How to avoid these common mistakes made by first-time homebuyers
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Buying your first home comes with many big decisions and can be stressful. Between the euphoria of buying a property and the stress of its financial implication, a first-time buyer often becomes susceptible to making errors that could leave them with repentance later.
Here is your list of critical information to know as a first-time homebuyer to understand and avoid typical pitfalls of buying your first home:
- Inadequate Research: In being over-enthusiastic, first-time homebuyers often do not research properly, and those who do, get overwhelmed with the abundance of information available on apartments in Mumbai. Several factors such as selecting the right real estate developer and location, financing decision, opting for the right bank loan, and many more are critical in making the home buying decision. Hence, it is significant to research well, as homebuying is not an impulsive decision.
- Home Loan: Many homebuyers do not understand the essence of financing a home; they cannot demystify the jargons or identify hidden costs or fully understand the benefits offered to them to make a sound decision. The logical thing for homebuyers is first to recognize what kind of home loan they are eligible for and understand the terms and conditions properly. Also, check with the loan provider about first-time homebuyer options.
- Budget: First-time homebuyers make the mistake of not accounting for the additional expenses on top of your monthly mortgage payment, such as stamp duty, property taxes, homeowner’s insurance, regular maintenance, and registration charges for residential projects in Mumbai. Having a prior estimate of these expenses would also be helpful while determining how much you can afford to pay each month for a home.
- Ignorance about tax benefits: First-time homebuyers might not be well-versed about the taxes that they have to pay upon buying a house and the rebates that they can claim under various sections of the Income Tax Act. Not paying the taxes on your home purchase would amount to tax evasion, while not correctly claiming the rebate would mean financial losses. In India, special tax breaks are allowed to first-time homebuyers under Section 80EE, and Section 80EEA, and buyers should take advantage of these provisions.
- Draining of savings: Spending all or most of your savings on the down payment and closing costs is one of the biggest mistakes made while buying Luxury Apartments in Mumbai. First-time homebuyers must save enough money to make a down payment, pay for closing costs and still have 4-5 months’ worth of living expenses in an emergency fund. Depleting your emergency or retirement savings to make a sizeable down payment is a risk best avoided.
It is the best time to invest in a home right now, especially for first-time homebuyers, considering that home loan rates are low, and many real estate developers in India are offering attractive schemes. Make sure to avoid these common mistakes and go ahead with a reputed real estate developer who is financially solid and has an excellent delivery track record.