Things to consider if you are buying a house this year

Buying a house is one of the biggest financial decisions most of us make. The very thought of investing in a house throws up many questions. Can I afford it? What would be the ideal locality? Will I get a fair deal? If the money has already been arranged, another question in your mind could be: Should I buy it right now or sometime later?

Is there a good time to buy a house?
 

An informed home buyer always considers the timing of the purchase. Periods of high inflation may not be a good time to buy as the price of assets go up. A high interest rate scenario slows down real estate sales, so you might get a desirable property at a lower rate. However, your cost of borrowing will be high. 

Apart from the economic cycle, you should also consider the real estate cycle. The real estate industry goes through periods of slowdown, wherein properties may be available at a lower price. These cycles can take more than one year to complete a loop. But if your target is buying a house in a particular calendar year, when would be a good time?

The jury is somewhat divided when it comes to the best time of the year to buy a house. Buying a home during festive seasons is considered auspicious, and developers often offer special deals to entice customers. Others suggest booking a home during the monsoon as it is the best time to test the quality of the roads, the severity of traffic jams, waterlogging in the area, green cover around the property, etc. 

Also, a recommendation for home buying is winter. Property prices tend to be lower in November-January compared to the peak time of March to June. Any seller would want to close the year strongly, so they prefer converting a prospective enquiry into a sale, even if it means offering a discount. In short, it can be a good idea if you plan on buying a house around the New Year.

How to buy a house: Home buying basics
 

Irrespective of the time of the year, astute home buying is all about getting the basics right. This New Year, here are some things you need to keep in mind when pondering how to buy a house:

· The Real estate scene: Home sales recorded a 4% increase in Q3 of 2022 compared to the previous quarter. This is a 41% increase compared to Q3 of last year. The metro cities saw an increase of 14% in new launches in Q2 of 2022, and this momentum is expected to continue in 2023 as well. However, you must also investigate the supply and demand in your preferred area as this may differ from the overall market.

· Cost of the property: Check the prevailing market rate while negotiating the cost of the property. You must also enquire about any other costs associated with the purchase. For instance, there may be separate charges for parking space. Advance annual maintenance charges are often levied, while locational preferences may attract additional charges too.

· Interest rate: With the RBI increasing interest rates throughout the year, the home loan interest component will be higher than it was a year ago. You should enquire with several home loan financers and compare the interest rates, terms and conditions, processing fees, etc. Also, check the construction quality, the reputation of the developer, connectivity to other parts of the city, the validity of documents, and so on. 

Readiness of the home buyer
 

Along with the points mentioned above, it is necessary to ensure that you are fully prepared to buy a house. A few boxes to check off are:

· Job security: A home purchase is a long-term commitment, particularly since it might involve a home loan. A steady job is crucial if you are to repay the home loan over the next 10-20 years.

· Down payment: It is always wise to pay a higher down payment so that your loan and EMI burden is low. Therefore, having sufficient money saved for a down payment is advisable.
 

· Debt burden: To prepare your finances for the home loan liability, your existing debt burden must be under control. If your existing liabilities are straining your budget, adding a home loan EMI can put you under significant financial pressure.
 

· Creditworthiness: Before applying for a home loan, ensure a good credit score as it ensures higher loan eligibility. Keep your financial track record impeccable in the months leading to the home purchase so that your credit score is high at the time of loan application.
 

In Conclusion

Arranging the necessary finance is a big part of home buying. With Home Loans of up to Rs 5 crore repayable over 30 years at attractive interest rates, IDFC FIRST Bank Home Loans can be a perfect match for you. Apart from new home loans, IDFC FIRST Bank also offers lucrative terms on the balance transfer of existing Home Loans, including a 100% top-up at the same rate of interest.

Purchasing a new home can make your New Year even more special. The digital loan process and stellar customer service from IDFC FIRST Bank make the home loan borrowing process smooth and hassle-free. 

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.