Do not buy a home in India without reading it

Very few people in the country can wake up and buy a home. For the rest of us, making a huge financial decision like buying a home takes a lot of thought and planning. We have listed the most important aspects you need to consider before making this huge financial investment.

1. Set a budget

The way you calculate how much you spend on your home should be based on how much you make and how much you can comfortably pay on EMI. You should not struggle nor live by mouth due to number of EMIs. You start by adding all the sources of income you have i.e. 

 Salary + Freelance work + Bonus = Total Monthly Income

Now, cut your monthly expenses by this amount. If you think your expenses are too high, look at the areas on which you can cut expenses. EMI ideally should not exceed 20-25% of your net pay home pay. If your EMI is 40–50% or more of your net income, you may neglect other goals to pay the EMI, or may struggle if an unexpected expense arises.

2. Save amount for your down payment

The Reserve Bank of India (RBI) and the National Housing Bank have stated that housing finance companies and banks are not allowed to lend more than a certain percentage of the fair market value of the property. It is a LoanTo Percentage Value (LTV) ratio. For example, If you are looking for a loan amount of Rs 30 lakh, then you can get a loan up to 90% of the value of the home. For loans between Rs 30 lakh and Rs 75 lakh, LTV is 80% and above Rs 75 lakh, it is capped at 75%.

To buy a home for Rs. 50 lakhs, you will get at least Rs. 10 lakhs are ready and then you can borrow the rest. Therefore, depending on how much you have saved, you can decide your budget for the home. Or, you can start investing in debt schemes, investing in mutual funds, through monthly SIPs, to build your savings.

3. Decide where to buy a home

Do your research on which areas are growing, it is better to invest here than going to already developed area. The posh areas will be very expensive and you cannot appreciate the rate you want. Growing areas may be more economical and a better option. If you want to avoid congestion in the city, check out the options in the suburbs. While it may be tempting to buy a home in other cities, it is not a good idea. There are many cases in which buyers who were not familiar with the new city got stuck with the wrong project.

You should also be aware of rental rates and resale rates in the area in which you are investing. It shows you how risky / safe investment will be here.

4. See the best time to buy

In India, the most popular time to buy a home is during summer. It is understandable that children are on their summer vacation and easy to relocate as a family, this does not disrupt their school life. Since summer is a popular time, there are many builders who offer special discounts and offers to attract buyers; you can keep an eye on these. This offer also happens during the festival season, so timing is a must. If you want to buy a resale home, be patient. There are many home owners who sell their property at great rates. You can get a home in a great bargain, there are investors who now want to load property that they bought a few years ago at a 0% margin or even for less than what they paid for. Now is your time to grab these homes.

5. Choose the right home

If you are buying a home for as an investment, do not be hasty. Shop; see more and more options before choosing a home. Talk to several builders, talk to the residents and don't leave with your first home.

See reviews, work with experienced teams like SuGanta.com who can show you many options, give you the best deals and even negotiate for you on your behalf. Find out more here. Hire home inspectors and get excellent lawyers so that your documents and home are sound.

Good luck on your home purchase! And remember, SuGanta.com is here to help you in every way. Leave us a message or reach us at SuGanta.com.