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When is the Right Time to Buy a House?

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When is the Right Time to Buy a House?

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Did you just google “is it a good time to buy a house?” or “when is a good time to buy a house?

Well, it’s your lucky day because this is exactly what we’re going to talk about. Consider all the points as some of the most important things you need to know before making your decision. So, without wasting any time, let’s jump into the details.

Firstly, research the market outlook

Other than a handful of sectors like agriculture and online retail, there were hardly any sectors that went unscathed from the pandemic. And real estate was party to this as well.

Despite the industry already being under pressure, there is much hope to be drawn from the growth of the real estate sector in the post-pandemic scene. Reports from the RBI say that a whopping ₹14.7 lakh crore worth of personal loans were taken only for the housing market. What’s more, this was a 9.7% increase in credit disbursals compared to June 2020 levels. So our dreams of owning a house clearly remain unfazed.

That's enough technicality for now. 

Unless you’re swimming in your vault full of gold like Scrooge McDuck, you’ll most likely take out a home loan when you buy a house. And those home loan interest rates differ among lenders but only marginally. So here are some points to note that affect your home loan rate.

Your credit score

this is your creditworthiness or, in simple words, your ability to pay back loans. A poor score will lessen your chances of getting a loan, while a good credit score gives your leverage to negotiate the interest rate.

Current MCLR Rates

This is the benchmark rate at which lenders give loans, and these rates keep resetting every 6 or 12 months.

Location and value

Location matters! There’s an obvious difference between the cost of an apartment in a high end locality and a flat round the corner of a street. If you’re buying the one on the street, then the value will be lesser for the lender since it will be difficult to sell your home. Hence there will be a high-interest rate.

Tenure of the loan

Usually, loans taken for a shorter period have a lower interest rate even though the EMI may be high, and loans taken for a longer duration have higher interest rates even though the EMI value may be lesser. If you’re still confused about what a more financially viable decision would be between renting or buying a house, read a bit more about it here. 

So, when is the right time to buy a house?

Ask yourself these questions before you decide.

  • Are you prepared to put down roots?
  • Do you have job security?
  • Are you financially prepared?

If you’ve answered yes to all of these questions, here’s a checklist to consider when purchasing a home.

Property price

It’s imperative that you thoroughly research the prevailing market rates of similar properties you’re eyeing, as it helps understand if the seller is providing a reasonable price or if it requires negotiation.

The property rates also give clarity on the per square feet rates and the investment prospects of the house as well in case you decide to rent it out or sell it.

Your paying capability

 Since you’ve answered “yes” to the above question, we’re assuming you know your loan-taking capacity and how much EMI you can pay? If not, you can take the help of the Fi EMI calculator online.

Documentation

There are quite a few, but these are the most crucial.

No Objection Certificate (NOC)

A certificate given out by various government establishments like water, gas and other civic authorities. Any property being sold without an NOC is considered illegal. So ensure you check these before deciding.

NOC from the bank

The bank will issue this if a home loan is taken on the house. It’s a certificate that shows all dues have been paid by the borrower

No-encumbrance certificate 

The certificate will tell you if there is any legal issue with the land or if it is partially sold to someone else. It’s a document given out for a maximum of 30 years.

Title Deed

A certificate that verifies the authenticity of the ownership of property. It contains the name of the seller and loan details among other things.

Possession certificate

This is handed over after the sale deed has been done and the buyer has obtained physical possession of the property.

Society related documents

 If you’re buying a house in a community, then there will be specific documents from the community like their own occupancy certificate and property card.

Once you’ve narrowed down your choices, here’s a table you can use when comparing choices.

In addition to these, numerous smaller details and conditions need to be met as well, which are more technical and require expert knowledge, so it’s always advisable to take the help of a legal advisor who’s done this before.


Instead of asking when is a good time to buy a house, ask this: Is it the right time for me to buy a house? Moreover, look into and decide if buying a house is actually an investment for you before you take the plunge. 

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