Things to Keep in Mind Before Buying a Home

Published: August 19, 2010
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Of all the dreams that a person dreams in his lifetime, the most desired is the one for owning a house. It is much more than just a real estate purchase or an investment opportunity. Every individual aspires to have a private space that he can call as home. People spend lots of time and money in making this dream of theirs come true. However, it is advisable to give proper thought and planning before making a decision to buy a new home. After all, we buy a home just once.

When you opt for a property, you should also consider the amenities like space, neighbourhood, transport, proximity to schools, hospitals, markets etc. Visit the site and cross verify that the actual amenities are in compliance with what is mentioned in the advert. Make sure the basic infrastructure like water, electricity etc. are in place. Try to find valued add-ons that will further save you on cost, e.g. a furnished plot or automatic admission in the township.

An important point to consider is that if the property to be bought is a part of some registered society. You should check the society norms for selling or renting out the property, parking space etc.

Proper verification of documents like solicitor’s title report, title certificate, Municipal Corporation approvals, No Objection Certificates, terms and conditions, relevant title certificate, IOD, CC list, copy of plan etc., is mandatory. Make sure that the agreement of sale is drafted as per the state’s Municipal Corporation.

Keep you eyes open for any hidden costs and document the entire transaction. The total actual cost should be calculated by including stamp duty, registration charges etc.

Always keep a margin of few months, in case the possession gets delayed. It is a good idea if you already are staying at a rented place. To ensure good quality, service and possession on time; go for a developer that has carved out a niche in the real estate market. Some with a well established reputation in the market. Also, get the property checked by a lawyer and engineer to avoid any legal hassles at a later point of time.

The selection of the perfect home loan provider should be done after a thorough market research. Go for the one that offers best cost, prepayments, interest rates etc. Before zeroing on the loan amount, consider your savings and your income. Don’t spend more than you can afford.

Craft a proper financial plan that would help you save enough and spend wisely. A home loan will be a huge fiscal responsibility and its better to get rid of it as soon as possible. So it would be a better idea to clear off your other debts before opting for a home loan. Assess your expenditures properly, prioritize them and save prudently. The more you save, the bigger is your down payment and repayment will be easier. Any major financial decisions, e.g., buying a car etc., should be kept on hold till the time you completely repay your loan.

Some terms related with housing finance:

EMI: EMI means Equated Monthly Installment. This is the installment payable to the housing finance company and remains constant over the tenure of the loan. The EMI you pay depends upon the rate of interest, the tenure of the loan and the amount of loan you take. For example, when ICICI Home Finance says EMI of Rs 982 per lac for a 20 year Home Loan, it means that if you take a loan of Rs 1 lac for 20 years at the existing rate of 10.25% you will have to pay Rs 982 every month for the next 20 years.

LTV: LTV stands for Loan To Value ratio. It signifies the loan amount that a person is eligible for a Home Loan on the total cost of property. So an LTV of 85% means that you can get a loan of maximum of up to 85% of the value of the property.

FOIR: FOIR is Fixed Income Obligation Ratio. It is used to calculate your eligibility in terms of the EMI, in which the housing finance institution takes into account all the fixed obligations that you pay every month like of all the loans previously availed before you take your Home Loan and arrive upon the maximum EMI that you can pay. The loan amount you get is derived on the basis of the EMI that you can pay. It is usually expressed as a percentage.

With inputs from ICICI Bank Home Loan and Property Buying Tips


Posted under categories: Buying Property
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About Zamanzar

Zamanzar Advisory Pvt. Ltd. is a real estate advisory firm located in New Delhi, India. We offer online property search tools and offline services to help complete the transaction. Our services cater to real estate buyers, renters, and sellers. Visit Zamanzar to find out more!

26 Comments so far

  1. kumar b September 23, 2010 12:28 pm

    installment payable to the housing finance company and remains constant over the tenure of the loan

  2. Newport Realty September 27, 2010 11:14 am

    The way in which each small point is mentioned with so much clarity is really good. Each point mentioned is equally important and should be complied with.

  3. Sumaiyaa November 12, 2010 4:29 pm

    your point wise description is very good skill. Keep Updating

  4. Prestige February 17, 2011 1:05 pm

    It is nice and useful. And before buying any property, we should have knowledge about the developers.

