Buying a home is a big decision. One of the points you should consider before you apply for a Home Loan is the time you want to buy the house.
Deciding when to buy a house depends on many factors. Your financial position, your monetary commitments and obligations, the real estate market, availability of homes within your budget, home loan eligibility and so on. For some buyers, for instance, spring season and the festival season is the best time to buy a new home.
Let’s analyse the different factors that determine whether the time is right for a property purchase.
The Current Real Estate Situation
Over the past two years, there has been a slowdown in the real estate market in India. The global economic crisis, uncertain job market, high prices of residential property, and other factors led to a hesitancy among buyers to invest in a property. Developers and builders who invested heavily in putting up large apartment complexes and housing colonies now have a huge inventory of unsold units.
This situation can be beneficial for those looking to buy a home now. Builders who want to clear their inventory are now offering attractive deals on homes that used to be in high demand a few years back. This could very well be the ideal time to buy a home. If you are looking to invest in a home, look at the current offers and deals, and understand them clearly before you shell out the down payment towards buying a house.
Tips Before You Take a Home Loan to Buy a House
Here are some things to look out for before you opt for a home loan:
High-end, luxury homes are huge financial burdens and developers are now willing to sit across the table and discuss a reduction in prices on these properties.
You can buy a home where the builder accepts 20% of the price as the down payment, and you pay the remaining amount when the project is completed.
Builders can offer to pay the pre-EMI or the interest on Home Loans for a period of time till the actual EMI payments begin. However, in this case, the builder might charge more amount per square feet to offset the interest amount they pay on your behalf.
There are offers that provide interest waiver or lower interest rates for a certain period. In such cases, be sure that you understand the interest rates and the exact EMI you would need to pay after the resumption of normal rates. Sometimes, this might result in a higher EMI than you planned for.
Apartment complexes and housing colonies can have some common facilities that can add to the price of your home. If there are additional costs for some amenities that you might never use, look for a home that comes without these facilities to lower the cost.
Factor in Other Commitments While Buying a Home
If you are planning to applyfor a Home Loan, the EMI will take up a huge part of your monthly income. Check to see if you can afford the EMIs.
If you have other commitments like saving for your children’s education and marriage, or for retirement funds, plan how much of your income can be put aside for the EMI on the housing loan. If this will affect your other financial requirements, consider living in a rented house for a bit longer. Wait for some time before buying a house, preferably until your income increases and you can meet the required EMI payments easily.
