We all dream of buying our own house at some point in our lives. Buying a home is a huge feat, but it requires a lot of research and patience. One must be very clear when investing in a house, as it is usually a lifelong decision and cannot be undone. For example, if you are not satisfied with the purchase of your car, you can change it, but the house cannot be changed so easily. Buying a property requires care, diligence, and perseverance.
Searching for a house is a big task due to the competitive market. To help you make an informed decision, we are here to help you through this entire procedure. If you are already looking for a house, this guide will help you make the purchase of your house easier. Here’s a step-by-step guide to help you make a wiser, more informed decision when buying a home. Plus, we’ve covered the best time to buy a home.
How to Buy A House – Step by Step Guide
Now that you have decided to buy a house. We make it easy for you with our 8-step guide to buying a home:
Step 1: Finalize a Budget
The first and first step in the process of buying a home is to finalize the budget. Determine the approximate amount for which you want to buy a property. We advise you to always determine the amount of the property in advance according to your budget, so as not to exceed it. First, you need to look at your savings, and if you have enough to make a down payment, that’s great. Otherwise, you can always get a home loan. Buying a property is unique, so be sure to select an amount that meets your needs and fits your budget.
Step 2: Zero Down the Location and Property Type
Another important step is deciding what type of property you want and in what location. According to the requirements of your family, you must select the type of property: apartment, building floor, built house, duplex house, semi-detached house, land to build a house. You can decide based on the facilities and the type of housing you want to go to. You must also decide what type of BHK medicine you need.
For example, if you are an end-user of a property with six family members, four-bedroom home is for you; If the purpose is for investment, two or three bedrooms can be purchased. If your budget allows you to get a duplex, this may also be your option.
Once you have determined the type of property, you need to focus on the location. It is possible that we all want to have a property in a prime location. However, the rates are very high in such areas. Therefore, you need to balance the budget you have with the type of area you want to settle in. You may decide to search for a property adjacent to the main location where you want to buy a home. Or you can choose an upcoming set of suburban areas to be featured. Make an informed decision when selecting a property area. You need to ensure that basic services are within 500 meters of the house, such as a grocery store, a school, a hospital, etc.
Step 3: Explore Rent Rates of the Property
Are you buying a house for investment purposes? Check the rental rates in the locations where you want to buy the property. Rental rates will help you select the right property and location. In this way, you can get a better profit from the property purchased for investment.
Step 4: Resale Value of the Property
Before deciding on the property, you should consider the resale value of the property. Don’t blindly focus on the property site; The resale value of the property must be taken into account. Estimate the future value of the property by looking at market statistics. If you decide only on the location, in future sales the price of the property will be lower than that of other neighboring houses, and this should not be the case.
Step 5: Check Loan Eligibility and EMI
Not everyone can buy a house with a down payment, so we take a route to loans. There are many lenders available in the market that offer home purchase loans, but you should always check eligibility before applying for the loan. The eligibility criteria for each bank vary as per the regulations of the Reserve Bank of India. Eligibility is determined by calculating age, salary, credit rating, work experience, etc. We strongly recommend a good credit score (CIBIL score) for a loan with a lower interest rate.
Once eligibility is verified, you must calculate the EMI for payment within the specified period. Calculating EMI is easy with Magicbriks EMI Calculator for Home Loans. Select the term and EMI according to your financial situation. The shorter the term, the higher the monthly premiums entered, and the longer the term, the lower the monthly premium rate (EMI). As a general rule, your average monthly income should not be more than 40% of your monthly salary.
Step 6:Stamp Duty and Registration Fee
When buying a house, there are some additional fees to pay. Fees such as registration fee, stamp duty, sales tax, and income tax are mandatory. The Government of India collects all these fees. Once you’ve decided on the property, calculate the stamp duty and registration fee for your state. Costs vary for each state; Some states may have higher rates than others. For example, Tamil Nadu has the highest stamp duty and registration fee. Always check these fees to create a fund for these fees separately.
Note: These fees are not included in the amount of the mortgage loan.
Step 7: Additional Costs Related to Property
There are many third parties involved in purchasing a property, such as real estate agents, home inspectors, mortgage brokers, attorneys, and more. Take into account their fees and some other fees such as community maintenance costs if you buy a flat in a community. Also, check all the documents and make a checklist of the documents you need to check before buying or shipping a property.
Once you buy the property, make sure you have documents such as property title, start-up certificate, certificate of occupancy, contract of sale, etc. The age of the property must be verified, if it is a disputed property, a house within the municipalities, etc.
Step 8: Insurance of the Property
Make sure; We repeat, make sure you get insurance on your property. You will keep the future of your property safe. The security deposit can be used for any property ownership issues, legal issues, property damage, etc. There are many home insurance policies available in the market; Choose what suits you best. They have different elements of protection. Once this is done, you can live in peace in the house of your dreams or enjoy renting from your own home.
Is this the Best Time to Buy a House?
The market situation plays a vital role in deciding when to buy a property. In India, the economy has slumped due to Covid-19, leading to lower property prices. So, if you are thinking of buying a property, now is the time.
Low real estate prices: Given the current market situation, real estate prices have dropped due to a lack of demand. Real estate prices are already starting to rise and are still low compared to the pre-Covid era. In general, you can save a good amount of money.
Very Low-Interest Rates – Interest rates are currently at their lowest ever. To support the economy, the Reserve Bank of India cut the repo rate by 115 basis points, due to lower interest rates. Lenders offer home purchase loans as low as 6.50%. Additional incentives that few banks offer are no money coupons that overlap until tenure. The low-interest rate is one of the advantages that will help you save money when buying a house.
Processing Fee: Some major banks like SBI, ICICI Bank, and HDFC Bank have waived mortgage loan processing fees. Even if they charge, the processing fee is lower compared to previous times.
Stamp Duty Reduction: States like Maharashtra have reduced stamp duty temporarily, and some other states have also reduced stamp duty on property. For example, if you buy a property worth Rs 25,000 in Mumbai, you will have to pay a stamp duty of 3%, which makes the stamp duty Rs 75,000. The previous stamp duty was 5% at the time. You will have to pay 1,25,000 rupees. So, you can save 50,000 rupees here.
In Sum – when buying a house
In short, when the idea of buying a house comes to mind, this step-by-step guide will help you buy the house of your dreams. Take these factors into account, such as studying the market, knowing real estate prices, verifying eligibility, checking the document checklist, etc. Also, if you think it is the right time to buy a property, then you should consider it. Other than that, you can search for the right type of property when market conditions are favorable. If the conditions are right, buy the house of your dreams.
Also Read – Women Home Buyers: The Joy of Owning a House