Must Knows

How to buy a house in India?

[ecis2016.org] Read on to know all about how to buy a house in India.

How to buy a home is a question with no quick and easy answers.  In this day and age, it requires meticulous research along with an alert mind to detect fluctuations in the real-estate scenario. Some of the major points you would need to remember while buying or researching on how to save money to buy a house in India are mentioned below.: 

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Figure out your budget

Before buying a home, you must first know how much exactly you can afford. It is of no practical use if you aim for a superb amount yet earn an average salary. Therefore, being realistic and patient is the key.

If you want to opt for a home loan, you must carefully consider the down payment you would have to pay before committing to shelling out an exorbitant sum of money every month. 

Typically, banks can cover up to 80% of the loan amount, with the remaining 20% borne by the borrower, along with miscellaneous expenses such as brokerage fee, stamp duty, and so on. Therefore, do not expect the loan amount to cover everything, as you need to know how to save money to buy a house in India.

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Location of your home

This is also a crucial facet while researching how to buy a house in India. The location of your next potential home determines how convenient you would find life to be later on. 

If the property is an investment, you should choose a well-connected area, easily accessible with all modern amenities available. You must also correctly analyse the real estate forecasts to dig out profit from the deal.

If you are looking to buy a home for personal use, you must be mindful of your own needs. If you are a parent, a good school nearby is a must. Fast access to well-equipped medical facilities is necessary if you have aged parents. Connectivity is also crucial, so you must have easy access to transport facilities.

Look for the best home loan rates

It is another vital facet of looking up how to buy a house in India. Home loan rates are game-changers in today’s devastated, post-pandemic world. You must be alert while shopping around for low home-loan interest rates as every percent is equivalent to a difference of lakhs of rupees as a final payment.

You must remember not to always go with the lender offering the lowest rates and check whether the rate of interest offered is fixed or floating.

Fixed rates are interest rates that stay constant and never change, while floating rates vary as time passes, making the final amount payable much more than what you hoped for.

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High resale value

Even if you are thinking of how to buy a home, keeping long-term prospects in mind, it is generally advantageous to opt for a property with a high resale value. 

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In this age of unabated hike in property values, the resale value becomes paramount as you would be able to earn potentially lakhs of rupees from careful planning and investment in monetarily fertile property.

Investors in the real-estate sector pay the most attention to this factor as correct application and utilisation is a game-changer in the private investment scenario.

Good credit score for easy availability of loans

If you are a first-time borrower of loans or even a recurring creditee, you must be aware of the significance of a good credit/ CIBIL score while researching how to buy a home.

A credit score refers to the value assigned to you out of 900. This number has been assigned to you by credit rating companies and serves as an apt litmus test for your loan returnability frequency.

It is good to have a credit score as high as possible to be offered competitive interest rates without any hassle on your home loans. To increase your credit score, you must timely return all previous loans in time, no matter the cost.

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Save for down-payment on your home loans

As discussed earlier, besides knowing how to avail yourself of competent interest rates on your home loans, you must also correctly learn how to save money to buy a house in India, i.e., you must know precisely how much to set aside as a down payment.

As the name implies, down-payment is an amount to be paid upfront before availing of a home loan. It is 20% of the property’s market price, but it is a generally accepted rule of thumb to set aside at least 40% of the market value of your desired property as a down payment.

If you consider an example where you are deliberating on how to save money to buy a house in India worth Rs 1 crore, you must invariably set aside at least Rs 40 lakh as down payment, encompassing the miscellaneous expenses associated such as brokerage fee, registration fee, loan-application fee, etc.

House inspection

It is an important aspect often missed by those researching how to buy a home. A thorough house inspection serves as a significant source of security and confidence to potential house owners.

Before knowing how to buy a house in India, you must know how to differentiate a house with solid foundations and sound infrastructure from an outwardly magnificent yet structurally weak one. 

To that end, house inspections before buying also allow you to check whether all conditions are suitable to your taste. If you find any irregularities or discrepancies, you are saved from finding it out after you had purchased the property, had you chosen not to go through with a thorough house examination.

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 The most crucial thing to remember for those researching how to buy a house in India is to keep all the essential legal documents handy beforehand.

The legal documents you would typically need are :

  • Sale deed/title deed/conveyance deed.
  • Extracts from mutation register.
  • NOC (No Objection Certificate) from Government departments.
  • House Tax/Property Tax Receipts.
  • GPA (General Power Attorney) – only needed if the last purchase of the property was made through GPA.
  • Sanctioned building plan.
  • Allotment letter – needed if you buy from a builder or society.
  • Payment receipts.

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Only with all these documents (and in some cases, a few more) handy can you be able to buy a house in India.

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Seeking out expert legal advice is essential in the cases of property purchases. Whether you are researching how to buy a home for personal use or investment purposes, you invariably require sound legal counsel.

As property prices are ever-increasing, a competent legal advisor would inform you in advance of the trends in the real estate market for you to cash in on. An experienced team of professionals would make the process of property buying and selling extremely easy for you.

If you are buying a home for personal use, an experienced professional will inform you of all the details you need to consider to assume the most advantageous position in the property market. A well-versed property lawyer would be able to obtain the best interest rates for your home loans and many other benefits.

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Property insurance

Property insurance would safeguard your financial future if any damages were to occur to your property. This acts as a safety cushion, allowing you to breathe easy even if any untoward incident were to happen. 

You can choose from a plethora of insurance plans with varying levels of protection according to all your needs. The cost is low and provides coverage in case of problems with the property title, certain damages, or any legal issue.

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Have patience and stay rational

It is common among those wondering how to save money to buy a house in India to act on their impulses and emotions, especially while buying their first property. 

It would help if you remembered that the essential aspect of property browsing is staying rational and not being swayed by momentary temptations. It is often seen that the first property you buy is never the last property you own in life, so it is better not to be excessively picky in the case of buying your home.

To dream of buying a home is easy; to act on that dream and transform it into reality is the challenge many have to negotiate. Keeping your cool in a heated real-estate market would determine your success or failure as all decisions must ultimately be taken by you. 

If you can adequately manage all particulars while deciding on your next home, then the sky could be your limit. 

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Category: Must Knows

Debora Berti

Università degli Studi di Firenze, IT

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