Buying a house is one of the biggest accomplishments in a man’s life. This decision often comes with multiple considerations, and finance is the biggest of those. Very few people go for property hunting without first being sure about how they are going to manage their finance throughout the whole process. Even so, it is easy to fall into the trap of spending too much for the lack of adequate knowledge about the house or lack of financial education.
What should one know while buying a new house? What does a perfect balance of a financially secure as well as a ‘good’ value property look like?
While looking for a new house to buy, we are often faced with a huge number of considerations. Of which, the major ones that influence our final decision are:
Basic facilities and Maintenance
Livelihood amenities like gas, electricity, telephone and broadband connection availability reflects on the property’s value and buying price. Before you decide on a house, make sure that basic facilities like these are available.
Extra amenities like security doors, gyms and public recreation areas may also add up in the maintenance costs of your new home. Know well the costs of all the things you will be offered apart from the living space, as this will help you plan the Home Loan amount and its term.
Most people nowadays choose to take a loan for their homes even if they have savings. This is because taking up a loan and timely repayment significantly improves your CIBIL Score. It is best to pre-assess your eligibility for a loan through online platforms so that you have a better idea about funding your purchase.
If you find that another bank or a Home Loan scheme has more attractive interest rates, you can also opt for Home Loan Balance Transfer in the middle of your term to avail the additional benefits.
Insurance is one important security measure. Insurance is financial tool, which safe-guards your property against un-foreseen circumstances. It is wise to invest in a suitable House Insurance scheme, when buying a new house.
Under the RERA act, a host of new policies have come about which are mostly in favour of the property buyer. Educate yourself well before buying a new house. Consult your broker if you’re buying a second-hand house or look up the builder’s reputation in case you want a ‘new’ new house.
If you don’t understand exactly what the builder is offering, ask and take notes. There are no dumb questions. Not knowing can cost you real money.
Sometimes, apart from looking just at the cash outflow, new buyers also look out for the future prospective of the estate that they are going to invest in. The valuation of a new house, just like any asset, increases overtime. Taking property appreciation into consideration is a good practice as it helps to balance out the initial cash flow that went into buying the property.
Buying a new home, or taking a home loan, also makes you eligible to claim tax benefits.
Under section 80C, one is eligible to avail a deduction of 1.5 lakhs rupees on repayment of the initial home loan amount.
Under 80EE, if the home loan amount doesn’t exceed 25 lakhs, and the property value is 40 lakhs, you can claim tax benefits also. Educate yourself well before buying a new house.
Consult your broker if you’re buying a second- hand house or look up the builder’s reputation in case you want a ‘new’ new house.