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Published on 2/6/2017 1:59:22 PM
Time to start planning your home purchase
Getting started early on the planning will help you get a good deal on your loan.

With property prices hovering at attractive levels, prospective buyers will find this an opportune moment to buy a home. In the wake of demonetisation, and the cash crunch with the new notes taking some time to reach the banks and ATMs, this will come as a trigger.

The home loan interest rates began on a downward trend recently and it is likely to continue. The sentiment is bound to look up as prospective homebuyers find their affordability factor going up with cheaper home loans, more tax sops and attractive property prices, all adding up to make this one of the best market conditions in recent times.

It is time to get some spade work done if you have been planning to buy a home. A significant number of fence-sitters will jump into the fray, now that the Union Budget is out, which will push the market sentiment up a bit.

Here are some pointers:

Arrive at a budget: While the Budget has been presented in Parliament on February 1, it will come into effect from April 1. This means you have a good two months to evaluate the implications of the Budget on your home loan.

You can begin on the planning right now. Generate an income and expense statement with projected income through the new financial year. Further fine-tuning can be easily made in the forthcoming weeks.

Ensure you include all estimated incomes such as salary, returns from investments, etc. Deduct from this projected expenses. Include expenses like insurance premium, onetime expenses like a car purchase that may arise, monthly savings including savings in a contingency fund, etc. You will get a rough idea of the sort of budget you have for your new home.

Draw up a statement in detail listing all these incomes and expenses. Here, factor in the EMI including the tax benefits as they stand after the Budget. Given the strong sentiment in the market over higher tax breaks in the coming financial year, your statement in all probability will look better now, especially as Budget 2017-18 has been exceptionally kind to affordable housing. Now that the final picture is clear with the Budget in front of you, begin shopping for a home loan. Track the market carefully, as many financial institutions are bringing down their interest rates. Go through the terms and conditions closely and pick one that is most attractive.

If you choose your financial institution and loan scheme well, the overall cost of finance will be a minimum. It, therefore, makes immense sense to spend time and shop for your home loan. Beginning now on the planning will afford you the luxury of more time to spend on evaluating the various options available.

Evaluate Properties: If you haven't been evaluating properties, the sooner you begin the better. This becomes easier if done once you have arrived at your budget for the new home. With your budget clear, you can shortlist a few locations and projects. You can then begin visiting each of the projects on your list to finalize the one you feel is ideal.