Here Are the Top 5 Golden Tips for First-Time Home Buyers in 2022

Most people make their biggest investment when they buy a home. Buying your first home is one of the most important moments of your life; it is just like going on your first date or getting your first job.

When buying your first home, you need to learn to plan your budget, choose the right type of property, think about location and amenities, check the builder’s reputation, and get a home loan. Getting a home loan and making sure you can afford it takes a lot of work.

Want to buy your first house? What are the best tips that will make the process smooth for you?

Top 5 Tips for First-Time Home Buyers in 2022

1. Manage Your Finances

First, you need to figure out how much money you have and how much you will need.

Prices for homes vary a lot depending on the type of property and its location. So, you must decide beforehand the amount of money you can spend. You might want an expensive house in a posh neighbourhood, but it might put a dent in your finances.

A home loan eligibility calculator is one way to check how much money you can borrow with a home loan and how much you will have to repay each month. For this, you should take into account all your financial obligations. Ideally, your EMIsshould not be more than 40% of your take-home pay. You can also use a home loan affordability calculator to see if you can afford a loan.

2. Decide on the Type of Property

The type of property depends on what you can afford. Think about how many family members you have, how many rooms you need, and so on. Find the best fit for your needs and your budget.

You should also think about why you want to buy a house. If you want a house to live in, think about how long you plan to stay. If you are buying a house to rent it out, it is a good idea to think about what the tenants in that location are looking for.

Based on the type of property and the purpose of the purchase, you can also avail yourself of some tax benefits. Under Section 24 of the Income Tax Act, you can claim up to ₹2 lacs on the interest paid on your home loan.

3. Think about the Location and Amenities

When buying a house, choose the right location, especially in a big city where commute times can be long. Consider where you work, how far away the schools and hospitals are from your home, how easy it is to get to public transportation, etc. Check if the neighbourhood has a proper sewage system, good road infrastructure, etc.

Because the location also dictates the property prices, you should prioritise some of these factors and pick a location that best suits your budget and needs. For example, if you use a personal vehicle, you can choose a house far away from public transport hubs. If there are no children in your family, you can choose a house with no schools nearby.

You should think about what kind of amenities you want and need. New apartment buildings and residential properties come with pools, gyms, spas, clubs, and so many more facilities. You should avoid getting swayed by all these amenities and pick only those that you need and will use. For example, if you have kids, you might want to buy a house with a play area. If you own a car, you will need a parking space. You should pick the extras carefully because they add to the total cost.

4. Choose a Builder with a Good Name

Buying a home is a big decision, so look into the builder’s background. Check their past projects to see if they were all finished on time. You can also talk to the builder’s past customers to find out about the quality of the work and whether or not what was promised was delivered. Avoid fly-by-night companies that make big promises but do not have a reliable track record. When in doubt, ready-to-move-in units are the best way to avoid problems with builders.

5. Get a Home Loan

Since buying a house is a big expense, you should consider getting a home loan. You can talk to your bank, but it is best to compare the home loan rates and features offered by several lenders.

One of the most crucial steps in buying a house is getting your home loan approved. Home loans also come with some tax benefits. As a best practice, keep the length of your home loan as short as possible. Long-term loans have very high interests that may add up over time. For example, a 25-year home loan has a total interest payment of 160%, while a 10-year home loan only has a total interest payment of 55%.

Conclusion

For someone who has never bought a house before, the process can be scary. But if you follow these tips, you can plan well and make buying your first home a memorable experience.

Piramal Finance has more in-depth articles on other such financial topics. And if you find yourself in need of urgent cash or plan on buying a house, you can check out their products and services. You are sure to find something that will meet your needs.