Guide to Home Buying

Investing a considerable amount of your savings in what would perhaps be your most prized asset, your house, can leave you with many doubts. Right from financing the purchase to selecting the builder, it encompasses numerous aspects. With Gudi Padva around the corner, booking a house may just be on your mind. Find below a five-step guide that addresses common queries, provides unique pointers and takes you through the process of home buying.

File photo
File photo

Step 1: Fixing the Budget and Checking Your Home Loan Eligibility
To start with, fix your budget. In case you wish to opt for a home loan, enquire at the bank about the amount of loan you are eligible for. Your current earnings, current age, amount of other outstanding loans and most importantly, your past credit history or CIBIL score (maintained by Credit Information Bureau (India) Ltd.) would have a significant bearing on your home loan eligibility. While banks finance 80-85% of the home value, buyers usually need to arrange for 15-20% as the down payment.

Step 2: Deciding the EMI (Equated Monthly Installment)

Home loans can be availed for a maximum tenure of 30 years. Loan borrowers often face the dilemma of selecting the suitable tenure. Longer-term loans have a lower EMI. However, longer the loan tenure, higher is the interest on the amount borrowed.
Investment experts feel that home loan borrowers should ideally opt for an EMI that is less than 40 - 45% of their total monthly earnings. They strongly advise buyers to keep a buffer for unforeseen costs that may arise during the month.
Ritesh Shah, a 25-year old Mumbaikar and a Sales Manager of a reputed multinational company said, "I started looking for a house from the first day of my career.
My dad is a financial analyst and spending years under his tutelage has taught me one thing - you need to plan for a house early in life. After all, why pay rent when you can pay EMI?"

Step 3: Answering the 3Q Self-assessment Test of Home Buying

A little planning for the future undoubtedly goes a long way, as selecting an ideal house depends on your current stage of life. Here are three questions (3Qs) that every prospective home buyer must answer:

Step 4: Getting the Right Coordinates

Daily commute (for all family members) will of course be a major factor before you zero in on a locality. Places with easy access to multiple modes of transport should be preferred. Get feedback from friends and relatives, research for future developmental plans of the area, proposed infrastructure connectivity and/or sanctioned plans of the Local Governing Body.
Neha Tripathi, a teacher and mother of two, recently purchased a 2BHK flat on Ghodbunder Road at Thane. Speaking about her choice of location, she said, "We were looking for a place that is well-connected to every part of Mumbai. We also wanted a place that had easy access to the metro rail. Thane had been on our list due to its central location. We took the final decision based on long-term prospects after the Government announced its future plans to build a metro railway line on the Ghodbunder Road."

Step 5: Taking a Pick

After short listing the area, picking the right housing project can be a daunting task if you are presented with multiple options. Experienced real estate buyers suggest novice home buyers to opt for a builder of repute with strengths like quality construction, timely delivery, financial stability and trust to its credit. Projects with wide range of amenities should be preferred, they feel.
Speaking about the preferences of home owners, a representative from Vijay Group and Suraksha Realty, a leading Thane-based real estate joint venture, stated, "We have witnessed a huge surge of demand for homes at Thane in the last few years. State-of-the-art healthcare, international schools, multiplexes and parks coupled with a speedy infrastructural development have been catalytic in influencing this trend. Our project, Orovia - The Land of Prosperity on Thane's Ghodbunder Road has been attracting a lot of buyers who seek a better quality of life."