Are you thinking about getting a second home? Maybe you’re looking for a vacation home to spend your holidays in. Or perhaps you just want an additional income source through rents.
Whatever the reason, purchasing a second home is a big deal! And although buying a second home is tremendously exciting, it comes with its own set of financial considerations. So, before you agree on an offer for a villa by the lake or a penthouse, consider asking yourself these questions.
Can you really afford a second home?
The first step towards buying a second house is to think about your finances. Did you know that a second home can be just as expensive as your primary home? Can you pay cash for the second home? If not, you will have to factor in the cost of a home loan.
The best thing to do is sit down with a lender and a realtor in the area and discuss your options. You will also need to think about monthly expenses like maintenance, electricity bills, and other utilities. The easiest way to do that is to look at your current monthly expenses.
How do you plan to use your second home?
Are you going to use the property as a second home for yourself? Or will you rent it out to cover all other associated costs? Answering these questions will help you understand where to look for properties and which type of properties to look for.
If you’re buying a second house for personal use, you can purchase whatever strikes your fancy. But if you are counting on rental income to pay the loan EMIs, you need to consider the property’s location. You can’t buy a secluded cabin in the mountains and expect potential renters to show up.
Additional Read: Guide for claiming tax benefit on your second home loan?
Are you rushing into making a decision?
As with any big purchase, you should ensure you’re not buying a second home based purely on impulse or emotion.
Consider everything, your finances, home loan interest rates, location, rent, and future expenses. You always have the flexibility of time, so whether you buy the second home this month or the next month doesn’t really make a difference.
In other words, spend a considerable amount of time researching and choosing the property that suits your needs and finances.
Additional Read: Important Things to Consider Before Buying Second Home
Will you need a loan?
If you don’t have lots of cash lying around, you may need to fund your property purchase using housing finance. For that, you may need to conduct additional research to zero-in on a suitable lender.
Don’t choose a lender simply based on the interest rates they offer. Consider other factors like home loan eligibility, tenures, and loan amount. Besides, if you already have a pending loan on your first home, you need to have enough cash flow and credit score to afford a second one. Planning your EMIs using a home loan EMI calculator is also an excellent first step.
Is your answer to the last question – yes? Well, then you’re in the right place! Avail of Tata Capital’s home loan today, and enjoy competitive interest rate, quick disbursal, and flexible tenure. Visit our website today!