Buying a house is a major investment that requires careful payment, there are monthly EMIs towards the home loan repayment, property agent commissions, and repair or installation expenses that you have to bear at the time of home purchase. So, it is important to plan your finances well and ensure that you don’t miss any hidden cost that can derail your budget.
While it might seem that it is impossible to save some money in the process of buying a house, if you take a thorough read of the following post, you will realize that it can actually happen. Leveraging tax relaxations for house loans, opting for a bank with the low-interest rates, and making use of the latest government regulations, etc are some smart ways to save money while buying a house.
Here, we discuss some smart and easy ways to save money while buying a house in 2021. So, if you are also planning to buy one, take a thorough read and make sure you follow these tips to save some money while making the purchase.
6 Ways to Save Money While Buying a House in 2021
1. Home Loan Tax Savings
When buying a home, we recommend opting for a home loan, even if you don’t need that. There are many benefits of such an action on your part:
It offers tax-saving advantages, and apart from the loan principal amount, the interest on a home loan amount is also tax-deductible.
- Further, if your spouse is also working, then you can apply for a joint loan to avail of an even bigger amount.
- When you take a home loan, you have proper documentary proof for the source of payment for the home purchase. This is extremely good for people with higher incomes, as it explains the finances robustly.
- Finally, there is no surety that no problem will arise in the near future that might call for a major investment from your side. So, instead of using all your cash, you must opt for a loan that allows you to save your bank balance for any unforeseen event. There are many reputed real estate builders in Kerala that offer financial services as well. So, you can directly get a loan from there as well.
2. Choose your loan and other allied plans wisely
When you opt for a home loan, we recommend making a wise choice by carefully considering the allied expenses that come along, such as an insurance cover suggested by the lender. While many banks offer insurance plans suggesting that it is important, and outlining the various benefits of the same, there is no law or regulation from RBI or IRDAI regarding the same. So, steer clear of these additional expenses.
3. Avail of the recent government initiatives and plans
The government keeps on announcing various schemes and initiatives from time to time, such as The Pradhan Mantri Awas Yojana (PMAY) that allow you to build homes at subsidised rates. However, such schemes have different eligibility criteria, as they are launched primarily for the underprivileged. So, before making the final purchase, and submitting the entire amount, we recommend consulting the local municipal office regarding such schemes to make the most of your money.
4. Choose a bank with low home loan interest rates
While it has become extremely easy to get a home loan these days, the interest rates and loan offers vary across banks and financial institutions. Hence, we recommend comparing the rates of interest before choosing a home loan. We also suggest opting for a reputed bank to ensure that you don’t get involved in fraud or any other financial trouble. Also, look for certain benefits proactively, such as the following:
- Lower interest rates for the female borrowers
- Loan offers on specific accounts
- Loan schemes with adjustable EMI options etc.
5. Don’t forget to explore some under-construction properties
While buying a ready to move-into home seems like a better idea, if you can find an under-construction property for a lesser amount, it is certainly lucrative. A finished house is more expensive as compared to the one being under construction. Further, it is highly probable for the builder to increase the rates after the project completion. We recommend checking the RERA registration and reputation of the developer to avoid making any losses.
6. Negotiation is an art that can help you save a lot!
While you are out for the purchase, you must negotiate on the first offer from a builder or a realtor. Always ask about other available options, try to lower the price as much as possible and ask about the amenities that will be provided along with the property. However, not many people can negotiate like experts. So, you can also take a family member, or friend along with you who has good people skills and an understanding of the property, to talk to the realtor and close a profitable deal.
Finally, don’t forget to clear the terms for loan spreading right from the start, to avoid any additional costs. So, follow these tips and save money while buying a home!