Diwali 2019 has finally arrived. Diwali has a special place in our culture due to various reasons. One such reason is the fact that we consider these days as few of the most auspicious days of the years. That is why a lot of people make bigger purchases by buying gold or property during Diwali. If you are also planning to buy a house on this festival season, here are things to consider before you do that.
Researching the Developer
The first and most important thing you need to do is to know the builder’s history. Check whether he/she had delivered all projects on time as well as the quality of his previous projects. It always better to be cautious when you are a first time home buyer.
Taking Help from the Lawyer
When it comes to purchasing a property, you have to go through with a lot of paperwork and it crucial for you to understand it. There are several legal terms in property-related documents, which might be tricky to understand. Therefore, taking the help of the lawyer to understand this jargon is a smart move. Your lawyer will thoroughly check all documents like 7/12 agreement, title deed etc. and you will not miss an important point.
Figuring Out the Add-Ons
While you are financially preparing to buy a property, you also need to arrange funds for various additional charges like stamp duty, house registration, etc. It is better to check them first rather than getting stressed because of these add-ons when you are in the middle of the process.
Evaluating Different Properties
It is crucial to know the total usable area in the house you are willing to buy. You must have heard about the cases, where builders did not properly explain buyers about different between carpet area and super built-up area. The carpet area is the usable area in the house. Therefore, while you are buying a home, evaluate the properties based on carpet areas.
Comparing Home Loan Rates
This is one of the foremost important things you need to consider before buying a house. A home loan is a very beneficial tool that enables you to buy your dream property. Nowadays, many lenders competing in the market, who would offer you interest rates based on various factors. Credit score, disposable income, etc. are two such factors that majorly impact the home loan rates.
However, there are ways which you can use to obtain a reasonable interest rate on home loan from lenders such as co-ownership or woman ownership. These ways will also help you to increase your home loan eligibility.
Deciding the EMI and Tenure
There is a simple relation between tenure, EMI and total payable interest. The more the tenure, the lesser will be EMIs and more will be the total payable interest.
For Example, for a home loan of Rs. 60 lakhs at the interest rate of 10%,
|Tenure in years||EMI||Total Payable Interest|
|10||Rs. 79,290||Rs. 35,14,853|
|15||Rs. 64, 476||Rs. 56,05,735|
|20||Rs. 57,901||Rs. 78,96,312|
As you can see, the total payable interest and tenure both increase simultaneously. Though decreasing tenure costs you lesser interest, this is not always a smart move. If the EMI consumes more than half of your income, it becomes very stressful to carry out daily expenses. With longer tenure, the EMI is less and repaying home loans does not become stressful to you. Therefore, the smart move is selecting tenure as per your financial capacity.
Lastly, Diwali is surely a great time to buy a home because many builders take advantage of this time and promote various offers like cutting prices or giving the option of not paying the EMI for the first two years or give a car, etc.