Buying a home is a cherished dream for most of us, and the first one is special. Buying a home is a challenge, and it is an even bigger challenge for first-time homebuyers. If you’re buying your first home early in your career, you need to consider many factors before you take the plunge. This blog attempts to educate you on the top ten first-time buyer tips so you can make an informed decision before making this big-ticket purchase.
Top 10 Tips For First-Time Homebuyers
Identify your needs
Assess your requirements. Figure out how big a home you need, how many rooms, balconies, etc.. Which essential amenities are you looking at? Do you want a school or a market nearby? Do you need a separate bedroom for your children? Do you want a room to set up your office table or a playroom for children? Consider the location of a project where you would like to live. Do you want to live at a specific location?
Take your time to consider what your current needs are and what would be your requirements in the coming years. Then, make a list of the things you need and want in your new home. Once you have a clear understanding of your needs, take the next step.
Selecting the right type of property first allows you to decide the budget and all the other things that you need to consider in the home-buying process.
Budget allocation
You would need to part with your savings for the initial cash payment, and the rest may be arranged through a home loan. Decide on a lump sum amount you would be shelling out for a home loan EMI. Here, if there are any other EMIs that you’re paying, consider those too. You would then know the average monthly payout against EMIs every month. As first-time homebuyers, you may consider the following pointers to decide your budget: your monthly income, income projections in the future, expenses, other financial liabilities, loans and debts, savings, and emergency funds.
Once you assess your finances, you will be able to set a realistic budget for buying a home.
Research your mortgage loan options
Various banks and NBFCs lend money to buy a home. Compare the rates at which different institutions are lending and choose the best. Also, consider the option between Fixed and Floating rates; each mortgage loan option has its pros and cons. Pick one that best fits your unique circumstances.
Check for your home loan eligibility so you know how much you need to pull out from your savings. To be able to procure a home loan, you need a good CIBIL credit score.
Hidden Costs
When you buy a home, it is not just the house that you pay for. It is necessary to understand the possible costs involved in buying a home. Knowing all the costs beforehand helps you to set the right budget. There are many hidden costs involved, such as stamp duty and registration charges, brokerage, GST, etc.
Know The Government Schemes and Tax Concessions
As a first-time homebuyer, you can get several tax benefits and become eligible for government schemes. The Pradhan Mantri Awas Yojana PMAY offers concessions up to Rs 2.67Lakh on the home loan amount through a PMAY Credit Linked Subsidy Scheme (*conditions apply).
Under section 80C, you can get a concession of up to Rs 1.5 Lakh on the principal portions of the EMI. Also, you can save up to Rs 2 Lakh on the interest component of the EMI applicable under section 26.
Take help from real estate agents.
A real estate agent is a blessing for first-time homebuyers. They assist you in finding the right project as per your needs and budget. -An experienced agent will negotiate and get you the best deal. Moreover, buying a home is a cakewalk when a real estate agent takes care of all the paperwork and other formalities.
Shortlist and Compare the Real Estate Projects
You must have a few locations in mind when buying a home. Once you finalize a location, your search will narrow down, and you won’t waste time looking for homes here and there. The next step would be to find, compare, and shortlist the real estate projects in the finalized area.
Amenities
Amenities are critical to the home-buying process. There could be fees associated with certain lifestyle amenities; know these beforehand. List out the necessary amenities and less important amenities for you. Avoid unnecessary amenities if they are contributing to the cost. Compare the real estate projects only based on necessary amenities.
Location
Living in a place with a well-developed infrastructure is a blessing. The proximity to quality healthcare services, educational institutions, and retail outlets decides the ease of living in a particular area. If you are a working couple, proximity to employment hubs will be essential; if you are living with the family, you might want schools and healthcare services nearby. Evaluate your needs and choose a property accordingly.
Choose the right developer
Last but certainly not least, choosing the right builder is crucial when buying a home. When comparing projects from different developers, check for the following: the quality of projects delivered, past track record, structural quality, builder experience, number of ongoing projects, delivery timelines, etc.
That was a handy guide for first-time homebuyers. Give it a thorough read before taking the plunge.
5 FAQs for First-Time Homebuyers
A well-developed location is easy to live in and fetches you better rental income. If you select an area that is developing and has a better future, it will be a great investment bet for you in the future.
Do you want a villa or a flat? Assess your needs, size, and configuration, and then make a list of your priorities.
Although you don’t need one, an agent will simply make it easier for you to own a home. They handle all the paperwork, help you find homes that fit your requirements, and make home buying seamless.
There are many parameters that a lending institution would consider before lending: employment history, CIBIL score, down-payment amount, etc.
A down payment of at least 20% is considered ideal. However, it depends on other factors, too, factors such as loan type, lender requirements, and your financial situation.