A House is the most expensive purchase for middle-class Indians. While earlier, most families waited for years to buy their house, the relaxed home loan policies by the Indian Government have eliminated that long waiting period. Like any big project, buying a home requires a proper plan and getting the details right. And, most importantly, you need to spend your money rationally. Sometimes, ignoring a few smart strategies can result in overspending money on your property. In this write-up, we have shared a few money-saving strategies for first-time home buyers.
1) Make a budget
Before buying a property on the whim of its classy features and attractive outlook, you should plan how much you are ready to spend on your home. You must have enough savings to pay the down payment and your monthly income should be good enough to pay the EMIs. You must analyze your family’s income and expenses closely before taking a home loan. Also, remain prepared for worst financial situations like a job loss. Remember, your home loan should not become a bad debt.
2) Avoid bidding wars
Buying a house in auctions is a great idea as many times, you can find a good deal. But you should not act irrationally to win a bidding war. Otherwise, you can end up spending more than you want. Therefore, before participating in a property auction, you should decide how much you are willing to pay for a particular house. Instead of buying a home in an auction, you should buy a house that has been in the market for a long time as it is easy to negotiate its price.
Bargaining is always a preferred way to get a discount on the price of your house. Negotiating the price can be tough for most newbies in the real estate market, but you can at least try it. After all, there is no harm in asking for a discount. But before approaching the property dealer for bargaining, you should make an in-depth inspection of the property. There might be a few drawbacks in the property, such as an awkward room design or an old fashioned bathroom. On the basis of these factors, you can ask the landlord for a discount.
4) Don’t compare yourself to others
While buying a house, most Indians fall into the cycle of compare and despair. We often try to buy a house that will increase our social reputation among our relatives, friends, and colleagues. And, to win in this race, we end up overburdening ourselves with a heavier loan. Instead of obsessing over buying a better house than a friend or relatives, you should ponder over the ways you’ll benefit from staying within your budget.
5) Buy the house with your spouse
By buying a house with your wife, you can save a considerable amount of money on stamp duty. Plus, you can reap some legal and tax benefits in purchasing a property jointly. Being a co-owner of a property, a woman can claim a deduction of up to ₹ 1.5 lakh for the interest paid on a home loan. Plus, joint ownership can be beneficial when both spouses take home loans. In this way, both of them can claim a tax deduction for the interest paid on the loan.
Conclusion:– These were some valuable strategies for saving money while buying your first house. We suggest you follow these tips properly. Also, in order to save money on your house, you should not compromise with the quality of the construction and neighbourhood. On a final note, we suggest you select the loan repayment plan wisely. A long-term mortgage deal costs more in the long run as compared to a short-term mortgage program.
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