Buying a house is a huge decision for which you need to be financially prepared. Here are 5 factors that need to be considered before getting one:
While buying the property/house, first ask yourself, “ Do you really want to buy this house? What is the purpose of buying this house? Will it be your own home or will it be an investment?” If it will be your own home then you need to consider the price based on features and location of the house and whether they fit your budget. If it will be an investment then price is everything because that will determine its return. But before taking any decision, do proper research and then take a decision.
Before buying the new house, keep a budget in mind. The budget should be in line with your financial position. Sit down with your mortgage broker or bank to fully understand your financial position. If you do not have the money to buy the house you can always take a home loan. But while taking a loan, make sure that you can repay it on time and that too with interest. Also remember a loan will not cover the entire house expense, you need to fund some expenses by yourself too.
For e.g. If a home costs approximately Rs. 10,00,000, the costs of registration, stamp duty, repairs, furnishing, brokerage, paperwork etc. will take your final cost to Rs. 11,00,000 or 12,00,000. A typical home loan could fund you up to Rs. 7,00,000-9,00,000. The rest—`3,00,000 to 5,00,000—needs to come out of your pocket
If you are taking a loan to fund your property purchase, it becomes your obligation to repay it. You should consider the length of the loan. The longer the term you choose, the lower your monthly payments, but the more you will pay in interest over the life of the loan. Also, if you keep repaying your home loan in a timely manner, then you keep earning tax benefits and boost your credit score little by little.
Research & Timing:
Before buying any property, research about it thoroughly. If a property has been on the market for more than six weeks, assume it is wrongly priced or there is something wrong with it. Conduct a thorough due diligence on the background and profile of the developer, including delivery track record, quality of construction, etc.
Timing plays an important role in buying a house. For e.g. Post Demonetization was an ideal time as property prices fell. Similarly depending on the situation you must consider the right time to purchase a house.
Buying a house or even taking a home loan comes with many hidden costs. Do not go by what the broker tells you they might just mention the basic cost and not other factors such as internal/external development fees, preferential location charges, parking/club/statutory charges, and service tax, which escalate the total cost. Ask for the final cost of the property. Even while taking a home loan make sure all hidden charges such as processing fees, prepayment charges etc. are taken into consideration.
Apart from that buying a new house or property is a difficult task as you need to be aware of many factors such as your area, location, neighborhood, problems related to the house, etc.
Consider all the above factors before you shortlist your dream house. If you’ve recently gone house hunting and feel like we’ve missed out on any points, do let us know and we will include them in this list.