Home buying should never be done on an impulse; since a lot of money is involved, you will really need to sit down and plan out a strategy before even thinking of going home-shopping. Here’s a little guide to help you get through the steps involved in the home buying process:
Scour the internet, newspapers and real estate magazines to look for the types of homes available and their costs. This will give you a good idea of the pricing trends and your budgetary needs.
Clean up your credit score and close all pending bills from loaners before you even think of applying for a home loan. A high CIBIL score improves your creditworthiness and chances of getting a decent-sized home loan.
Once you have seen the kinds of homes available and their costs, you can start determining how much you can afford to spend. You will need to have sufficient savings to make the initial 20% down-payment of the total cost of the new home. The loaner banks pay the remaining 80%. Bankers usually recommend buying a home that’s 3-5 times your annual income.
Pre-approved home loans
This gives you a better idea of the price range of homes you can go for. A pre-approved loan is given without the selection of a property and is dependent on your financial health alone. The lending bank will need to know your income, liabilities, savings and investments, CIBIL score, etc, before deciding on a sum as a home loan. Being pre-approved for a loan shows the builder that you are a serious buyer and might offer you more sops.
Different banks have different rules and regulations regarding home loans. This includes important factors such as interest rates, loan processing rates and duration of loan periods. Shop around till you find a bank offering the most comfortable deals.
Before applying for a loan, sit tight and don’t do anything to change your finances. This includes changing jobs, buying a new car or having huge bills on your credit card.
You are now finally set for the fun part – going home shopping! Ensure that the home you finalize on is located in a good neighbourhood and has easy-to-access facilities like grocery stores, bus stops, good schools, etc. Divide your dream-home wishes into negotiable and non-negotiable needs. For example, the BHK is non-negotiable but the swimming pool is a negotiable factor…
It’s best to hire a property lawyer for the final negotiations and legalities involved in the change of property titles.