The best time for buying a house was 10 years ago. The next best time is now! Although the real estate market took a dip in the pandemic, it has recovered well. And for all of those who are looking to buy a house, now is the right time to do so.
However, any decision taken in a haste without considering all the details is not a wise one. We want the best for you. And, it all starts with making sound decisions. In this blog, we’ll take you through some common mistakes that home-buyers commit while buying a house. This will act as a guide for all you future owners.
Buying a house without having a financial plan
We Indians are driven by emotions. There’s nothing wrong about it and it’s good that we embrace it. Buying a house is perhaps the biggest milestone in our lives. Naturally, we are bound to be emotional about it. However, you can’t buy a house just based on emotions. It is a huge financial commitment and requires a proper financial plan to go about it.
Not having a concrete financial plan will definitely hurt you in the long run. After all, financial well-being is one of the most important parameters to lead a stress-free life. If you approach a bank for a home loan for buying a house, the bank will mostly sanction 80% of the total amount of purchase. The rest 20% has to be arranged by you.
It may not sound like a big deal now, but it will with time. Overtime, you’ll have to accommodate for some other expenses. And if you don’t have a plan in place, chances are that you’ll end up taking debt. This will most probably be a personal loan and the rate of interest is anywhere between 14-17%.
Debt with a high rate of interest will definitely burn a hole in your pocket. Which is why we recommend having a financial plan. You can consult your financial advisor or reach out to the our consulting team to help you guide better.
Not scouting enough properties
When it comes to buying a house, the more, the merrier. No, we don’t mean buying more houses, but scouting more houses. Finding a property that suits your needs can be a daunting task. With so many developers and housing societies around, it can be a tiring job to go out and check everything out.
However, not putting in enough efforts when buying a house can lead to bigger problems later. With the introduction of Real Estate Regulatory Authority (RERA) in 2016, it has become easier for home buyers to look for genuine real estate registered under the state government.
Several other aspects like location, quality of construction, amenities and facilities offered, accessibility, safety and security, emergency services, and effective management should be taken into consideration while buying a house. You should make an informed decision only after going through all these points beforehand.
Check out Address India’s website for RERA approved properties in Dehradun.
Check out Yash Greens if you are specifically looking for a 3BHK apartment.
Not investing
If we were to ask you – what’s the difference between a saver and an investor? Most of us would say it’s the same, but it isn’t. This is because of the lack of financial awareness amongst us. Saving and investing are two different entities. You might argue that they are interdependent, and that is true. There’s no investing without saving. But investing gives you more leverage and allows your money to grow by the power of compounding.
Saving is a good habit to inculcate. In fact, you should save a sizable amount from your income every month. Some experts suggest keeping aside a certain amount every month. And then manage all your expenses from the remainder of the amount.
For example, let’s say you earn INR 50,000 a month. Instead of saving whatever is left, keep at least 20% aside, that is INR 10,000. You can keep aside more if you can survive on minimal monthly expenses. Manage all your expenses in the leftover amount. This is commonly known as “Paying yourself first”. As a result, you develop a habit of consistently saving money.
The saved money can then be put to work in some investment instruments like bonds, savings certificate and mutual funds to generate returns of up to 12% every year. If you continue doing this for a long period of time, you’ll have enough corpus to put in a down payment for buying a house. You’ll also end up increasing your affordability since your money grows by the power of compounding.
If you don’t invest, you’ll be losing your money on your savings because of inflation. So if you aren’t investing your money yet, start today. Consult your financial advisor on how you can invest to generate good returns on your savings.
Peer pressure
Yes, peer pressure is relevant here as well. Your friend just bought a lavish apartment and invited you over. You are bound to envy him/her. Your parents keep talking about your relatives buying a house and how you should as well. As a result, you end up buying a house that becomes a financial liability for you.
Life isn’t the same for all. You should always go about your own pace. Maybe your friend could afford that house because his parents helped him with the finances. Maybe your relatives could afford to buy a house because they chose a remote locality which is relatively cheaper. You don’t know it and thus, you shouldn’t compare. Buy a house only when it feels right; when you are ready!
Address India shall be there for you, when it’s time for you!