  5. jhon mathew May 1, 2011 11:38 am

    yeah i also agree for the above statements,before making a decision to buy a home,we have to get information about the developers.

  6. dinesh kumar June 30, 2011 12:04 pm

    i have paid about 80% of flat cost, now Builder send a notice that super built area has been increase (about 20%) and u have to pay Rs 4 lakh. what should i do?

  7. Classifides July 4, 2011 3:23 pm

    This is good blog. And it is more informative. These are the good steps for the use to Things to Keep in Mind Before Buying a Home. These are the good for the buyer to keep the in mind before buying home…
    —————–
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  8. Property Investment Gujarat July 11, 2011 7:31 pm

    Be sure to know about property tax information. and the most important is that Ask for utility bills.Anyway, I like this post which is very useful for Consumers.

  9. atOnePlace July 15, 2011 12:36 pm

    Interesting post and thanks for sharing. Some things in here I have not thought about before.Thanks for making such a cool post which is really very well written.will be referring a lot of friends about this.Keep blogging about indian real estate

  10. tec homes July 16, 2011 12:43 pm

    Nice Information.Can i have sample

  11. Vijay August 24, 2011 4:18 pm

    The article is very helpful for all the people related to real estate.One can understand the market and gain knowledge….

  12. Buy Property in India December 2, 2011 2:54 pm

    Very Nice. I truely agree with your article because for many people, buying a first home brings a sense of belongingness, pride and freedom that cannot be matched by renting. So there are many things that one should consider before buying a home.

  13. sunworldarista December 20, 2011 6:11 pm

    Really a nice content. Thanx for sharing this.Sunworld Arista Noida - Sunworld Arista offers luxurious apartments, studio flats at Noida Sector 168, Noida Expressway

  14. Council Tax Band December 23, 2011 3:25 pm

    I think you have correctly mentioned the fact that people need to consider before buying a home. A proper research and plan will help you [to avoid any future problem.

  15. ivan larco December 30, 2011 11:03 am

    Hello,
    Thank you so much for sharing such important information to share with us. I like the post. Yes it is very important to know all the aspect before buying any property.

  16. R.Rajaram January 4, 2012 1:01 pm

    Though somebody said that the EMI is the same during the entire tenure, is correct. But during the initial period upto 3 years the Interest portion is more and the Principal portion is very less out of the EMIs paid. Only after 6-7 years out of the tenure of 10 years, the Principal portion will be more and the interest portiion is very less.

    The bankers, cover up most of their interest charges at the initial stages of the tenure fearing that the customer might close the HL early completely.

    Best regards,

    Rajaram

  17. property management company January 4, 2012 2:35 pm

    Yes, these things are very important when we buy a new home.Your Post are very nice and helpful for buyer.

  18. real estate india April 16, 2012 12:17 pm

    very nice & helpful article for those who wants to buy any property. i found new tips here which i implemented when i bought new home. really very helpful to me.

  19. dinesh July 3, 2012 2:20 pm

    Before buying a home every person should take care about all things related to the property. You described all those in a well manner. It will surely help people who looking for purchasing a property.

  20. Gayatri S September 27, 2012 12:51 pm

    While applying for a home loan make sure to have a longer tenure of repayment. Even if you default on paying the EMI, the penalties will not be very high.

  21. Agra Real Estate September 29, 2012 1:10 pm

    Thanks Mohsin,I appreciate your post.I am very thankful that you have tell peolple tips and things before buying home.After reading your post people will definitely thinks what you have said,before buying home.cotinue writing such wayful post.

  22. Harris October 5, 2012 6:13 pm

    nice tips before buy a property..
    thanks alot…

  23. Aakanksha November 16, 2012 4:25 pm

    This is very useful information; everyone wants a piece of land. It’s the only sure investment. Land wills double its value in ten years. In less than that. Land is going up every day. Those who fully understand the intricacies of creative real estate investing continue to participate and profit.

  24. Mahagun Mywoods December 1, 2012 3:56 pm

    Thanks for great post and good information about the terms you have mentioned here.

  25. Ramakrishna January 28, 2013 10:23 am

    You are right above are the good locations to invest money. Thank you for your suggestions.

  26. Archit Chawla May 7, 2013 4:25 pm

    Indeed a very informative and knowledgeable article. We all generally don’t give attention to such small intricacies involved and generally end up getting conned in one way or the other (hidden costs etc). Thanks for sharing these!

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