Buying property for the first time? Must-know financial steps for beginners

Buying your first home is one of life's biggest milestones, and one of its biggest financial commitments. The excitement is real, but so are the responsibilities and hidden costs that come with it. While many first-time buyers look only at the price tag, the truth is, there's a lot more to weigh up before taking the plunge. CHECK YOUR FINANCIAL HEALTH FIRST Before browsing property listings or visiting showrooms, take a hard look at your financial health.

Jetaish Gupta, Founder and Director, Adore Group, advises, "First-time buyers should determine the soundness of their financial records, check your income, current debts, day-to-day expenses, and credit score. Make a yearly budget for mortgage payments, insurance, taxes and upkeep, and keep an emergency fund that covers three to six months of living costs."

This preparation will not only help you know exactly how much you can afford to borrow but also show sellers you're serious. PLAN FOR YOUR DOWN PAYMENT, AND MORE In India, most lenders offer up to 80% of the property's value as a home loan. That means you need at least 20% in savings for the down payment. Jetaish Gupta points out that for a 50 lakh home, this could be between 5–10 lakh. But that's not all, you'll also need money for stamp duty, registration charges (5–8% of the property value), legal fees, loan processing costs, and initial maintenance.

Prashin Jhobalia, Chief Marketing Officer, House of Hiranandani, suggests, "Buyers should aim to have 25–30% of the property cost set aside to cover both the down payment and ancillary expenses comfortably. This buffer prevents last-minute borrowing and ensures a smoother transaction." AVOID THE CLASSIC ROOKIE MISTAKES

First-time buyers often get carried away, stretching their finances to secure a dream home.

LC Mittal, Director, Motia Builders Group, cautions, "Common mistakes include not setting a budget, ignoring additional charges like stamp duty or brokerage, and using up all savings for a bigger down payment. This could leave you without an emergency fund for unforeseen events."

Another trap? Letting emotions take over, choosing a home that doesn't fit your long-term plans can turn your investment into a burden.

PREPARE FOR HIDDEN EXPENSES

The property price is only part of the total cost. LC Mittal points out that "hidden costs like stamp duty, registration, repair deposits, brokerage fees, parking charges, legal expenses, interiors, home insurance, society charges, and moving costs can together raise the overall cost by around 10%." If you are buying an under-construction property, you may also have to pay rent until it's ready.

THINK LONG-TERM AND RESEARCH WELL

A smart first-time purchase should also be a sound investment. Annuj Goel, Chairman, Goel Ganga Developments, advises, "Look beyond the price, study the area's prospects, ongoing infrastructure projects, and past appreciation trends. Check rental yield, occupancy rates, legal papers, zoning, and construction quality. These factors affect future resale value and tenant interest."

He also advises having a clear exit strategy, whether you plan to rent it out, sell, or refinance, and aligning it with market trends.

USE GOVERNMENT BENEFITS

If you qualify, schemes like the Pradhan Mantri Awas Yojana (PMAY) can lower your costs with an interest subsidy of up to 2.67 lakh, notes Goel.

Tax benefits under Sections 80C, 80EE, and 80EEA also help reduce the burden of home loan repayments, he added.

Simply put, buying your first home isn't just about finding the right property, it's about being financially ready for the journey ahead. From budgeting and saving for the down payment to preparing for hidden costs and thinking about long-term returns, each step plays a role in ensuring your first investment is a wise one. As Jetaish Gupta says, "It simplifies the buying process because you know how much you can borrow, and it tells sellers that you are serious."

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