Buying a home is often considered a major milestone in one's life. It is a profound and transformative experience. In a country like India marked by diverse landscapes, vibrant cultures and a dynamic real estate market, the process of acquiring a home demands careful consideration and strategic planning. Whether you're a first-time homebuyer or a seasoned investor, the quest for the perfect abode involves navigating through a myriad of choices, legalities, and financial considerations.
It’s also a huge financial decision and therefore can seem daunting to many. However, with careful planning and keeping certain things in mind, one can easily accomplish this goal. In this article, we have looked at the key things to consider when buying a home in India as well as how to plan buying a house.
1. Begin with Budgeting
The first and most important step in the home-buying process is budgeting. Before deciding to buy a house, do a thorough assessment of your finances and figure out how much money you can spend on buying a house, renovating or decorating it and maintaining it over the years. Pay attention to all your financial commitments and make sure you are going within your means when buying a home. It is always advisable to have ample savings before taking the plunge on buying a home. You can use an EMI calculator tool to ascertain that you remain within your budget as this tool will give you a fair idea of what the outgoing amount will be every month. To this, you can then add your monthly expenditure and factor in the emergency fund to arrive at a home loan amount that you will be comfortable with.
2. Choose the Location with Care
It’s not just about the quality of your home, but also its location. Before finalising an area or locality you want to live in, consider the amenities you and your family need. For instance, if you have growing children in your family, it is advisable to live in areas that house the top schools in the city. Or, if you are a working professional, then consider areas that have good connectivity to key business hubs and the rest of the city. It is also important to consider the purpose of your home before choosing a locality. If you are looking to invest in real estate, choose a locality that will stay in demand and improve the resale value of your home.
3. Study the Housing Market
Before diving in and buying a home, it is a good idea to take stock of the present housing market. This means that you should consider the real estate forecasts for the city and locality you want to live in, which can help you make an informed decision about your home. Keeping up with real estate forecasts will help you identify cities and areas that are in or will be in demand due to low rent rates or upcoming infrastructure projects. You can also consider consulting with developers and real estate industry experts before deciding on a home to buy.
4. Check your CIBIL Score for Home Loan Eligibility
If you intend to take out a home loan to purchase a home in India, you should first ensure that you are in good financial standing. Your home loan eligibility as well as your ability to get a reasonable interest rate depends largely on your CIBIL score. This 3-digit score is a numeric summary of your credit based on your borrowing and repayment history. If you pay your credit card bills, repay loans on time, and don’t default on debts, you are likely to have a higher CIBIL score. You can improve your CIBIL score by taking charge of your finances ensuring timely payments and using your credit wisely.
5. Save For EMIs And Down Payments
It’s a good idea to start saving up for the down payment of your home, much before you secure a home loan for said home. The Reserve Bank of India (RBI) mandates that lenders can only provide 80% of the property value as a home loan, which means that homebuyers still need to pay 20% of the cost of the home as a down payment themselves. Additionally, do factor in the costs such as additional charges levied by the developer, plus costs towards interiors. By planning for this down payment and saving up early on, you can keep any financial stress at bay and make the home-buying process much smoother. If you need to figure out how much EMI you will have to pay on your home loan, make your life easier by using Lodha’s seamless Home Loan EMI calculator. With only a few simple bits of information, you can use the calculator to financially plan for your new home.
6. Take Your Time To Find The Right Home
With so many home options out there in the market, it can be hard to narrow down the right one for you. On the other hand, many people get stuck living in poor-quality homes or working with sub-par developers because they chose the first house that they saw without considering other options. Some people are also unwilling to make compromises, which in turn compromises their ability to find a good home. This is why it is a good idea to take your time to research the Grade A developers to ensure that the home you are buying is built to a high standard and quality. It also helps to have a checklist of the non-negotiable things that you need for your home, such as outdoor space for your little ones to play or a deck. Also, factor in your future needs as a family and the lifestyle you envision having. Choosing a home is also about being with a like-minded community that will enable you to grow in life.
7. Choose a Grade A developer
With Grade A developers you can rest assured that the home you are buying is legally compliant and is built with the highest quality standards. Owing to their scale and experience, Grade A developers also have in-house expertise and collaborate with the best names in the industry to develop world-class projects that provide the finest lifestyle. Apart from the latest amenities, they also ensure the highest standard of quality construction using the latest technology and ensure the project is sustainably built. Moreover, they also provide a seamless customer experience through the home buying journey - with robust customer service, information at your fingertips, support with loans & registrations as well as engagement beyond possession that ensures you have a great experience.
