Common Problems Faced by First-time Home Buyers – How to Avoid
Many people put-off buying a new home because it involves significant investment and putting in lots of effort. However, there are many ways to simplify the home-buying process. Buying a home is an important financial decision as it has the potential to give you significant returns in the future. Also, being a homeowner gives you immense satisfaction and sense of security knowing that your family members have a permanent roof over their head.
If you are a first-time home buyer, let us look at the common problems you may face, and tips to avoid them.
Finding the right property
Buying a new home is not just about finances but for many people it also has significant emotional value. You would want to buy a home that perfectly suits the needs of your family members yet be within your budget. And the entire process can go sour if you don’t find such a property.
So, to find the right property, it is advisable that you first decide on a budget, i.e., the maximum amount you can afford to spend. This will immensely help you narrow down the property and make your task much easier.
Take your time to do your research well about the properties in different locations, and short list a few before you connect with the individual seller/builder and make your final decision.
Finding the right lender
Another major hindrance that you may face in buying a new home is finding the best lender. Today, there are many lenders, including banks, HFCs and private lenders that offer home loans. However, choosing the right one can be tough.
So, to make your task easy, you can start by comparing the home loan interest rates offered by different lenders. However, it’s not the only criteria to zero down on the lender. You must also consider their reputation and credibility in the market, the documents needed, other charges involved, disbursement process, flexibility in repayment, etc.
There are many online sources that allow you to compare the loan offers from multiple lenders simultaneously. Take your time to compare the offers well and choose the right lender accordingly.
Saving funds for down payment
When you apply for a home loan, the lenders generally finance a maximum of 80% of the property value. You must pay the remaining amount from your pocket. This is called down payment and it is an integral part of the home loan process. But, often people face problems paying this amount upfront.
If you are facing the same issue, you must start saving for the down payment as soon as you decide to purchase a house. Have a rough estimate of the property’s value that you may want to buy and start saving at least 20% of that value. However, if you can save more, it would be better.
To grow your savings faster, you can start an SIP or invest in other instruments that can offer valuable returns.
Verifying property documents
While buying a home, you must deal with a lot of paperwork, which can be overwhelming. The most important part is to assess the property-related documents to ensure that the property has a clear title and there are no legal issues. However, most people cannot do it on their own as they don’t understand the legal terms.
An easy solution to this is to hire the services of a real estate legal expert and ask them to verify the documents for you. Sometimes, even the lenders offer this service at an additional cost. However, paying for such services would be worth it knowing that you would be investing in a safe property.
Buying a new home may feel overwhelming. However, use the above tips to overcome the obstacles and ensure that the process goes smoothly.