Amid the present Novel Coronavirus outbreak, first-time homebuyers are in a dilemma. Many prospective buyers who had plans to invest in real estate were adversely affected by the pandemic. Continuous lockdown stalled construction works and impacted the economic situation of the country.
However, with each passing week, we see the government lifting the curbs in various sectors to allow the economy to start functioning normally. In light of many employees taking salary cuts, the RBI also introduced loan moratorium to ease their worry. Despite all that, the slashing of the home loan interest rates has propelled several individuals to start investing in a property. Yes, there’s no question that it’s a conducive time to buy your dream home by taking a measured approach.
Top Tips for those investing in property for the first time
As a first time homebuyer, there are no reasons to have a pessimistic outlook. We need to understand that it is not the end of the world. Eventually, a fall in the Coronavirus cases would enable normalization of situations. Buyers should keep these aspects in mind in the present circumstances.
- Fulfill your credit requirements– Creditworthiness is the most important requirement for the sanctioning of home loans from banks and housing finance companies as they focus on minimizing their Non-Performing Assets (NPA). Hence, they are tightening their credit score requirements on loan products. As a buyer, it is your responsibility to maintain a good credit score which always helps you secure any kind of loan. For a good credit score, you must pay your bills and outstanding debts on time.
- Reduce your EMIs with longer loan tenure– A longer tenure helps you to reduce your cash outflow in the form of lower EMIs. In times of weak economic situation, it is wiser to take less financial burden on yourself.
- Keep an emergency fund– Amid panic situations, individuals must keep reserve cash to manage rising financial uncertainties. Sufficient savings can help you to buy time and overcome a financial crisis or loss of a job.
- Analyse your financial obligations– Before purchasing your first home, it is important to assess your financial position such as maintenance costs, disposable income, fixed monthly costs, job security, down payment, EMI, etc. This can let you fix a budget that becomes manageable.
- Buy your first home in emerging locations– To live safely, social distancing is of utmost importance. If you are thinking of buying your first home, look for properties in less crowed locations and emerging locations. Preferably, first-time buyers can purchase a property at an attractive price in such places.
- Buy a smaller home in times of uncertainty– Buyers should adopt a rational approach before purchasing a new home. With rising financial insecurities, first-time buyers can go for smaller houses. A bigger house is costlier and demands a higher down payment.
- Trust a reliable Developer– Apart from evaluating your personal financial capability, it is also important to evaluate the developer’s capacity in completing the project on time without delay. Buyers must meticulously focus on analysing different real estate projects and the developer’s reputation in the market.