Site icon Homesfy.in – A complete guide to buy your dream home!

First Time Home Buyers Guide 2024

Ketaki Lele
First Time Home Buyer

First time home buyer guide 2024

Owning a house is no longer a retirement dream. According to some realtors, the average age of first time home buyers in 2022 was between 33 and 36 years old, with one out of every three homes sold going to this demographic. Additionally, as per the reports, nearly 65% of an Indian investor’s wealth is allocated towards purchasing a house. Under various sections of the Income Tax law in India, first time home buyers can get tax deductions amounting to ₹5 Lakhs in a financial year. Therefore, owning a home is a secure and beneficial investment choice.

When buying a home for the first time, correct approach is important. Starting with defining your exact requirements, assessing your finances, conducting a thorough property search, and ensuring a safe and secure transaction. With this comprehensive guide for first time home buyers in India, you’ll gain the confidence and knowledge to navigate the home-buying process easily and make the right decisions for your future.

Know This Before You Decide To Buy A Home

Buying a home can be an excellent real estate investment. Breaking down your big-picture homeownership goals will point you in the right direction.

How’s Your Financial Health?

Conducting a thorough financial audit before browsing through online listings or getting too excited about your dream home is important. This audit will help you determine if you are financially prepared for the purchase and the ongoing expenses of owning a home.

Check Savings

Before you dive into homeownership dreams, let’s talk savings! It’s advisable to have an emergency fund, your financial safety net, covering 3-6 months of EMI payments. But wait, there’s more! Upfront costs like down payments and closing fees. Ensure you’ve got cash set aside for these big-ticket items. So, before you start envisioning that dream home, secure your finances. It’s the key to peace of mind when you finally unlock the door to your new abode.

Keep Savings Safe

When saving money, finding a safe investment that provides a return to keep up with inflation can be challenging.  For goals of one to three years, a Certificate of Deposit, popularly known as fixed deposits or a short-term bond/fixed-income portfolio, are good options. A high-yield savings account is best for saving money for six months to a year.

Add Up Expenses

It’s important to have a clear understanding of your monthly expenses and where your money is being spent. This will help you determine the amount you can allocate toward your mortgage payments. It’s crucial to consider all your expenses, including utilities, food, car maintenance and payments, student loans, clothing, children’s activities, entertainment, retirement savings, regular savings, and any other miscellaneous expenses.

What You Want?

Have a clear understanding of ‘your dream home’ before buying a home. Buying a home without defining your requirements can result in incorrect decisions and a significant loss of time and money. Therefore, consider the following points while defining your requirements:

Type of Property

Villas, bungalows, penthouses, and apartment buildings are popular among home buyers in India. Choosing the right property type is crucial as it helps you determine your budget and consider other essential factors involved in home buying. When selecting a home type, it is critical to be upfront about your financial capacity and choose an option accordingly.

Size & Configuration

Home size and configuration depend on family needs. Larger apartments offer more privacy and flexibility. Joint families should go for 2-3 BHK, while 1-2 BHK units suffice for singles or couples. It’s all a matter of personal preference.

Amenities

Amenities are extra facilities provided to enhance living comfort. It is recommended to consider two factors while selecting amenities- affordability and personal preferences. Unnecessary amenities can increase the cost, so it’s best to avoid them. When comparing real estate projects, focus only on necessary amenities. Don’t pay for amenities that you don’t use.

Nearby Infrastructure

Proximity to social infrastructure is crucial when buying a home. Accessibility to healthcare, education, and retail outlets determines convenience of living. Prioritize the facility that is most important to you. For instance, prioritize locations near employment hubs if you are a working couple. If you have a family, prioritize properties near schools and healthcare services. Evaluate your needs and make an informed decision.

Possession

When buying a new home, you have two options: a ready-to-move-in or under-construction property.

To avoid rental expenses, you can opt for ready-to-move properties. On the other hand, if you need time to prepare for the financial demands of buying a new home, you can go for the under-construction properties. Both options come with pros and cons.

Ready To Move In

Under-Construction

Know All The Costs Involved

As first time home buyers, it is crucial to have a comprehensive understanding of all the expenses involved in purchasing a home to ensure that you can establish an appropriate budget. Here are the costs associated with buying a house:

Home Loan Eligibility

Understanding Home Loan eligibility is crucial in your financial planning for first time home buyers. Banks have set certain eligibility criteria to ensure your ability to repay the loan. Generally, banks lend an amount equivalent to 40-50 times your monthly income for a home loan. To determine the exact applicable home loan amount, it’s best to check the Home Loan eligibility criteria. 

The EMI amount depends on two primary factors- the home loan amount and loan tenure. A longer loan tenure means lower EMI amounts. The maximum loan tenure for a home loan is 30 years. To calculate the applicable EMIs, you can use the home loan EMI calculator. 

It’s important to note that your EMI should be at most 40% of your monthly income. This is a helpful tip to keep in mind while planning your finances.

Government Schemes and Tax Concessions

As first time home buyers, you become eligible for government schemes and tax concessions that can help you save a significant amount of money. It is essential to know about these schemes and plan your budget accordingly.

One such scheme is the Pradhan Mantri Awas Yojana (PMAY), which offers a concession on the home loan amount through the PMAY Credit Linked Subsidy Scheme. To learn more about the eligibility criteria and application process, you can read the complete article on PMAY.

Additionally, the government provides significant relief to first-time property buyers. Under Section 80C, first-time homebuyers in India can get a concession of up to ₹1.5 lakhs on the principal portion of the Equated Monthly Installment (EMI). You can also save up to ₹2 lakhs on the interest component of the EMI applicable under Section 26.

The government has taken initiatives to increase the affordability factor in buying a new home. Therefore, homebuyers benefit from low interest rates, tax concessions, and reduced stamp duty charges. All of this makes the year 2024 more suitable for homebuyers.

Right Medium For Information

Whether you are first time home buyers or not, look for platforms that simplify the process of viewing, comparing, and buying properties online. For accurate and up-to-date information to make informed decisions, use an online real estate portal. Choose platforms that provide accurate information and guidance with a no-brokerage policy to avoid extra fees.

Right Location

When buying a house, picking the right location is crucial. Two important factors to consider are real estate and quality of life. Factors contributing to quality of life include access to healthcare, education, proximity to work, less pollution, and green spaces. In major Indian cities, residents prefer locations with open areas, good air quality, and proximity to employment hubs.

Important real estate factors to consider when selecting a locality are property price trends, future development opportunities, infrastructure projects, government policies, and commercial development. India’s best real estate locations balance quality of life and real estate factors. Once you finalize a location, compare and shortlist real estate projects available to narrow your search.

Right Real Estate Developer

Whether or not first time home buyers, choosing the right builder is crucial. List of parameters that you should consider when selecting a builder:

To compare and shortlist real estate projects, check the following parameters:

After the comparative analysis, verify the property’s quality and legal documentation and perform necessary inspections.

Legal Documentations

The Real Estate Regulation Authority (RERA) is the governing body that safeguards the interests of home buyers. RERA has made it mandatory for developers to provide all documents and details to property buyers for checking and verification.

Before buying a new flat, it is important to check the following documents:

Understand The Buying Process

As a first time home buyer in India, it is important to understand the complete process involved in buying a property. This will help you streamline the buying process and make informed decisions at every stage. The process for buying under-construction and ready-to-move-in projects varies slightly.

Buying process for under-construction projects:

Buying process for ready-to-move-in projects:

Exit mobile version