One of the most important decisions you will make in life is the buying of your dream home. This can be challenging and nerve-wracking. Buying a house is a crucial decision that will have an impact on the entire family’s financial future.
It is therefore essential to be rational and not get swayed by fancy sales pitches or lucrative ‘short-sighted’ deals. Here are some common house hunting mistakes you should be wary of:
Not knowing your eligibility
Even before you start looking for a house, you need to check your home loan eligibility with a reputed financial institution. After assessing your credit score and income potential, the lender will be able to offer you a ballpark estimate based on the prevailing interest rates.
Considering this loan will be 85% to 90% of the property value (after down payment), it can help you understand the type of houses and neighbourhoods you can afford.
Additional Read: Check Your Eligibility and Documents Required for Home Loan
Not sticking to a budget
Brokers will always try to upsell a more expensive option for their own commission, asking you to be a little ‘flexible’ about buying your dream home. However, you need to be very careful about how far you can go. Remember, even a slight increase of Rs 10 lakh in your budget will cost you an additional Rs 8.9 lakh as interest with a standard 9% loan for a 15-year tenure.
Always use a home loan EMI calculator and manage your budget right.
Not factoring all costs
The budget includes the down payment you can make, the home loan required, and other associated costs such as interest, processing fee, property registration charges, brokerage, insurance, etc.
Often, first-time homebuyers merely look at the price of the property without considering the other costs. Not accounting for these expenses can put you in a financially tight spot even before you start your home loan repayment.
Additional Read: First Time Home buyer? Here is your guide to your dream home
Getting tempted by offers
Offers like ‘free gold coin’, ‘waiver of stamp duty’, ‘x% cashback’, etc. advertised as ‘limited period offers’ are common these days for under-construction properties. Do not be baited by these eye-pleasing offers and commit to a deal that could be expensive for you in the long-term.
Taking too little or too much time to close a deal
Spend enough time researching every aspect of a house hunting checklist. Factors like the neighbourhood, availability of resources, maintenance cost, condition of the property, clear title and governmental permissions, etc. should be assessed.
Haste could lead to rude shocks. At the same time, going too slow can affect other parameters like escalating property cost or interest rates.
Not partnering with the right home loan financing company
A home loan is a long-term commitment. Other than affordable interest rates, you also need to look for transparency in charges, speedy disbursal and robust customer support for resolving queries. Additionally, a trusted home loan partner like Tata Capital offers a range of services such as flexible EMI options, insurance advantage, optional top-up loans, and more, so nothing comes between you and your dream home.