Buying a house in a new city can be intimidating. After all, you might not be familiar with the localities or the local language. You might not even know the real estate rates in different areas of the city. Fortunately, there are some steps that you can take to make the home buying process smooth and hassle-free.
Take a look at five useful tips to help you buy a house in a new city.
Determine Your Budget
An important part of your search for a house in a new city is determining the budget. A little research on the region’s real-estate rates and reconciling it with what you can afford would help you finalise a price. Remember, if the cost of your dream home is way beyond the capital available to you at present, a home loan is a good way to achieve your objective. So, while planning your budget, work out the EMIs that you can afford to pay every month. You can make an informed decision by using an online home loan calculator.
Arrange for the Down Payment
If you wish to purchase a house soon, you’ll need to start saving for the down payment because home loans don’t finance the entire purchase price of the property. Most banks in India provide funding for 75% to 90% of the total cost. This means that you’ll need to pay the remaining amount. According to the basic rules of financing, it’s important for you to pay a part of the home’s cost for the financier to be able to trust you with credit.
To get your loan approved without any hassle, make sure to check the housing loan eligibility requirements before you apply. Choose a bank that has easy eligibility criteria and minimal documentation. This will make the process smooth and quick.
Search for a Home Loan with a Manageable Interest Rate
The interest rates charged on home loans differ from bank to bank. Since the interest rate adds on to your cost of borrowing, choose a bank that offers a reasonable rate, such as 6.90%. You can use a home loan interest rate calculator to check how the rate will impact your repayment, so that you can make an informed decision. Finding the best interest rate can help you save money for other expenses, such as relocation costs.
Save in Advance for the Loan EMIs
A good idea is to open a savings account with a bank that offers interest of at least 5% per annum. You can also consider fixed deposits and other investments long before you intend to make the purchase. This way, when you need to pay the down payment or loan EMIs, you are well prepared. On the other hand, it also provides you a cushion for a rainy day.
Owning your dream home in a new city might not be easy but it certainly is rewarding. So, do your homework and prepare beforehand to realise your goal without too much stress. For instance, small things such as a healthy credit score and a good interest rate, which can be checked using a simple home loan interest calculator, can make things much more straightforward.