in mind that lenders will only fund up to a certain percentage of the total cost, the rest will be your responsibility.
For instance, if the lender agrees to fund up to 75-80% of the total cost of the home, you must pay the remaining 20-25%. Take this into consideration when choosing a house to buy, as this money will come out of your savings. If the down payment is more than you can handle or greatly depletes your savings, scout for a home that better suits your finances.
Pick a ready-to-move-in property
Considering the current state of the real estate market, it may be unwise to choose properties that are under construction or don’t offer quick possession. The entire financial system is amid an unprecedented crisis and it is better to go the safer route. Ready-to-move-in properties offer this safety, even though they could come at a higher premium. If you’re lucky, you may be able to avail discounts on these as well but be sure to do your due diligence regardless.
Ensure that all compliance norms are met
You also need to ensure that any property you’re interested in complies with all regulatory norms. This includes RERA compliance, which is a mandate for all developers and construction approvals from municipal authorities. In addition, check that the property meets the land use norms to avoid complications.
Assess your financial health before you opt for a housing loan
A housing loan greatly simplifies the home purchase experience, but you should only opt for this route if your finances allow for it. Given the quantum of the sanction, home loan EMIs are considerably large and have the potential to exert a great deal of pressure on your income. Moreover, it is wise to learn about the long-term effects of opting for a housing loan as you’ll be servicing it for at least a decade, if not more. Spreading your finances too thin leaves you vulnerable to emergencies and could increase the risk of default, if you don’t have a contingency fund in place.
Armed with this information, you can easily avoid common mistakes when buying a house. Remember to prioritise your financial wellbeing over all else, and a good way to do so is to opt for the Bajaj Housing Finance Limited Home Loan. With this option, you can avail a high-value housing loan and choose to repay it over a flexible tenor of up to 30 years. You also enjoy the benefit of a competitive home loan interest rate to help keep the overall outgo optimal and cost-effective. To start your homeownership journey, all you have to do is apply online for a hassle-free application.
