Purchasing a home can be an exciting as well as nerve-wracking experience. After all, it is one of the biggest financial decisions that you will make in your lifetime. While investing in a home, even minor mistakes can have huge financial ramifications. That is why you need to be well informed and aware of every aspect of home buying.
At Ashwin Sheth Group, we understand your dream of owning a home. However, to accomplish this dream, homebuyers at times take measures that put immense pressure on their personal finances.
We have made a list of some mistakes that homebuyers should avoid while buying a home.
- Not estimating the actual cost of the house
While buying a home, homebuyers often make the big mistake of considering the advertised rate as the final rate of the property. However, the final rate of the property may include several expenses like processing fees, documentation charges, valuation fees, and more. These expenses can constitute a big amount that can derail your entire financial planning.
Therefore, when you plan to buy a home, be aware of associated charges that would help you estimate the total cost.
- Booking a house without checking loan eligibility
Some homebuyers believe that they can apply for any loan amount to buy a house and the bank will approve the application and disburse the fund within days. This is not true. Banks grant you a housing loan, depending on your loan eligibility. Before buying a house on loan, always check your borrowing capacity and find the property that fits your budget without jeopardising your finances.
- Not keeping the down payment ready
When buying a home on loan, you will need to pay a down payment to the bank, which may range around 10% to 25% of the value of the property. For example, if you are buying a house valued at Rs 50 lakh, the down payment that needs to be paid should be between Rs 5 lakh to Rs 12.5 lakh. Therefore, it’s better to create money for the down payment and taxes.
- Not considering future expenses
If you think that you just need to pay the EMIs on your home loan after buying a property, you will be wrong. There are other future expenses that you will have to bear, such as fixed maintenance fees and property tax, among others.
- Avoid a resale house
A resale home is considered a safe investment by many, but one must consider the cost of repairs depending on the property’s age. Maintenance charges are much higher in resale houses, taking a big chunk off your budget. Therefore, it is best to invest in a new house from a reputed developer.
When it comes to buying a home, a small mistake will cost you a lot. The home buying process comes with certain complexities, especially for first-time homebuyers. Therefore, do all the needful research and financial planning to buy your dream home.