Buying a house is a big decision in every person’s life. People buy their house after years of savings and hard work, but sometimes taking a decision in haste, incomplete information or just looking at the beauty of the house can prove costly in the future. A house is not just walls and roof, but its strong structure, clear legal documents and proper financial planning are equally important. In such a situation, if you are also preparing to buy a house, then it is very important to pay attention to some important things so that you do not have to regret later.

Look not only at design but also at structure

Often people get impressed by the paint, furniture and interior. But the real strength of a house lies in its foundation and structure. Be careful if you see slanting or wide cracks in the wall, ceiling or floor. Growing cracks around doors and windows may be a sign of foundation slipping. At the same time, if deep cracks, ground subsidence or concrete cracking are seen in the slab, then it can be a serious problem. Crooked floors, gaps between walls and ceilings, sloping ceilings or protruding walls indicate structural weakness. In such cases, it is necessary to get investigation done by experts. At the same time, dampness, bad smell, discolouration or falling of concrete can be signs of water leakage and internal damage, which can be costly to ignore.

Complete verification of legal documents is necessary

While buying a house, first check its registry and ownership. Nowadays, online portals like Bhulekh are available in many states where land records can be viewed by entering the Khasra number. From this, information about the real owner, condition of the registry and any other claim can be obtained. Also check the sale deed, registry paper, NOC and entrance certificate. So that it can be clear whether there is any legal dispute or outstanding loan on the property. If you are buying a flat then it is important to see the approval of the map, permission of the local authority and also the registration documents of the committee.

Be wise while taking home loan

If you are taking a house on loan, then keep your salary and future income in mind. If you have a good credit score, the bank can give more loan, but making more down payment will reduce the EMI burden. Before taking a loan, compare the interest rates from different banks and NBFCs. Also, assess your monthly expenses and try to reduce unnecessary expenses, so that there is no problem in paying EMI in future. Keep in mind that houses are not bought again and again. Therefore, take a decision keeping in mind its price, location and possible future expenses. Before buying an expensive house, think about whether you will be able to handle its financial burden for a long time or not.

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Buying a house is considered to be the biggest financial decision of any person’s life. Not only does it involve a huge amount of money, it also requires long planning, proper timing and financial understanding. In today’s time, due to easy availability of home loans, the decision whether to buy a house by paying the full amount or by taking a loan has become even more confusing. This question becomes more important amid the continuously increasing property prices in India. In such a situation, let us tell you today whether you should buy a house by making full payment or take a loan for it and what is the better option among these two.

Why is it important to compare investment and loan?

Financial experts say that while buying a house, it is not enough to just see whether you have enough money or not. The real question is where that money is invested and how much return it is giving. If your savings are invested in a place where you are getting around 15 percent annual return and home loan is available at around 9 percent interest rate, then it may be a wiser decision to buy a house by getting it financed. But if the return on investment is low and the interest on loan is high then full payment becomes a better option.

Advantages and disadvantages of buying a house with savings

advantages

The biggest advantage of buying a house through savings is that you do not have to pay any interest. In the long run, the interest amount on the loan can sometimes be more than the actual price of the house. Whereas paying in cash makes the whole process faster, one does not have to wait for any bank approval and the deal gets completed quickly. Apart from this, one gets mental peace by being free from the worry of EMI. Such buyers, if needed, can sell the property without the permission of any bank and they also get more bargaining leverage in the resale market.

Loss

Investing your entire savings in a single property can weaken your financial security. In case of any emergency, lack of cash can increase the problem. Apart from this, if this money is invested in any other investment option then perhaps it can give more returns than the home loan interest. Also, you do not get the benefit of income tax exemption on buying a house in cash.

Advantages and disadvantages of buying a house by taking home loan

advantages

When taking a home loan from a bank or finance company, all the documents related to the property are thoroughly scrutinized. This ensures that the property is legally protected and there is no possibility of any dispute or fraud. This facility has to be ensured by the buyer himself when he buys a house in cash. On taking a home loan, there is tax exemption on interest and principal amount under Section 24 and 80C of Income Tax. This reduces the total tax burden. At the same time, by taking a loan, the savings remain safe which can be invested elsewhere to earn better returns. Also, paying EMI on time improves credit score, which increases financial options in future.

Loss

Home loan is a long term commitment, which lasts for many years. Over time, the total payment due to interest can be much more than the price of the property. If for some reason the EMI is not paid on time, the bank can also take possession of the property. Apart from this, there is a risk of not getting loan approval. In such a situation, the decision of whether to buy a house in cash or take a home loan depends on each person’s financial condition, income, savings and future plans.

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