Real Estate

Table Of Contents

Intro

Make The Right Choice

FAQ:

  • What are the types of home loan interest rates?
  • What are the advantages and disadvantages of fixed and floating interest rates?
  • What does a home loan balance transfer mean?

When you are attempting something for the first time, it requires a lot of careful planning. This is even more crucial when it comes to important life decisions like buying a house. As a first-timer, there are several factors that you might tend to overlook. But worry not; here’s a list of the top nine tips for first-time home buyers. Read on:

1. Home Loan

Before you begin, check if a reputed bank has approved the project. Then, do a thorough market research to see who offers you a better deal. Compare the interest rates offered by all of them, and choose one that’s best suited for your monthly budget. Your credit score is an extremely important eligibility factor – it decides whether your loan application will be approved or not.
A CIBIL score of over 750 (out of 900) is considered good enough for approvals.
Also, check the maximum loan amount you can avail of by understanding the Loan To Value (LTV) ratio. As per the RBI guidelines, you can borrow up to 90% of the property cost for loans up to Rs 30 lakh. If the amount is higher, banks can lend up to 75 to 80 per cent of the total value.
Ask your bank about the processing fee they charge. Most banks in India charge up to 2 per cent of the loan amount as the processing fee.

2. Location

‘Where’ you are buying a house makes all the difference. Always choose a locality that’s safe and is well-connected by road and Metro (if the city has one). If you don’t have your own vehicle, do you think it will be too much of a hassle to find transportation from the area? Also, find out if the locality is prone to floods during monsoon. Water availability is yet another factor of paramount importance; some localities face acute water shortages during the summer. As a home buyer, assess if the location enjoys good property appreciation rates. This will help you in the future.

3. Developer’s Credibility & Reputation

In recent years, you might have heard about many disturbing instances of buyers getting cheated by developers – where people invested their life savings in projects that never got completed or were illegal. Well, that happens when you choose a developer who lacks experience and credibility. Always choose a name that is synonymous with trustworthiness and transparency. Check if they have a reputation for completing projects on time and if all the approvals are in place.

4. Vastu Compliance

These days, many people are placing a lot of importance on a property being Vastu-compliant. While it’s always better to get your property evaluated by an expert, here are some basic points you can keep in mind while inspecting a prospective home:

  • If you believe in Vastu, ensure that the house is compliant
  • If you plan to have a puja/prayer room, the north-east is the best direction for it.
  • The ideal direction for children’s bedrooms is the north zone.
  • The south-west zone is the best for the master bedroom.
  • The kitchen should be in the south zone; the southeast direction is especially auspicious.
  • Bathrooms and toilets should be in the south of south-west, east of south-east, or west of north-west.
  • The ideal direction for the living room is the east or the northeast.

5. Amenities Aboard

Lifestyle amenities are very important when choosing a township. For example, does it have a play area for your children? Is there a well-equipped gym and a park for the senior citizens? Before finalising a home, make sure the township has amenities catering to the needs of the entire family – from the youngest to the oldest. Many prestigious projects boast multiple amenities. Parking is yet another important aspect. Make sure there’s a provision for additional parking space in case you need it.

6. Social Infrastructure

Do not just focus on the amenities within the township and the accessibility of the location; social infrastructure is equally important. Check if your new home is close to your place of work. In case you are looking for a change, are the prominent job hubs in your city close by? Also, make sure that there are good healthcare facilities and educational institutions nearby. Entertainment is equally important; see if there are good malls, multiplexes, and restaurants in the vicinity.

7. Verify the Property

It’s important to verify the property to make sure that it’s legal. Hire a lawyer specialising in real estate to ensure all the documents are in place. These include the RERA Registration number, Mother Deed, Sale Deed, Building Approval Plan, Sale and Purchase Agreement, Completion Certificate, Possession Letter, Khata Certificate, Occupancy Certificate, and Allotment Letter. The unavailability or authenticity of any of these documents will spell trouble for you.

8. Budgeting

While expenses like home loans, registration charges and stamp duty are too obvious to be missed, there are some you could overlook, and these are very important when preparing your budget. These include the interior costs; once you buy the house, you might want to paint it afresh and do up the interiors according to your taste. Buying new furniture, appliances, and decor items could also require a hefty amount. Other expenses you should consider are the commission to be paid to the real estate agent, the fee to be paid to the lawyer (who checked the documents), and the charges levied by movers and packers. Last but not least, don’t forget the expenses incurred by that grand house-warming party you are planning to throw.

9. The Home That Suits You Best

Along with the budget, location, social infrastructure and amenities, the ‘type’ of home you choose is also very important. For example, if you are planning to live alone, a studio apartment or a one BHK is the best option for you. A nuclear family with one/two children can opt for a 2 BHK. If you have a larger family and a bigger budget, you can opt for a 3 or 4 BHK or a villa. A townhouse is also a good option for bigger families with growing-up children, as it will give you private outdoor space as well. Getting the basics right is also very important. Check if the house is well-ventilated and allows you to enjoy an ample dose of sunlight. Adequate storage space is equally important as well.

Make The Right Choice

Follow each of these tips if you are a first-time home buyer. You can also consult family and friends who have bought homes. Their experiences and insights can give you a better perspective. Start preparing to buy your dream home today!

FAQ:

  • What are the types of home loan interest rates?

    • There are two types of home loan interest rates – fixed and floating. As the name suggests, a ‘fixed’ rate of interest refers to a repayment option where the amount you pay as EMI is the same throughout. For example, if you have borrowed the money at an interest rate of 8.5 per cent, it will remain the same throughout the tenure of your repayment.
    On the other hand, if your interest rate is ‘floating’, it will be subject to market conditions and can change accordingly – it can go up or down. You will be given a base rate; if that changes, your EMI can increase or decrease.

  • What are the advantages and disadvantages of fixed and floating interest rates?

    • Both fixed and floating rates of interest have their advantages and disadvantages. Let us look at them.

    Advantages of Fixed Interest Rates

    • The EMI amount remains constant and is not subject to market conditions.
    • Since the payment is fixed, it allows you to do better financial planning

    Disadvantages of Fixed Interest Rates

    • They are usually higher than floating rates. The difference could vary from 1 per cent to 2.5 per cent.
    • You will have to pay the same amount even if the market rates decrease.

    Advantages of Floating Interest Rates

    • Less expensive than a fixed rate of interest by 1 to 2.5 per cent.
    • Ideal for long-term loans, as they will allow you to enjoy cheaper rates of interest as well. This will help you save a substantial amount of money.

    Disadvantages of Floating Interest Rates

    • The unpredictability of the situation will make it difficult for the borrower to do financial planning.
    • Tracking frequent market changes can leave the borrower confused.

  • What does a home loan balance transfer mean?

    • If you have already secured a home loan from a particular bank but later find another one offering the same loan at a lower interest rate and better terms and conditions, you can transfer your home loan from the current bank to the other one. This is called home loan balance transfer.

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