Everybody will have a dream to buy a house. There are so many things we have to see, think , analyse and decide before buying a house as it is an one
time investment and should last for many years. Here i have tried to explain the different steps sequentially that has to be taken while buying a house.
Deciding the budget
This is the first thing we have to decide because we should not suffer later. Note down the total income per month in your family. If there are more
than one member, make a note of how much they can contribute. Approximately calculate how much the expenses will be for a month. Find out the
remaining amount. Note down all kinds of savings like fixed deposits, mutual funds, jewels etc which can be used for buying the house. Roughly
calculate how much EMI you have to pay if you take a loan for the desired amount. For example if you want to avail a loan of 20 lakhs the monthly
EMI will be approximately Rs.20,000. So you have to think you can pay this amount every month. Don't put all your savings into your house. It is
always better to keep savings for using in case of any emergency.
Choosing the locality
Next step is to choose the locality. This depends on whether you are buying a house for investment purpose or going to occupy immediately. If you are
going to occupy immediately then it is better to choose a location which is nearby to the working women in your family or children going to school. If it is
for investment purpose then choose a developing locality so that the rate will be appreciated in future.
Choose the type of house
Next step is to decide the type of house whether it is independent house or apartment. There are many advantages and disadvantages in both of these.
If it is independent house, the merits are complete privacy, full ownership of the land, space for planting trees and plants etc. But the drawbacks are we
have to take full responsiblity for the house. If a small repair work or something else comes, we only have to solve that single handedly. It will be difficult
for women to stay alone in the house as there will not be any immediate neighbour in the building to provide support in case of emergency.
If it is an apartment, the merits are security, neighbours support in case of emergency, shared responsiblity to maintain the house etc. The drawback is
ownership of only undivided portion of the land, cannot plant trees, decreased privacy etc.
Depending on the type of your family you can decide which type of house you want.
Also decide the number of bed rooms ( 2 BHK or 3 BHK ) and minimum area needed. If it is a small family then little spacious 2 BHK is enough . Otherwise
you have to go for 3 BHK.
Choose builder
Next step is choosing the builder. Many people prefer to buy houses from reputed construction companies. They don't like to buy houses from local builders
in that locality. If you go for reputed builders, find out the projects by the reputed builders going on in the desired locality. If you go for local builders, enquire
people in that area about the local builders.
Search options
There are lot of options available to search a house. First decide whether you are going to see on your own or through a house broker. My suggestion is seeing
on your own is the best way. Otherwise you have to give 1 to 3% of the total cost of the house as commission to the broker. If you want to see on your own,
you can view advertisements in the newspapers , real estate websites, free classifieds, local newspapers etc. Also you can give free advertisments in websites
explaing your criteria so that the sellers will contact you. You can also tell your friends and relatives. If you or your friends are working in IT companies,
you can put or see advertisments in their intranet.When you find a house that suits your requirements, enquire full details about the house before planning a site
visit. If you are planning to see a finished house, the details you can ask are
- Age of the house
- Cost of the house
- Area of the house
- Number of bed rooms
- Number of bathrooms
- Type of furnishing provided ( Unfurnished / Semi / Fully )
- Car parking facility
- Floor in which house is located
- Proximity to railway station / bus stop
If you are planning to buy an apartment that is going to be constructed check out what will the facilites provided by the builder for that house. You can
visit the websites of them to have an idea.
Site Visit
Now you have enquired all details about the house and you are now ready to visit the house. While visiting the house see it completely like how the
construction is. Try to open the windows and see what is on the other side. ( Once we lived in a house where we are not able to most of the windows
as the rest rooms of other buildings were located ). See how much sunlight is available in all parts of the house. It is very important for a house to have
sufficient sunlight. Check the drainage system provided. Check if there is any open land on any one of the side of your house. Because you will get lot
of insects in rainy season. Taste the water of the house. Also see the colour of the water. In some areas it is yellow in colour so we have to purify it.
Enquire whether there is any water scarcity in that area. Make sure that the kitchen size is not too small. Check whether the approach roads to the house
are good and have lights in the night. Enquire the neighbouring people how the area looks in rainy season. If it is a low lying area roads will be flooded
with water and it will be very difficult.
Documents
So you have seen the house and like it.The rate of the house also suits you. Now the most important step is to verify the documents. Please get the copy
of the below documents from the house owner and ask for a legal opinion to a lawyer.
- Parent document
- Encumberance certificate ( For atleast 15 years )
- Plan of the house
- Plan approval by local bodies
Parent document tells the history of the house. Encumberance certificate lists the registrations done for that house in the mentioned period. Check the plan
of the house to find if there are any deviations. Once you are completely satisfied with the documents then go to the next step.
Housing Loan
Now you have finalised the house and you have to apply for a housing loan. Now we have to decide the following things:
- Bank
- Type of Interest
- Tenure of loan
Don't enquire one bank. Enquire atleast four or five banks , compare and then decide.It is better to take loan in goverment banks than private banks because
the goverment bank reduces the rate of interest immediately if told so but the private banks will take some time. In goverment banks SBI is a good choice
while HDFC is better in private bank sector.
There are two types of interest options available in the loan namely fixed and floating. Fixed means the interest rate is constant throughout the tenure of the
loan while means interest may increase or decrease depending on the market conditions. While choosing the type of interest, it is better to choose floating
than fixed as most of the banks are now offering fixed interest of 10 to 13% while floating varies between 8 to 9%.
The tenures offered by banks are mostly 10, 15 and 20 years. It is better to choose the maximum tenure as the monthly EMI will be minimum in that compared
to others.One thing you have to enquire the bank is about the pre closure and bulk repayment. Bulk repayment means we can pay part of the principal some time
during the tenure so that the EMI will be decreased. So banks have some criteria like the bulk repayment can start only after 3 years from the commencement of the
loan. If it is repayed before that penalty will be charged. Pre closure means completing the loan before the alloted tenure.