7 Home Buying Tips In India

how to save for a house tips

Buying your first home? Looking for Home Buying Tips In India?

Looking for a new place to live in with your family?

Read on to find out Home Buying Tips you should keep in mind while making possibly the biggest purchase of your life!

It is a common misbelief, especially in a country like India that the more expensive your house is the more stable and successful your financial status is.

However, you must try not to buy a more expensive house than you can afford and fall in this deadly trap of mere show-off.

Financial experts strongly recommend buying a cheaper house than you can afford so as to not dent your financial car in the long run.

In other words, you must remember the proverb you learnt in school: “Cut your dress according to your cloth” (that English class was useful after all!).

All this ‘house-buying’ exercise might seem a little overwhelming, but worry not; we at Bachat are here to help you out with all things money! Read on to find out how.

Home Buying Tips #1: Give it a lot of thought

Home Buying Tips Thought

Your home will most likely be the biggest purchase of your life. So you will, I trust, give plenty of thought to the amount you ought to spend on it.

In spite of the fact that the cost of an expensive house can eat up your peaceful nights, there is something particularly enticing about buying a house which costs way more than you can afford, right?  

The reason behind this is simply that the Indian mentality makes us all believe about how a costly house reflects a strong stance in the social and financial arenas of your life.

Most of us fall into this trap since we believe that buying a house is a one-time event and we should get whatever we can, even if that means stretching your finances like a rubber band.

But what we often ignore is the negative recoil this action is going to have on our personal life.

Another reason why your house-budget may seem less to you is because you want to buy those facilities in a house which you are not even going to use in the future.

We term these facilities as “Extra Luxuries”. What we mean by the term ‘extra luxury’ is the facilities and luxuries you wish to invest in even though they have almost zero utility in practical everyday use.

For instance, you may be tempted to buy a house having a separate living room and a drawing room.

While this sounds impressive, it may not look so impressive on your bank statement.

Also, before proceeding with your house-buying decision, you must once consider renting. I know the common reaction to this statement:

Renting? Who does that?

Although it is often believed that owning a house is better than renting, I believe ‘to each their own’.

Renting and buying are completely competitive options for one to choose from and should be dependent upon an individual’s personal circumstances rather than on society’s baseless notions.

If you are looking to rent a house, it is very necessary to know how much should you spend on rent.

Home Buying Tips #2: Decide on the Location

Home Buying Tips Location

While most people do not have to spend a lot of time on this decision given they know they’re going to live in the same city throughout their life, many others are still considering whether to invest and buy a house in a metro city or not.

Having a home in a metro or a Level 1 city has its own focal points, generous rental pay being one.

Rental salary in metros will be higher regardless of whether capital valuation for the property is lower, yet one needs to choose if this is an advantageous exchange off.

In any case, on the flipside, specialists trust that rising territories, Level 2 and Level 3 towns, are progressively alluring choices.

Developing regions and Level 2 and Level 3 urban areas will in general offer more chances for property appreciation.

On the off chance that there is no extension for a city to develop further (regarding social infrastructure) properties in it won’t ‘take off’ as might be sought after.

While Metros are a good option to buy a house in due to ample development and career opportunities, they also cut in large holes in one’s pocket because an individual does not pay for the property, rather pays for the locality.

Home Buying Tips #3: An extra guest room or extra funds for your retirement?

Home Buying Tips Fund

Those who make an average monthly income and yet own lavish homes have their own priorities. There is no doubt that they have immense home value, yet what amount of funds do they have in reserve?

How much funds have they been able to save for their kids’ college education?

What do their retirement accounts look like?

I’m sure these questions are not going to have exceptionally impressive answers. But the same questions about your financial health can have positive answers if you prioritize extra reserve funds in place of an extra guest room which you eventually are not going to use anyway.

While it’s true that your kids will enjoy the extra room and space, you must consider that what’s better is the ability to support your kids’ education, having the option to afford decent family vacations periodically and having an emergency fund.

What’s more, if you intend on buying  a big house thinking that it’s just a one-time investment, you’re wrong my friend.

Expect everything to cost more in a bigger house i.e. when you purchase a greater or progressively costly home, nearly everything costs more.

For instance, more space implies all the more area that requires air conditioning which in turn implies higher service bills.

Well, that is not all. A greater house implies everything is greater and increasingly costly to fix.

A larger rooftop will cost in excess of a little one, and the more windows you have, the more costly it will be to redesign them.

Flooring and tiles are typically valued in square feet, so more square feet will definitely prompt greater expenses in terms of larger carpet. A larger garden will call for greater landscaping expenses.

The list can go on and on, and can your housing bill.

Home Buying Tips #4: You will buy a “house”, but you will own a “home”

Home Buying Tips Family

A house will be your home, and that is quite significant.  

