Did you know that in the top 30 cities of India, there are around 1.2 million unsold residential properties? Along with this, the home loan interest rates have become much more attractive. These factors have combined to make the real estate market extremely lucrative for buyers. But before you go on to take advantage of these conditions, there are certain things you should keep in mind during the house hunting process. Here’s a look.
Choose the Right Locality
During house hunting, research the neighbourhood properly. You might be getting the house cheaper at a particular location, but that might not always be the best option. The house may be too far away from your office or your children’s school. This would not only make you spend more on transportation, but also lead to longer commute times. Long commuting hours have been linked to high blood pressure, increased anger, musculoskeletal disorders, and inability to concentrate at work. Also, look for a house which has hospitals, railways station and markets in close proximity.
Research Home Loans
Not only do you need to research the property, but also the home loans. Some of the things to look for while choosing a home loan are:
Floating or Fixed
In case of floating home loans, the interest rate keeps changing throughout the tenure, according to market conditions. While these loans generally have a lower interest rate, they are difficult to budget. Fixed loans have a constant interest rate and offer great predictability.
Try to look for lenders with lenient home loan document requirements. There are some banks for which even ITR documents might not be required for getting home loans. But you must have a good history of repayment.
Loan to Value Ratio
The highest LTV ratio for properties worth more than ₹75 lakhs is 75%, between ₹30 lakhs and ₹75 lakhs, the ratio can be 80%, and below ₹30 lakhs, it can be as high as 90%. Look for a lender that offers the highest LTV ratio. If you need any help regarding calculation of home loan interest rates, there are calculators available for this.
Conduct Physical Inspection
While house hunting, thoroughly check the physical condition of the property. Some of the things to check are:
- Faulty plumbing
- Rotten door and window frames
- Missing roof tiles
- Moisture in the walls
Calculate All Costs
When you buy the house, you do not pay just the initial cost told by the broker. Instead, you will have to pay registration charges, maintenance fees, stamp duty, homeowner’s association fees, and closing charges. Ask about all these costs to make an accurate cost estimate.
Check Floor Plan and Size
Make sure that the house is big enough for all your family members as well as the occasional guests. Also, know about all the terms regarding size and floor plan. You might look at the built-up area and think this house is big enough for you. But the built-up area also includes balcony, terrace, roof area, and even columns and walls. A better option is to go with the carpet area.
Apart from these, also look at the natural light and ventilation of the house. This can make a big difference on your well-being and electricity costs.