Why Is Now A Good Time To Invest In A New Home?
According to IMARC Group, the Indian real estate market is expected to exhibit a growth rate (CAGR) of 9.2% during 2023-2028. It's no secret that the real estate industry has changed dramatically over the last decade. Eco-friendly architecture, landscape planning, gated communities, upgraded facilities, lower mortgage rates, tax benefits, increased transparency and government aid for low-income people are some of the developments in the real estate market that will continue to pent-up demand for properties. As a result, the real estate industry is expected to grow rapidly in 2023.
Factors to Gauge the Right Moment for Home Buying
Several factors can contribute to making it the right time to buy a home. While individual circumstances vary, here are key considerations that may indicate favourable conditions for homebuying:
Low Interest Rates
When interest rates are low, borrowing costs are reduced, making homeownership more affordable. Favorable interest rates can lead to lower monthly mortgage payments and long-term savings.
Stable or Growing Real Estate Market
In a stable or growing real estate market, property values are less likely to experience sharp declines. Consider buying when the market is on an upward trend or shows signs of stability.
Favorable Economic Conditions
Positive economic conditions, including low unemployment rates and steady job growth, can contribute to increased consumer confidence. This confidence often translates to a more robust real estate market.
Availability of Government Incentives
Government incentives, such as tax credits, subsidies, or first-time homebuyer programs, can make homeownership more financially attractive. Stay informed about any applicable incentives in your region.
Personal Financial Stability
A secure financial position, including a stable job, emergency savings, and manageable debt, indicates that you may be well-positioned for homeownership. Assess your financial stability before making a decision.
Long-Term Stay in the Area
If you plan to stay in a particular area for an extended period, buying a home can offer stability and potential long-term value appreciation. Consider your plans and whether homeownership aligns with them.
Increased Negotiation Power
In a buyer's market, where there is more inventory than demand, buyers often have increased negotiation power. This may lead to more favourable terms, including lower purchase prices or additional concessions from sellers.
Potential Tax Benefits
Homeownership can bring potential tax benefits, such as deductions on mortgage interest payments and property taxes. Consult with tax professionals to understand how these benefits apply to your situation.
Life Milestones and Family Planning
Major life milestones, such as starting a family or reaching a certain career stage, may signal that you are ready for the stability and space that homeownership provides.
Frequently Asked Questions
1. Is it a good idea to invest in real estate in India?
Real estate in India is thriving, with CRISIL estimating that the industry can grow to 65 crores by 2024, and contribute 13% of India’s GDP by 2025. Homebuyers looking to invest in real estate are encouraged to do so as housing sales across India’s top cities are expected to rise as well.
2. How much do I need to save before buying a home in India?
You can find homes in every price range in India, it is up to you to decide the kind of home you wish to purchase. To know how much money you need to save to buy a home, you should first go through your finances and figure out how much you can afford to spend on a home. Lodha offers homes across price points and locations, you can click here to find a home that meets your needs.
3. Will I get a home loan if I earn 30,000 rupees a month?
Lenders do not consider borrowers’ in-hand salaries when deciding if they are eligible for a loan. Home loan eligibility depends on the borrower’s CIBIL score and their ability to be financially responsible. No matter what your income is, you can get a loan if you have a higher CIBIL score.
4. Can foreign nationals buy homes in India?
Foreign nationals of non-Indian origin residing outside of India cannot purchase any immovable property in India unless it is acquired as an inheritance from an Indian resident.
5. How tough is it to purchase a home in India?
The Real Estate industry, like every other industry, has transformed over the years. Today, it is far more organised and professional than ever before. Additionally, regulations like RERA have ensured accountability and transparency in the sector, making your investments safe. Therefore, based on your financial ability, it is relatively seamless and easy to buy a home in India from top Grade A developers in the country.
6. Is location important when purchasing a home?
Yes, it is significant. A good location is critical because you will be living there for an extended period. When purchasing a home, you should select an area that has a strong future scope and development along with the resale value. Find a location with good amenities and infrastructure. For instance, if the house is close to stations, highways, schools, hospitals, and other important stores, it has a high value.
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