Are You Ready To Buy Your First Home?

Not many of us are imaginative enough to entertain thoughts of property ownership when we are young. It is only after acquiring a certain age that we are sensitised about the concept. It is also only after attaining this age that we would realise that the need for having a house is as pressing as having air to breathe and food to eat. To make up for the lost time, we jump to achieve the goal — that is buying a house — as soon as the truth is revealed to us. This knee-jerk reaction could land you in trouble. Sample this.

While his family was busy working on the final details of his wedding plans, Rajesh Singh was busy taking rounds of a bank branch where he had applied for a home loan. He would not start his new life in a rented accommodation, he had told himself. Singh's plan was ambitious. He was not going to take any help from his family — they must already be pressed considering they have a wedding to fund. Singh would himself make all the arrangements. So, the house search began, a suitable property was picked, and a home loan application was filled. The bank, however, told Singh it would fund only 80 per cent of the total value of the house. He will have to take care of the 20 per cent of the total amount, plus various other expenses that come along with a house purchase. To formalise the transaction, the property will have to be registered (one per cent of the total value will have to be paid to do that) and stamp duty will have to be paid (depending on the state one may have to pay a stamp duty of 4-10 per cent).

Under no circumstances, Singh would be able to bear this additional cost on his own. So he decided to take a personal loan.  He also took a loan against his car, his only asset at that time. After much hard work, the house was bought. Singh seemed to have made his family and the soon-to-be-wife extremely proud. The wedding took place, and Singh did start his new life in a house he owned, like he had promised himself. However, the financial burden is slow-killing him. When almost all his salary will be deducted immediately after arriving in his account, he would feel so helpless.  The house did cost him more than its actual worth, he would be forced to realise.

Singh's example tells us that one must pay heed when one is in hurry. We often think that we have to give ourselves time before finalising the property or checking the related documents. We also make sure we are investing in a good brand. But, before we start checking out the things outside, self-assessment of our own financial standing is often skipped. Often, we do not give ourselves enough time to save the down payment. As soon as we are made aware of the benefits of home ownership, we make a run for it. The sooner a home is bought, the better. While it is true, you have to evaluate your financial standing.

 Also Read: Home-Buying Lessons That Millennials Teach