Buying a house? In this economy? Congratulations on the financial stability. What’s that like?
But seriously, congratulations. And good luck fighting off every relative with unflappable, unsolicited advice about home buying. Even without them, there are far too many traps along the way. Gurgaon realtor Haneet Narang, personal finance content creator Shreyaa Kapoor, advocate Sarthak Maggon, and psychologist Ujwalla Bhandari lay out the key issues to address before signing on the dotted line.
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First responders: Of course, location matters. Who wants to live in a dump in a dumpy part of town? But most first-time home buyers (unless they’ve got family money to spend, or have already struck it rich) should check their wallets before they check out pin codes. “Consider your income, existing debt, monthly expenses, and potential future changes in income,” says Kapoor. “Ideally, your EMI shouldn’t be more than 28% to 36% of your monthly income.”
Security check: A good location isn’t just about the posh neighbourhood, how close you are to family, or how quickly Zomato can deliver salmon sushi at midnight. “Research the area and its safety,” says Narang. These are necessary evils.” This means checking that the house you’re buying comes fitted with fire alarm system that connects directly into your apartment. For higher floors, check if the windows are barricaded. In gated communities, ensure that the complex hires trained security guards and that the CCTVs work, even in the basement. People who have been living in the area for a while will have the best answers.
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Legally speaking: “Consult with a property lawyer once the shortlist of properties is made,” Maggon says. He has a checklist for clients to run by the legal firm. Make sure that the person claiming to sell the home (the builder or the owner) legally owns the place and has the sole authority to sell it; that there’s no co-owner who might show up later, claiming fraud. Check also that the property is not in the middle of pending litigation, be it a consumer issue, insolvency or criminal case. “Make sure builders have environmental permits,” Maggon says. And check their delivery record. If they have delayed handing over previous projects to buyers on time, it’s a red flag. “Do a title check, examine the property-ownership history, and file requisite RTIs with the jurisdictional sub-registrar to ensure that the conveyance documents are registered,” Maggon advises. “And always register your property documents after purchase.”
Shake it up: A home that looks solid on paper can still fall apart in real life. New apartment or old, hire an independent structural engineer to identify if there are any flaws that might require repair or reconstruction later. Maggon also recommends checking government housing schemes to see whether a buyer is eligible for any kind of reprieve. “Home loan interest rates are usually cheaper for women,” Kapoor says. “They can apply as co-borrowers alongside their spouses so the family has better eligibility for loans. Women also benefit from a tax deduction on home loan repayments, with maximum deductions of ₹1.5 lakh on principal and ₹2 lakh on interest.”
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Home prices are largely driven by promises – the view of a lake from a window, a Metro station planned within walking distance, access to public parks, hospitals and the new airport. “Check the master plan passed by the area development authority to ensure that infrastructural projects will increase the value of your property,” Maggon says. And find strength in numbers. Befriend others who are buying in the same project and try to invest in groups. “Mass action easier against an erring builder then becomes easier.”
Pay it right: Buyers who clear every eligibility requirement for 80% home loans often forget that the interest makes up the majority of the repayment. Small EMIs, paid over a longer period, mean the home may ultimately cost almost twice the asking price. Shop around and pick the lowest interest rate and tenure possible. Look for EMI schemes that allow for low-penalty prepayments, so you can pay back the loan quicker when more money becomes available.
Ask builders and banks about hidden expenses. “Most people only consider the loan amount as the home cost,” Kapoor says. “Property tax, loan interest and insurance and prepayment charges also add up.” Owners pay society maintenance charges, water bills and insurance for as long as they own their home – it’s an expense few account for when they budget their EMIs.
Emotionally speaking: Bhandari believes it’s a good idea for home buyers to consider therapy after a home purchase. It is, after all, an emotional investment as well. “Buying and setting up a new home may take us back to our own childhood homes. We may find ourselves replicating or rebelling against certain patterns,” she says. “It is also a new life stage, for which we don’t always have a template. There might be increased friction with partners, parents or siblings through the stressful process of settling in.”
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Consider a little self-examination right from the start, she says. Is the home about putting down roots, showing the world you’ve made it, escaping a family legacy, a place to exert independence? “It is important not to force oneself to experience something as exclusively positive, just because it is a social milestone,” says Bhandari. Let the home become the refuge, not the source of resentment.
