Becoming a homeowner is every Indian's dream. In fact, is the largest investment made by the majority of Indians in their life time. Explained factors to consider when carving out a perfect plan to become a homeowner in India, such as Affordability, Location, Home Loan, Broker, Charges, Insurance, Contingency.
Once you and your family is psychologically ready and convinced that the next big step is to become a homeowner, put aside some time consider the below factors to carve out a perfect plan.
The first step is to chalk out a proper budget while purchasing a house, the amount you can afford to pay as down payment and the amount of loan you would require. Depending on your monthly earnings you should first check your affordability and eligibility before deciding to purchase a property. You should have enough money left for yourself to meet other monthly and emergency expenses. If you have a family first consider the major requirements and expenses that you will have to incur and depending on it take your decision.
Before deciding on a property, it is very important to do your due diligence like - check location and locality, if all permissions are there if it is an under-construction project, credibility of builder among others. Don't invest in property without clear land title, non-availability of permissions, or project stuck due to some legal glitch. If you choose wisely your home investment maybe the best investment of your life.
In India, unless you are sure of the builder and their promises, it's better to buy a ready-to-move-in property.
Choosing the right location of your property is very important for your daily commute, safety of family members, appreciation of property price or rentals among others. Location and locality matter a lot as it would add value to your house, and depending on it, property price will appreciate or decline. Infrastructure and convenience like roads, school, hospital, shopping centres among others, in and around the property will help the property price to appreciate.
While buying a property always consider resale value and rental that you may get in the future, so that for any reason if you choose to sell it or rent it you get good returns of your investment. If you choose the wrong property or location then it is possible that your property price maybe less that the other homes around it.
Your home loan eligibility would depend on your repayment capacity, existing loans, existing income and also your age. The maximum loan that can be sanctioned varies from bank to bank, and the eligibility criteria is likely to vary depending on the bank and also RBI regulations.
Usually in cities a broker helps to find you a property, but ensure to hire a registered broker so that you don't get cheated. There are many online apps to that helps to find you a property these days but ensure you do your own checks, if required hire a professional lawyer to check the property papers, before finalising the deal.
Remember, nothing can replace your own due-diligence in choosing the right property.
Find out how much is the maintenance charges of the property every month. If car parking will be provided by the builder and if you have to pay extra for it. Fees or service charge by real estate agents, home inspector, land surveyor, lawyer or notary, stamp duty and registration costs among others should be considered and be a part of your budget. Also, every year you are liable to pay property tax to the government, don't forget to calculate it as part of your expenditure.
Always opt for a property insurance as it safeguards your financial future if certain damages occur to your property due to unforeseen events. If damages occur due to natural calamity or any act of God, in case of your untimely death among others your family can be protected with insurance so that in your absence, your family don't have to take any loan liability. The cost of insurance is usually low. There are many policies but ensure to choose the right house insurance plan so that it protects your property and makes the buying process easy.
If you are part of a housing society, most probably you are covered for structural insurance of the building or a house. Check with the builder or broker.
Know more at Understanding Home Insurance in India
It is advisable not to over stretch your budget for buying a property as it may lead to huge debts and financial crisis if you are unable to meet your daily expenses and emergency expenditure.Think about contingency. Also, in case of any untoward incident like job loss or health issues, you should have a buffer of at least six months to a year to sustain on your own.
Remember, it's a biggest dream for many Indians. Planning such is not an easy task as it requires to satisfy many with in the family. But planning ahead with the above factors make an easier path towards the homeownership. It's time for a Plan!