As the saying goes, assets never lose value, rather they are passed on to generations. However, buying a home requires thorough and careful planning, in terms of current and probable future financial situation, existing commitments, eligibility, EMIs, etc.
Thankfully, the indian real estate is seeing gradual signs of revival post-implementation of key policy reforms. With property prices crumbling in major cities, developers have now realigned their priorities on construction and completing detained projects. Moreover, banks have evolved over the last few years and so have their policies. Most banks these days even offer loans with little to no prepayment penalties, which means any home loan borrower can repay their loan ahead of time without requiring to pay any additional fees. With rising income levels and better employment opportunities in our country, homebuyers are now able to invest in their dream home at a much younger age.
The Indian tax department offers plenty of tax benefits on home loans. Section 24 allows homeowners to avail a deduction of up to Rs 2 Lakh on interest payments, provided that they reside in the said house. Section 80C of the Income Tax Act offers a deduction on principal repayment of up to Rs 1.5 Lakh.
Huge savings are not required
When it comes to saving in terms of purchasing a house, it is better to buy a ready-to-move-in home, as you can save on GST, as well as EMIs. If you have the ready money, it makes sense to put it down at one shot and not go through the whole hassle of taking a loan – or take a minimum loan that is easy to repay. That ways you end up paying less for your investment.
Buy a house suitable to your budget
Go one step at a time. If budget is a problem, work on the dream house in a series of steps. Builders are willing to offer great schemes – be smart and look for genuine schemes.
The house that is desired could be out of budget, however, it is better to first settle for an affordable home in case enough resources are not available for the purchase. Besides, banks are also now providing home furnishing loans as a top-up which eases the burden of planning home interiors.
Key rules for first-time buyers
- If you are buying for end-use, select a convenient location – near schools and offices. Make sure the area is well developed in terms of infrastructure. Check about the safety aspect too. If you are buying for investment, make sure that the area is in an upcoming location and has scope for price appreciation.
- Always check the track record of the developer. Look for the latest newspaper articles online about the developer to see if they are reliable.
- Check for legally clean titles. Get your documents verified by a lawyer. Ensure no double selling takes place or you could lose your property.
Invest in EMIs rather than rent
While the demand for rental properties is growing these days, the rent rates are also increasing rapidly. Also, the maintenance cost makes it worse. Hence, for a person willing to pay thousands a month just on rent, a few extra for their own home wouldn’t feel very far-fetched.
Purchase at a young age
It is always better to buy a home at a young age. The sooner a person invests in a property, the faster they can payback. Also, at a younger age, one gets the option to choose a long period, which reduces the monthly EMI burden.
This article is contributed by Karishmah Singh – Vice President – Sales, Marketing and CRM, Salarpuria Sattva.
(The views expressed here are solely those of the author and do not necessarily represent or reflect the views of RoofandFloor)