Buying a dream home is a life goal for countless number of people. At an extremely early stage of the financial advancement, people commence to save to buy their own house. When we think about our own homes, we ponder about a good location, the cost of the property, its proximity, the approach to life and the community space along with many other things.
Here’s a quick guide for first-time Columbus ohio home buyers on what they should look at first to be able make their house purchase.
You should make an enough balance between savings and debt while making the decision to acquire a home.
The general mindset is obviously inclined to pay the majority of the price by disposing off investments. However, once you are making a large financial investment, you should be guided by one mantra: “Never dilute your savings”.
A property investment has low liquidity. Please ensure that you are always parked with satisfactory liquidity to manage adverse situations.
Now, before stepping in to the loan market, you need to have a fair idea of how much loan you are eligible for. Eligibility is broadly predicated on two parameters: property value and income.
Income Eligibility- The lender will consider your monthly income to be an obligation to calculate your eligibility predicated on your net earnings.
Property Eligibility- According to the Reserve Bank of India (RBI) norms, financing should be restricted to the market value of the property. Loan as a ratio of market value is named loan to value (LTV).
The LTV allowed according to RBI guidelines is:
For loan value up to INR 30 lakh is 90%.
For loan falling in the band of INR 30 lakh to INR 75 lakh is 80%.
For loan greater than INR 75 lakh is 75%.
However, considering the risk associated with a transaction, the lender at their discretion can slow up the LTV ratio below the RBI norms as well. Lower of the above two is considered as your final eligibility.
There are miscellaneous other crucial parameters that are examined while appraising a loan which includes the credit standing, business profile, age of customer, age of the property and several more. All of them are highly significant and may make a decisive factor for your loan.
If your credit score is low meaning a youthful default is placed on your credit history, lenders will desist from extending the loan. Normally a credit history above 700 is considered to be of prime segment.
Similarly, a very low age like below 21 or more age band like more than 60 generally is a deterrent for loan.
However, the above mentioned eligibility requirements only offers a rough idea of how a lender generally decides for loan eligibility. There are sever before beforeal other grounds which a lender may consider for income eligibility calculation.
Understand Costs Associated
The price associated with the property is more than what is quoted by the seller. The most considerable charges include Goods and Services Tax (GST) charges, stamp duty charges and registration fees.
Biggest expense associated is the stamp duty cost. Stamp duty cost ranges from 5%-10%. Stamp duty is variable to various factors including location of the property, age of the dog owner, gender etc.
The federal government has given various concessions to senior citizens and female owners. There are even states providing allowances based on urban and rural locations.
HERE ARE SOME TIPS YOU COULD FOLLOW TO CAREFULLY PLAN YOUR FIRST HOME PURCHASE:
Know your budget
Be sure of what you want, like the size of the house, number of rooms, its location, parking facility, amenities., etc. It’s also advisable to be specific about the sort of house such as an apartment, a pent-house, a bungalow, etc.
Find an agent
Take a tour of the neighbourhood for each and every option
Calculate the average cost of utilities for the properties you have shortlisted
Look for multiple options before confirming one
Ensure that you are dealing with a reputed builder
Analyze if the home that you are likely to buy is future-proof
Take a home loan for purchasing your dream property