A complete guide for first time home buyers
If you’ve landed on this blog during your home-buying process, let us congratulate you on the journey!
It’s not just a significant financial investment, but also a significant emotional milestone in one’s life. With so many options available, it’s easy to feel overwhelmed.
Here’s a quick guide to make it easier!
1. Determine Your Budget
Before you start house-hunting, it is essential to determine your budget. Determine how much you can afford to spend on a home and stick to it. Your budget will determine the type of home you can buy, the location, and the amenities.
Keep in mind that there are other costs associated with buying a home, such as closing costs, property taxes, and home insurance, which should be factored into your budget, so there won’t be any disappointments later.
- Check Your Credit Score
Your credit score plays a crucial role in determining your eligibility for a home loan. Check your credit score and take steps to improve it if necessary. A higher credit score can increase your chances of getting approved for a loan and help you get better interest rates. Read our guide to improve your credit score for home loan
- Get Pre-Approved for a Home Loan
Getting pre-approved for a home loan can help you set expectations on how much you can afford to spend on your home and simplify the home buying process. You can get pre-approved by a lender by submitting your financial and credit information.
- Choose the Right Location
When choosing a location for your home, consider factors such as proximity to your workplace, schools, hospitals, and other amenities. Research the neighbourhood and visit it during different times of the day to get a better sense of the area. The locality should be convenient to the needs of family members.
- Consider the Type of Home You Want
Consider the type of home you want, such as an apartment, a villa, or a standalone house. Each type of home has its advantages and disadvantages. Think about your lifestyle, family size, and budget when making your decision.
- Inspect the Property
Before buying a home, inspect the property thoroughly. It is important to check the legal status of the property and ensure that all necessary permissions and approvals are in place.
Other than legal paperwork, also look for any structural damages, leaks, or other issues that may require repairs.
- Negotiate the Price
Once you have found the home you want to buy, negotiate the price with the seller. Research the market prices for similar properties in the area and make a reasonable offer. Be prepared to negotiate with the seller and don’t be afraid to walk away if the price is not right. A thorough research can help you have plenty of options to pick from.
- Choose the Right Type of Home Loan
There are various types of home loans available in the market, such as fixed-rate loans, floating-rate loans, and hybrid loans. Choose the loan that fits your budget and requirements. Fixed-rate loans offer a stable interest rate, while floating-rate loans fluctuate based on market conditions. Hybrid loans offer a combination of both fixed and floating rates.
- Calculate Your EMIs
Before you apply for a home loan, calculate your equated monthly instalments (EMIs). Your EMI is the amount you will pay each month towards your home loan. Use a home loan EMI calculator to determine how much you will have to pay each month. Make sure you can afford the EMIs before you apply for a loan.
- Apply for a Loan
Once you have chosen a lender, submit your home loan application along with the required documents. The lender will review your application and verify your documents before approving your loan. Make sure you have all the necessary documents, such as income proof, identity proof, and property documents, before applying for a loan.
While you’ve taken a note of the above pointers, there are bonus tips for first time home buyers.
You can thank us later for this!
So, if you are a first time home buyer in India, you may be eligible for government schemes like Pradhan Mantri Awas Yojana (PMAY). The PMAY provides financial assistance to individuals and families from economically weaker sections, lower-income groups, and middle-income groups to buy a new home or to construct a house.
Additionally, first time home buyers can also avail of tax benefits on their home loan under section 80C and section 24 of the Income Tax Act. Make sure to research and understand these schemes and benefits before you apply for a home loan.
Women homebuyers can also avail of special concessions on home loans. Many banks and financial institutions offer lower interest rates and processing fees for home loans taken by women borrowers. Additionally, women can also avail of certain tax benefits on home loans.
So, if you are a woman planning to buy a house, make sure to explore these options and take advantage of the available concessions. You can check with your lender or financial advisor for more information on these benefits.
By considering these pointers, first time home buyers can make informed decisions about their home purchase and choose the right lender and loan type to fit their needs and budget. Remember to take your time, do your research, and consult with professionals before making any big decisions. Good luck with your home buying journey!
We at Puravankara believe in home as a place where family come together to experience the joy of life. Check out our residential projects by Puravankara