9 Easy Steps To Buying A Home Of Your Dream.
Purchasing a home is a significant milestone in an individual or family’s life, and it certainly tops many people's lifetime to-do lists. It may be their list of financial fears too. But it indeed doesn't have to be such a stressful experience. With care and research, one can take control of the home-buying process.
House hunting for the first time buyers can be a fascinating process. Sometimes tales of regretful home-buying mistakes and the not-so-distant housing market meltdown have also given it a bad reputation for being a stressful and confusing experience. It doesn't have to be that way, that is why we created this handy checklist, which helps explain how to prepare to buy a house and help safeguard your finances in the process.
1.Identify how much you want to spend on the house
This should not be a surprise: Your first step in the home-buying process is to determine your budget, just as you'd likely do for any significant financial investment.
But where to start?
“As a general rule of thumb, the home prices that are 2 to 3 times your annual income," says Mr Ankit, the proprietor of Myshopdeal who has a great knowledge of the market.This helps ensure that you're not taking on a larger investment commitment than you can afford.
Speaking of loans, Myshopdeal recommends that payments not exceed 30% of your monthly gross income—but if you have other high costs, such as car loans and school fees, it can be wise to pare down this percentage even more. If you're not sure what's realistic, consider seeking help from a financial professional, who can help walk you through an appropriate breakdown, based on your situation.
After you've determined your budget, it's time to look at your cash resources. We suggest saving up a minimum of 20% for your down payment to avoid breaking your prior investments.
2. Decide the features which are essential and which can be done without
Only a few lucky people find the perfect home within their budget and do not have to do a few alterations before moving in. So before you go house hunting, brainstorm a list of what you absolutely must find in the house you want to buy.
Must haves are the number of bedrooms, bathrooms, proximity to office, school, departmental stores and security features. You might also have a preference for outdoor space, sunlight facing rooms,
The things that are optional are swimming pools, manicured gardens, clubhouse and extra facilities.Although some of the properties which we deal with have all these included in the package.
Make an objective decision between two or more houses—as well as remind yourself of what's important, versus what could be luring you to pay more than necessary.
3. Deciding whether you need a real estate agent
Browsing online sites for available homes in your neighborhood is an excellent place to start to get a fair idea. This can help confirm whether your budget and house must-haves are reasonable in light of what's for sale.
This is also an awesome time to decide whether you'll hire a real estate agent if you haven't already. There is no obligation to hire an agent, but there are several potential benefits to working with one. First of all, an agent can provide access to more home options than you'll likely find yourself by looking up on the web. They will also set up viewing appointments as per your choice. Since home-buying can be an emotional process, an agent can understand the emotional needs as well as mediate between you and the builders as well as bring is the best pricing options available in the market. Which will be difficult if you are on your own. The best thing about Myshopdeal is that we have tie-ups with all the A class builders in and around Gurgaon.
Find the right agent who exclusively represent you and not just the builder’s interest. Identify someone who understands your needs and makes you feel comfortable. As a final step, check your state's real estate licensing and their website to ensure they're registered.
4. Check for the best home loan offers by reputed banks
Some people delay the decision of buying a house as they would like to buy their first property from own funding( which is most difficult keeping the rising property prices in mind). Best bet is to buy a house with a home loan. Reason being property prices keep increasing and secondly, during the later part of life financial commitments will increase.
Before you decide to buy a house with a home loan, it is important to fix the budget and arrange at least 20% funding from own sources. Reason being banked will only lend you 80% of property cost as Home Loan. Although, some offer to finance 100% these days. Be careful to read the terms.
CIBIL Score is a must and should be checked Online to avoid any future surprises. CIBIL Score of 750 or more is must to avail home loan in India.
Know about the payment procedure. Payment patterns vary from developer to developer and in case of a resale property, the homebuyer has to pay a certain percent of the property as down payment. On the other hand, for an under-construction property, there are three types of payment plans you could pick from :
A. Time-linked where a buyer has to pay at certain intervals irrespective of the progress of construction;
B.Down payment linked where the homebuyer needs to pay a certain percentage up front and the remaining through installments; and
C. Flexi plan which is a mix of both construction-linked plan and down payment plan where the buyer pays 10 percent at the time of booking and the remaining in a fixed time span.
Many reputed builders are offering exciting payment options like the offer to refuse by M3M where you can live for 2 years and then decide to keep or refuse the property.
Insist that you need a photocopy of home loan cheques 2-3 days before registration date as the seller would like to see the cheques before registration. Inform the bank in writing /through email the date of registration. Kindly keep the gap of 7-10 days between registration & date of signing a home loan agreement.
5. Applying for pre-approved home loan
It is strongly recommended to apply for a pre-approved home loan, the reason being it is critical to know loan eligibility before finalizing the property. Loan eligibility depends on multiple factors like salary, other liabilities, repayment capacity etc. In few cases, the buyer has to call off the deal as loan approved was much lower compared to property cost.
A pre-approved loan is valid for three months and can extend to max six months. After receiving sanction letter, request the bank to provide a list of property documents required for Home Loan Disbursement.
6. Perform legal diligence
Before taking the final decision make sure that the developer or the seller has the title of the property (the right to sell). In case the property is in a housing society, know all about their occupancy certificate and safety certificates. The home-buying process would also require a legal expert to read into the agreement and also, handle other legal formalities.
7. Home insurance
It is not mandatory to get an insurance cover for your home. Although if you feel some valuables are worth covering, then you can shop around for quotations while you are still looking for a house.
Primary insurance typically covers fire, theft, storm damage and liability should someone get injured on your property and sue you. But you can also add on riders for things like expensive jewelry, furniture, and home office equipment, as well as choose to get earthquake and flood insurance where there are high possibilities.
8. Sign the Papers
Before the big day, you're entitled to a walk-through to confirm that nothing has changed since the inspection. Ask the settlement agent for copies of all the paperwork you'll sign before closing, so you can carefully review them at your leisure. n closing day, bring your photo I.D., as well as any paperwork you received throughout the home-buying process, including insurance and home inspection certificates, bank loan and guarantees.
Once the booking amount is paid, it is essential to receive an allotment letter which has all the relevant details such as flat number, size, floor and other extra charges.
A sale agreement must be signed between the developer/seller and buyer. It is a proof that makes the buyer the legal owner of the property. Recheck the deed so as to be sure about all the specifications of your home.
Once you've signed the paperwork, you'll be handed the keys… and you'll officially become a homeowner!
One essential step after you have bought the house is to register the sale deed in the local municipality and the get the property registered in your name.
9. Congratulations you are the owner of your dream home!
Finally, when you have made it so far, it is time to celebrate! Let the great moment sink in.
Myshopdeal offers complete solutions and will help you walk through the entire process beginning from viewing properties, legal, finance, paperwork to the final stage of celebrating with your loved ones. We care because your friendship means more than anything.