Not exclusively will a house likely be the biggest buy of your life, it will be the place you will spend the greater part of your day, and hence life.

It will be your place of shelter from a universe full of work and stress. It might be where you will begin and raise a family.

While you must consider a variety of factors while buying a house like vicinity to schools, hospitals, markets, you should not, in any case give these components a chance to bait you into spending more than you should.

At the time of purchase, you should try to first gauge the amount you can afford to spend on a house given your income.

After discovering this amount, you must try to find a place which costs around 15% lesser than your gauged amount.

This will lead to you never losing your sleep over your installment and interest payments.

Also, surprisingly, you will have the option to fulfill heaps of other objectives, from retirement to travel and also, home improvements and renovation.

That is all the cash that might’ve been spent on a progressively costly house.

We at Bachat help you in creating budget and saving for buying a house you can call Home.

Home Buying Tips #5: Determining your affordability amount?

money being exchanged

When you try to gauge the amount you can easily afford to spend on a house, you must take various types of debts and obligations into account.

For one, there’s the house maintenance cost that you can bear and furthermore the all-out month to month obligation you can manage (your accommodation instalment joined with other obligation instalments, for example, vehicle loans, and Visas).

The more other obligations you have, the less you ought to spend on your housing instalment.

Be that as it may, you’ll often find clashing data as to how much should you spend on a house. The golden rule to deciding how much should you spend is:

Continuously spend short of what you might, and you’ll never have to lose sleep over your finances.

In the event that you need more space or another element, you can redesign. In the event that you truly don’t feel comfortable in your purchased home, you can move.

Be that as it may, in the event that you purchase an expensive house and discover you can’t manage the cost of your home loan, you might not have any choices.

In the most pessimistic scenario, you could get yourself submerged in a terrible real estate market and not have the option to sell your home.

The less cash you put into your month to month housing installment, the more cash you have accessible for:

  • Emergency funds  
  • Retirement funds
  • Recreation and travel funds
  • Business opportunities  
  • Improving or remodeling your home!

What do you truly require in a home?

So you’ve made plans to spend less on your home buy. Amazing! Now all you’re left to do is set progressively practical desires.

In the event you feel that you can bear the cost of a 3,200 square foot bungalow with a pool yet you know a 2,000 square foot will also get the job done equally well, go with the less expensive alternative.

Having excessive space will cost more and yet you’ll never end up utilizing it at any rate.

Also, try not to disregard the home loan when considering your complete expense.

A 15-year home loan expands the expense of your regularly scheduled installment, however, can spare you many thousands in terms of interest costs.

In the event that you decide on a 15-year loan rather than a 30-year advance, you’ll naturally begin looking for more affordable homes.

Don’t forget, put 20 percent down!

man with a sack of money

At the end, one simple trick to gauge your ability to afford a particular home is to see whether you can pay at least 20% down payment at the time of purchase.

All the more critically, in any case, it’s a decent gut watch that you can manage the cost of the house. On the off chance that you wind up extending for a house that expects you to lessen your down payment, you might be spending excessively.

Therefore, the conclusion is you must never purchase a house which requires you to stretch your finances and lose your sleep.

After all, what’s more important than sleep, right?

Well, jokes apart, the truth is you probably don’t require as much space as you might suspect you do. Besides, purchasing a cheaper house implies more reserve funds for retirement, your rainy day account, and home improvements.

How should I decide the location of my home?

While most people do not have to spend a lot of time on this decision given they know they’re going to live in the same city throughout their life, many others are still considering whether to invest and buy a house in a metro city or not. Having a home in a metro or a Level 1 city has its own focal points, generous rental pay being one. Rental salary in metros will be higher regardless of whether capital valuation for the property is lower, yet one needs to choose if this is an advantageous exchange off.
In any case, on the flipside, specialists trust that rising territories, Level 2 and Level 3 towns, are progressively alluring choices.

Should I buy a home with an extra guest room?

While it’s true that your kids will enjoy the extra room and space, you must consider that what’s better is the ability to support your kids’ education, having the option to afford decent family vacations periodically and having an emergency fund.

How should I decide an affordable cost of a house?

When you try to gauge the amount you can easily afford to spend on a house, you must take various types of debts and obligations into account. For one, there’s the house maintenance cost that you can bear and furthermore the all-out month to month obligation you can manage (your accommodation instalment joined with other obligation instalments, for example, vehicle loans, and Visas).

What do you truly require in a home?

In the event you feel that you can bear the cost of a 3,200 square foot bungalow with a pool yet you know a 2,000 square foot will also get the job done equally well, go with the less expensive alternative.
Having excessive space will cost more and yet you’ll never end up utilizing it at any rate.


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