When first-time homebuyers purchase a home, it is an exciting and gratifying experience for them. It is a memorable milestone and marks the beginning of a new chapter of their life. Buying a home is a lengthy process with multiple steps, and it involves a lot of financial decisions and paperwork. It could take months to make a decision and finally buy a property that fits the budget and needs.
We have formulated a list of 10 Essential Tips for First-Time Homebuyers that will ease out the home-buying process-
10 Essential Tips for First-Time Homebuyers
Analysis of Your Financial State
All home-buying decisions start with this most important step. It is to ascertain how much we can spend on buying our first home. To create the budget, evaluate the income of the household, total expenses, and any outstanding debts. In the process of budgeting a home, there are a lot of additional costs beyond the down payment, like property taxes, maintenance expenses and hidden costs.
Arrangement of Down Payment Funds
Generally, a down payment is needed to make a flat purchase. The bank will help finance the purchase by up to 90%, depending on the personal profile of the individual and the credit score. It is wise to start saving to buy a home as early as possible, as it will benefit you in the long run. The more the down payment amount, the less the amount and less the tenure for a home loan. In a fixed-income household, it is wise to make some monthly savings into a dedicated savings bank account and cut down on unnecessary expenses.
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Assess Your Credit Score
Credit score determines your creditworthiness. The higher the score, the more likely it is to get a bank loan approved easily. In India, the most commonly used score is the CIBIL score provided by the Credit Information Bureau (India) Ltd. A credit score of 750 and above is accepted as an ideal score by most banks and other lending institutions.
Check Home Loan Prerequisites
It is advisable to ascertain your loan limit before finalising a specific budget for a home purchase. The first-time homebuyer should go to the bank and get his loan limit checked by the bank chosen. This way, the first-time home buyer gets a fair idea as to how much down payment may be required to make the house purchase and how much financing the bank can provide.
Note Down Your Preferences
As a first-time home buyer, it is essential to note down the preferences of everyone in your family. Factors like location, house size, distance to workplace or school(in case of children)and amenities provided by the builder are of utmost importance. Be realistic in setting up the list as to what the available options in the real estate market are in your budget and in line with your preference list.
Finalise the Area
When a first-time homebuyer starts property searching, he/she has some particular area in mind. They have a certain idea about the value of a property in that locality, but it’s also important to look at various properties in that locality to conduct in-depth research about the market and the builders. This will give them more choices to see which property fits their budget and preferences the most.
Must Read: How To Choose The Right Builder? 6 Important Factors to Consider
Always Consider the Additional Costs
Home buying is a complex process that involves many steps. It also involves heavy finances that are mentioned on paper, and some are hidden costs. Always keep some extra budget for those hidden costs in your budget.
Understanding the Legalities of House Buying
House buying is a legal process that involves the local government authority of the town/city in terms of registration and other legalities. For a first-time home buyer, it can be overwhelming, but it is important to understand the significance of each step. The real estate agent will guide you through the entire process to make it easy.
Deal Closing Formalities
The house-buying process involves finalising the sale and transferring ownership of the property in its last phase. It includes multiple discussions with the builder and the sales team and, signing various documents, paying closing costs, and taking possession of the home. Being well-informed and ready for the closing process will require a lot of patience, but it’s worth it for the first-time home buyer.
Vision for the Future
Generally, when looking for a property for the first time, it is intended for self-use. But in some cases, first-time home buyers buy property just for investment purposes. When the buyer has clarity on what purpose the property will serve, the buying decision will be more informed, and all the factors will be thoughtfully considered.
The home buying process is indeed a tedious one and requires thoughtful and meticulous planning, but breaking it down into steps and tackling them one at a time can ease your way to get the job done.
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