10 Tips for First Time Homebuyer

High disposable income coupled with easy availability of loans has made Indians positive towards the real estate investment. However, buying a home is thrilling and nerve-wracking experience at the same time, especially for the first time buyers. Though, socio-economic status, age and profile for a first-time home buyer is changing still the hesitance and trepidation associated with the first time home buying experience is present. Buying a home is an experience in itself and learning the art is not at all easy but still most of the issues can be resolved by carrying out financial homework at the outset.

Here are 10 must follow tips for first time home buyers in India before signing the home buyer’s agreement.

Property Price and Location

Property price and location are bare the two most significant factors to consider while looking to buy property for the first time. According to a survey, price is the main consideration for around 42% of the home buyers and location is another prime consideration for 30% of the buyers.

Assess your Needs and Goals

While buying a property it is important to think about your current as well as future needs. Most of the buyers look out for a home for their family whereas most of the buyers go for this long term investment for capital appreciation. At the time of investing in a property, buyers must assess their current as well as future needs and goals in order to invest their hard-earned money in the right project.

Know your Loan Eligibility

Loans are offered by the bank depending upon the individual’s income and its credit history. Thus, every individual will qualify for different loan amount. It is important for every person to check his loan eligibility beforehand rather than being shocked at last minute. Today people can even check their loan eligibility through online portal in order to have smooth home buy experience.

Have Funds for Down Payment

The entire property cost is not funded by the banks and only 80 to 85% of the property cost is funded by the banks and the rest amount is paid by the buyers itself. Thus, buyers must be in the position to pay the down payment because only after this they will be able to avail loans from the bank.

Good credit score

Credit score is vital for easy loan approval and thus, individuals must check their credit score before approaching any bank for the home loans. Individuals can also get their credit score online, as they can request from any credit bureau’s website like CIBIL, Equifax and TransUnion. Individuals having credit score between 700 and 750 is considered good and for people having credit score below 550 is difficult to get loan approval.

Complete knowledge on securing loans

Securing home loan is not an easy task as individuals have to go through a long procedure and need to produce several documents in order to get their loan approved. It is important for the borrowers to be aware of complete loan procedure, right from the documents required to the home loan approval process to property inspection task carried out by the banks to legal scrutiny to the disbursement of loan. Doing their homework beforehand allows people to secure loan without any fuss and problem.

Know the Home Buying Process

After selecting the property of your choice it is good to be aware of the entire home buying process. However, it may sound intricate and complex but the knowing the nitty-gritty of the processes like contract, home loan, registration of property and mutation will prove beneficial for the buyers.

Enquire about the developer

A developer’s reputation in the real estate sector is a significant factor to check before buying any property, as it will save the buyers from any last minute shocks. Developers with not so good track record or having checkered past should be strictly avoided. Buyers can avail feedback of a developer from the people who have purchased property from that developer. The reviews on the developer will help the buyers to take informed decision.

Opt for the approved projects

Before finalizing any flat in a project, buyers must ensure that the project is approved by the bank and the project is free from other encumbrances. Approval from the banks ensures that the property has concerned authority approvals and all the property related documents are verified and checked by the banks.

Claim Maximum Tax as per the Rule

First time home buyers are usually not aware of the tax benefits offered on the home loan. The buyers must be aware that they can claim up to Rs. 1.5 lakhs for the principal amount paid in home loan under Section 80C and up to Rs. 2 lakhs for the interest paid under Section 24B of the income tax act. The home buyers can claim this benefit while filing their tax returns.

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