If You Are a First-Time Home Buyer, You Need to Read This

Are you investing in real-estate for the first time? Property buying can be very stressful and time-consuming even for old-timers. Contradictory views on prices, stories of frauds and tough-talking agents can intimidate you. To escape from unwanted stress while property hunting, PropTiger.com brings to you a comprehensive and simple first time home buyers guide:  

1)      Assess your finances: Do you have a car loan? Are you yet to repay your education loan? Did you take a personal loan and still paying EMIs? Make sure you fall under neither of the categories before you plan to buy a home. Your annual income might be high, but payments as mentioned above can hamper your credit score and also affect your ability to handle an EMI for a property. Home loan payments generally take around 35-40% of salaries across most mid-level employees. Calculate your monthly living expenses, cross those which can be cut or reduced and then see how much can you spare for an EMI. This preparation can help you answer some questions that your bank might ask.  

2)      Keep a treasure chest ready: As a first time home buyer, you should have saved a few lakhs of rupees to put in as equity for a home loan. Many first-time investors struggle to secure these funds before their loan is approved. This can create unwanted stress and if you fail to arrange the money within the specified time, you might end up missing the deadline and your loan approval might expire. If you have to borrow money from a family member (which many young people do), ensure you get a guarantee before you approach the bank for a loan.

3)      Know why you are investing: Are you investing because the market is hot? Or, because all your colleagues are investing? Are you investing to save tax? Do you simply want to make an investment? Or, do you desperately need a home to stay? Being sure of the utility of the property you are buying can narrow down your search. If you are investing to get returns, go for properties which are being planned or are under construction in areas which are developing. For example, in areas where airports or other infrastructure is planned. If you want a home which you would want to move into immediately to save rent, look for a property which can give quick possession.

4)      Find the right real estate agent: Do your research of the agent or the broker before you start looking for a property. Well-informed agents can guide you to good properties and well-connected ones can get you good deals. As hunting for a property takes a lot of time and travel, a good agent can save you time.

5)      Research the builder and the property: Before you zero-in on a property, talk to people who own homes, neighbours and everyone you can come across for first-hand information on the builder and his reputation. Visit a few construction sites and buildings that he has already built, to check the quality of construction. Cross-check on the timelines that he has delivered on the property. Make sure that the land which the builder has is free of legal hassles. If required, cross-check the ownership of the land and get the papers examined by a lawyer.