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Home Buying Process- Selecting a Good Property and Managing Finances


Every individual dreams to own a home; however, purchasing a home is not a child’s play. When you plan to buy a property, you must go through the different stages of selecting the location, bargaining a deal, arranging for finances and much more.

But, if you chart out your plan well, you can eliminate all the hassles and confusion and ease the home buying process. Here are the two primary aspects of home buying – selecting a good property, and managing the finances – that you should focus on to make the home buying process smoother.

Finding the Right Property
A good property cannot be defined, as every individual has a different preference depending on his/her needs. For a young individual, the best place to buy a house could be near his corporate complex. A family with kids can ask for the house near the school. One can even be looking for a property in the outskirts of the city. The need for big or small house depends on the family size and personal preference. With work-from-home being the new normal, lot of people are looking for properties with separate space for a home office. Decision for ready-to-move-in or under construction property depends on the immediate and future needs of a person.

Finding a Good Real Estate Agent

Apart from getting you a property of your choice, a real estate agent through his experience, and market knowledge will even have an idea about the neighbourhood, available amenities, proximity to nearby locations, and transportation facilities. As a matter of fact, a good real estate agent might even help you in bargaining a good deal.

Some of the means to find a good real estate agent would include market study about the agents, visiting some property portals, check ratings of the agents on the internet, reference from your known.

Managing Funds
It is often seen that people end up spending all their savings while buying a property. One should always remember that buying a home should not dilute all your savings. You should always maintain an emergency fund for any unanticipated situations. As a residential property is a non-liquid asset, it is not a cakewalk to sell off the same and pull money out of it.

Similarly, it is not recommended to take a huge loan at a hefty EMI. A good home should fit into your budget. There are after-costs which are always associated with the property including construction cost, interiors, regular maintenance, etc. You should take a loan in a manner that paying instalment does not hamper your monthly budget.

Preparing a Budget

Based on the earning capacity, savings, availability of liquid assets, future earning and expenses, one should prepare a budget to decide the ratio between self-funding and borrowings. 

Once you have decided on the borrowing amount, the next step will be, to decide on the financial institution which would walk with you towards achieving your dream home.

Before finalising a financial institution, you should look at various factors such as customer centricity, turnaround time, rate of interest, market presence, transparency, digital convenience, home service, minimum documentation, ease of processing, etc.

Getting a Home Loan Approval

Ensure the following parameters to get a home loan for buying your dream property

  • Maintain a good credit score. Credit score can be defined as a report of all the loans availed and their performance throughout;

  • Finalised property should not have major legal and technical deviations;

  • Your income should be supportive of the loan requirement. You can add your spouse’s income to increase the loan eligibility levels, if required, by making him/her as a co-borrower to the loan structure.