Buying a house is a dream for a many people in India. However, the process to buy a house is not as simple as looking it up and buying it instantly. There are a lot of factors to consider and a fair bit of due diligence is required on the part of the buyer before the house is bought.
The process of buying a house can be condensed into these steps:
Figure out how much you can afford:
The first step on how to buy a house in India is to decide how much you can afford. Housing loans are extremely popular and easily available which means you can also factor in a loan value while deciding how much you can pay for buying a house. It is also important to take a look at your household budget while deciding this. You need to have enough funds left over for making investments and meeting household expenses since banks auto debit the EMI from your savings account.
Decide the location:
The price of the flat depends a lot on its location and the proximity to major roadways or an airport. Upcoming suburbs outside a major metropolitan city will be cheaper than buying a flat within city limits. However, you must factor in the time taken to commute from your place of work to your residence.
Check the resale values:
Checking the resale value of the flat is extremely important. This depends on a few things such as the builder’s reputation, the locality etc. It is easy to find resale values on different property portals. This especially helps in case you want to move in a few years or are investing for the purpose of investment.
Check your loan eligibility:
Real estate is extremely expensive in India and not many buyers can afford to buy it outright with their savings. This is where a home loan comes in. Most lenders have a home loan eligibility calculator on their website where you can check for your loan eligibility. The loan eligibility does not translate into the final loan amount since that depends on the actual property itself. However, these calculators are a good indicator of how much loan you can expect to get if you apply for it.
Registration and stamp duty:
Registration and stamp duty are costs that are paid over and above the purchase price of the house. These costs differ from state to state in India and each state has a formula for calculating them. It is important to factor these costs since this adds to the expense.
You must decide whether to buy a house through an agent or directly. Agents prove to be helpful while finding buyers and sellers for flats, especially resale flats. However, they also charge a commission from both parties for the sale.
You can either buy a flat in a new construction or buy a resale property. New constructions also have a risk of permissions attached to them. However, new constructions also come with more amenities.
Rental value of property:
If you’re looking to rent out the property, you need to calculate the amount charged as rentals from similar flats in the area. This will help you estimate your monthly earnings. It is better to buy a flat in an area that is conveniently located since such places will always have a demand for rentals.
Once you factor in all these points, you can then add up the total value of the house. How much money to buy a house in India depends majorly on the location of the flat and the city or town, but after considering these points, you can get a fair idea.