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Common Challenges Faced by First-time Homebuyers

Common Challenges Faced by First-time Homebuyers

Buying a home is often at the top of people’s to-do list. However, it is not an easy goal to achieve. There are several challenges people face when purchasing a house. Things might seem further complicated if one is a first-time homebuyer.

Here are some of the most common challenges faced by first-time homebuyers and the ways to get better of them:

Credit score

One’s credit score plays a crucial role in deciding home loan interest rates. When a borrower approaches a bank or a home loan provider for a housing loan, they do a thorough check of the borrower’s income background and history of past debts before deciding on the home loan eligibility. The borrower must always strive to maintain a good credit score.

Additional Read: Planning to buy a home for the First Time? Make sure to follow this Home Buying Guide

Budget 

While there are many home loan options to choose from these days, it is still essential to pick a house that fits in the budget. Home loans are long-term commitments, and therefore, it is vital to find a house that one can afford for the rest of their life. Before focusing on the size of the house one wishes to buy, decide on the budget. 

Down payment

Home loan interest rates may differ, but the down payment usually ranges between 10-20% of the entire loan.  With rising real estate costs in the country and around the world, arranging for a large sum of money as the down payment for first-time homebuyers could be a challenging task. One must research thoroughly and find the best down payment deal that would suit their budget. 

Inadequate savings

Saving up for a house is not easy. One needs to compromise on many other aspects of their lifestyle to put together enough funds. This can mean, avoiding dining out a lot, cutting back on vacations, minimizing other debts, etc. Opening a savings account that offers a high rate of interest or investing in instruments with high yields can be a good way to speed up the savings process. 

Poor understanding of the topic

Buying a house is not something one does very often. In fact, some first-time homebuyers are often the first generation in their families to buy a house. There are many untouched aspects in the process that one should familiarize themselves with. 

Additional Read: Top Advantages First Time Home Buyers Must Avail in India

One needs to find a professional real estate agent or look for a property within their social circle. It is also important to be mindful when choosing a house. It should be a space one can see themselves living in for a long time. Don’t forget factors like the commute to the office and the convenience of the family members before deciding on a particular house. And most importantly, choose a housing loan that fits the budget and offers affordable home loans interest rates. Tata Capital, for instance, offers home loans for up to Rs. 5 crores at an interest rate starting from 9.25%. 

Buying a home may seem cumbersome initially. But the joy of moving into the dream home is unexplainable. Being prepared and choosing smart ways to save can help immensely in the process. And most importantly, choose a home loan that aligns with the requirements.

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