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A simple guide for people buying their first home in india

With interest rates at fairly low levels overall, the time may be ripe for buying a house property. The process gets a lot more complex in case you are a first-time home buyer. In such cases, here is a first-time home buying process flow chart that tells you the steps you need to go through for buying a property if you are a first-time buyer. Here is your first-time home buyer guide to be used as just a stepping stone for buying your dream home.

Step 1: Take stock of your assets, liabilities, and income

This is the starting point. Even before zero in on the property, you first need to be clear on where you stand financially. While you would obviously be taking a home loan for the property, you must be clear about how much EMI you can afford, what are your current assets and liabilities, what you own and what you owe.

One simple approach is to use an online EMI calculator to check how much loan you can afford to service and how to keep your individual credit rating in good shape. The other thing you must work out is how you will manage the down payment, which can be between 15% and 20% of property value. That is the first step, so be ready with numbers in terms of liquid assets at your disposal.

Step 2: Take time to choose the property after thorough evaluation

How do you evaluate properties? Check the background of the builder. Avoid builders with a history of delaying projects and builders who defaulted to banks in the past. Such builders are likely to be blacklisted by banks and funding could be hard to come by. Quite often, even banks don’t approve projects by such builders. Do some basic checks through a property valuer on the documents like title deed, encumbrance certificate, link document etc. Also check the connectivity of the property in terms of access to the market, schools, colleges, commercial centres, railway stations, bus-stops, etc.

Step 3: Do a comparison of the major lenders

Quite often, you would find that the builder has already tied up with a bank. You are not obliged to go with them. Instead, use one of the syndication sites to compare loans across lenders on rate of interest, loan to value (LTV), prepayment charges, repayment flexibility etc. One more thing you must remember is to first to the bank where you have an existing relationship. They are more likely to respect the relationship and give you the best rates. You can check if you are eligible for PMAY (Pradhan Mantri Awas Yojana) subsidy scheme.

Step 4: Check your credit score and, if necessary, update it

One important step you must take is to check your CIBIL score or credit score. Normally, a score of 750 and above is considered to be good. Anything below that means you could have problems getting loan approvals; although you still get home loans. Often, personal loan or credit cards may be repaid but still be showing as outstanding. In such cases, approach CIBIL direct with the closure letter and get the score updated. It can make a big difference to your eligibility.

Step 5: A joint home loan must be evaluated at this stage

As part of the first-time home buying process, you must seriously consider if you must take a joint home loan instead of an individual home loan. If both you and your spouse are working, it increases your eligibility if you add your spouse as co-borrower. The joint home loan can also double your tax benefits, but first ensure that you have enough interest payable and enough tax liability to justify such a move. If you can afford it, it is best to keep the loan single to begin with.

Step 6: Read the fine print of the home loan agreement

Before you sign the loan agreement, ensure that you have fully read the terms and conditions and if need be, run it through a lawyer to get legal opinion. There are several clauses in the loan agreement like prepayment clause, owner equity clause, default clause and force majeure clause. All these are important clauses and you must be familiar with what it means to you. Remember, these clauses also have long term financial implications so go through it thoroughly.

To sum it up, the first-time home buying process can be quite intimidating and also seemingly complex. However, it is more about getting the process flow right. What you need to do is to go through this first-time home buyer guide, which will tell you exactly the things you should be prepare for, as a first-time home buyer.

SBICAP Securities Limited through its division SBI Realty solutions deals in Pre Launch, Under construction, Ready Possession. SBICAP Securities Limited through its division SBI Realty solutions provides a unified platform for exchange of information & facts for buyers, builders & sellers. SBICAP Securities Limited through its division SBI Realty solutions is merely an intermediary for exchange of information to facilitate the transactions between Builder, Developers / Seller and Customer / Buyer and is not and cannot be a party to or control in any manner any transactions/disputes between the Seller and the Buyer. Projects featured on are SBI approved projects only. SBICAP Securities Limited through its division SBI Realty Solutions shall neither be responsible nor liable to mediate or resolve any disputes or disagreements arising between the Buyer & Seller and both Seller and Buyer shall settle all such disputes without involving SBICAP Securities Limited through its division SBI Realty solutions in any manner whatsoever. The Website provides in depth analysis of the Property Market with more than 2400 Under Construction Projects developed, which are currently under development by more than 800 Developers. The website features latest prices, digital pictures of projects in various construction stages. The focus of the website is on Home Buyers looking to buy or upgrade to a New Home or Invest in under construction project or pre-launches by reputed builders.