Essential Guide for First Time Home Buyers in India- Kotak Bank

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06 AUGUST, 2019

Being a homeowner gives you a feeling of accomplishment. A house is not just a building made of bricks and cement, but it is your own place in this world. Many people start dreaming about purchasing a home as soon as they get their first job. People dream about thousands of ideas to decorate their home with interior designs, aesthetics, furniture and what not!
You too must have a lot of ideas about things to do with your new home after buying it. Among other things, you would also be considering the process you have to go through to buy your first property. Purchasing a home requires preparation from the buyer’s end. To get you started on the essentials, this is a home buyer’s guide for first-time homebuyers, which will enhance your knowledge about the process of buying a house.
Starting from the basic (and obvious),

The financial preparation

A home is a long-term financial investment due to its high prices. Purchasing a residence can be anything but a hasty decision. Therefore, the best way to get a head start to buy a home is by laying out your finances and preparing for the journey that lays ahead. Ask yourself, are you ready for a financial commitment? Would you be utilizing savings, or considering getting a home loan? For a home buyer, balancing financial security versus gaining inroads into investing in real estate, is one of the main points to deliberate.

Employment status

Your employment status reflects stability of income. For a long-term financial commitment, like the purchase of a property, your employment status should be deemed stable, especially if you are considering applying to a bank for a home loan. Steady income also enables you to properly manage your finances throughout the journey of buying a home.
Furthermore, if you are willing to avail a home loan, your employment status is crucial. Home loan lenders require an individual to be financially stable to approve their applications. Your earnings directly influence the amount of funds provided by the bank as a home loan. Stable employment status and regular income are key factors to look out for, to get the desired amount as a home loan from most banks.

Managing your finances

In today’s world, rarely will you find properties for purchase unaccompanied by big fat price tags. Thus, you either need to gather enough funds to make an out-right purchase or avail a home loan with EMIs. Nowadays, obtaining a home-loan has become more straightforward and accessible than it was a decade ago. Lenders give quick home loan approvals to eligible individuals. If you want to understand more about your eligibilty and how it affects your loan tenure, there are home loan eligibility calculators to help you out.
Once you are equipped with knowing your eligibility and have fixed your budget, the first phase of the journey ends kickstarting Phase II - Preparations to get a home loan.

Self-assessing your lifestyle

A home loan is almost always the most significant part of a financial commitment you will make to buy a property. To make the entire journey financially hassle-free, you need to be realistic about your lifestyle. Consider your spending habits and other allied monthly expenses. You will also want to narrow down your preference based on city and locality. Your choices will tend to be related to amenities offered, schools and colleges in the vicinity and rental rates. While many homebuyers definitely hone down on their preferences during this time, it is also always good to consider the resale value of your future home. Investing in a property shouldn’t just be driven by budget, but also by estimating property value escalations.

The down-payments

Another essential part of home buying is your down-payment. The amount of down payment(s) depends on the cost of the house. More the down payment; the lesser will be your monthly loan instalments. Deciding the down payment gives a clear idea about how much money you need to borrow from the bank.

Documentation

Along with the essential documents like identification proof and address proof, you need to submit a specific set of documents based on whether you are a salaried employee or independent business person.

Approval of a home loan

The application process to get a home loan ends after the submission of documents. Once you submit the appropriate documents, different formalities are done by the bank. These formalities include checking the authenticity of documents and credentials provided by the applicant. You receive a letter confirming approval and amount of the home loan.
Aside from these, you will also need to account for additional expenses like stamp duty and registration costs as well as tax implications, when choosing the right home. Buying a property takes effort and time, and with the right approach, you can make it as hassle-free as possible.

Essential Home Buyer’s Guide

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