Demystify myths that hold you back from buying a house


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   Why waste money on rent, when you can earn the returns from property purchase? Here, we demystify myths that hold you back from buying a house, and reveal how you could own one in just a year.

   Renting a house is easy and economical. However, a lifetime security only comes when you own a house. Although the cost of buying property is more than renting, it is an asset that will ensure heavy returns in the future. Experts believe that it is wise to purchase a property rather than choosing a life as a tenant. If you are tired of shifting houses and want a place that you can call home, follow these steps:

  Since one year is too short a period to accumulate enough funds for a purchase, one will have to curb expenses heavily and start saving more, at least 60 percent of your monthly net income; Invest in a good and reliable open-ended or liquid mutual fund or schemes to generate more money.

   They are the best and safe investment options in the current scenario; From your savings and investment, ensure that you have at least 20 percent of the flat value and money to pay other costs such as stamp duty and registration, GST charges, broker fee, and more.

   Fortunately, many banks provide 90-95 percent home loans on some housing projects, thus making it easy to buy a house; One can also gain benefit schemes like Pradhan Mantri Awas Yojana that give subsidy to first-time home-buyers.

   “While saving for the purchase, one should also ensure that they have emergency funding that will take care of the next six-12 months’ EMI in case of a job/business loss. Also, see to it that the EMI is not so high that it restricts other goal planning,” says Balakrishnan Venkataramani, financial planner.

Benefits of buying property

1. Tax benefit

   Tax deduction on home loan principal amount can be claimed under Section 80C, with a limit of Rs 1.5 lakh – stamp duty and registration charges can also be claimed u/s 80C. However, it needs to be claimed in the year in which these expenses are paid. Furthermore, one can claim tax deduction under Section 24 of up to Rs 2 lakh on home loan interest, whereas first-time home-owners can claim tax deductions of up to Rs 50,000 under the newly-added Section 80EE.

2. A good investment option

   If a person buys property, heavy returns are guaranteed, whereas there is no value for the money you pay each month as rent.

3. Security

   Having a roof over your head is a basic necessity for any human being. And hence, owning a house provides lifetime security.

Demystifying myths

A few things that keep buyers away from investing in property:

Tedious process:

   Many a times, complex procedures fend off potential buyers from purchasing a house. To make the process simpler, one can hire an estate agent who will guide and complete legal procedures for you.

Fear of being duped:

   A number of instances where people had to vacate their homes due to illegalities found in the housing projects, has left individuals in a dilemma of whether to invest or not. However, the current realty scenario is buyer-friendly owing to the implementation of RERA.

Unable to pay EMI:

   Securing a home loan is a long-term liability. But if you have failed to pay EMIs for a few months, don’t fret. Banks do not immediately foreclose if a person missed an EMI payment. Banks have provisions to restructure the loan by extending the tenure of the loan. With the extension of tenure, your EMIs are reduced making it easy to manage.

From tenant to owner

Trupti Virkar

   “I lived on rent for six years. Initially, it was manageable as the rent was minimal, but when it increased, I thought it would be better to pay this amount as EMI rather than rent. So, I decided to buy a house. Fortunately, I had a healthy amount of savings through fixed deposits and other investment schemes. My brother was a big help in terms of helping me finance the down-payment. The rest I paid off through a home loan. The entire process of buying a home took me six months and was not difficult at all since I hired an estate agent. In 2012, I finally purchased a flat for Rs 53 lakh.”

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source: The Times of India

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