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.
