Buying a home is always a dream for every person and its add to the excitement when you buy the house for the very first time. Owning a home is always an emotional feeling which gives a sense of achievement in one’s life. Hence I have brought you 9 tips for buying a home for the first time.
Not only you need to follow this tips but you need to proactive enough to search for home which could be ideal for you.
10 tips for buying a home for the first time
Tip no 1 – Credit Research
Before searching for a home, just check your credit profile or if possible check out your credit score. This is easily available free or on payment of nominal payment. Credit score will give you a rough idea about your credit worthiness and loan you could be eligible to receive from the lenders.
On gain this insight, you will be able to make your budget about home loan down payment and home loan to be availed off.
Tip no 2. Checking out Interest rates
This happens with people who buy new construction property then they avail the loan from institution which is associate with the builder/project. I would suggest buyers to always check the interest rates with the different lenders.
Not only interest rates, but also check other fees too like processing fees, foreclosure charges, transfer charges and other incidental charges if any.
Tip no 3- Buying a wrong home
Everyone desires of a lavish home or atleast home with facilities. But buying a home that do not matches your budget could put you in a dangerous financial embarrassment.
Check out for what amount of monthly EMI you can afford to in order to not jeopardize your existing lifestyle. It is said that your monthly home EMI should not be more than 40-50% of your take-home salary. Just because you are eligible for a 5 million amount does not mean you should avail of the maximum loan.
Tip no 4 -Draining all your savings
Its better to avoid home loan to large extent but that does not mean you should drain all your savings in down payment. Its always better to save for the rainy day. Keeping in mind the current situation, it is advisable to save at least 4-6 months expenses as a buffer to avoid any hassle in the future.
Tip no 5 – Overlooking the Home loan agreement
While you have decided the house, you have finalised the down payment and planned for xxx amount of mortgage loan from the lender. Now its time for signing documents and getting the cheque from the bank. I will advise to the buyers to read the loan amount and documents carefully.
This is because many a times lender forcefully adds home insurance amounts within the loan amount and you end up paying EMI for both. Usually most of the lender inform to the buyers about this and it is buyer’s choice to avail insurance. However some lenders have a mandatory clause to purchase home insurance in order to safeguard their loan amount.
Tip no 6 – Ignoring the Tax
Many buyers also ignore the tax portion buying the property. the buyer has to deduct 1% TDS while paying for property whose agreement value is equal to or above 50 lakhs.
Not only this there are various income tax deductions allowed for first time buyers under section 80EEE and 80EEA. This is apart from interest deduction u/s 24 for Loss from House property.
Tip no 7 – Avoiding calculation of home ownership
Well, all the formalities have been done, you have calculated the EMI, the downpayment and finalised the home. Its all within your range and things for the future are too taken care of. But have you calculated the cost of ownership for your house?
You might have missed into calculation the costs related to property tax, other tax, parking charges, maintenance and may be some contribution to sinking fund/other funds. These could be monthly expenses or annual one depending upon your local municipality or area.
Tip no 8 – Getting the documents Verified from professional
Before finalising and paying to builder/seller, always get the property documents verified from a professional valuer/lawyer. You would be having knowledge about property and costs, but there are certain fine points which a professional would better comprehend. This might cost you some money but this will save you from choosing a wrong property and amount lock in.
Tip no 9- Negotiating Skills
Always try to negotiate on price with the seller/developer as any reduction of price below your budget is a bonus for you. I would suggest always negotiate the amount while cutting the cheque as there are chances that the seller might budge on his number.
So these are 9 tips for buying a home for the first time. Hope these tips will help you in buying the best property at the best rate.
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