How To Save Money While Buying A House In Mumbai
Mumbai, India’s financial capital, is widely known for its most expensive properties. The real estate market in Mumbai is one of the world’s grandest and most diverse property markets. However, buying a 2BHK in Mumbai can be far off dream for many without proper budgeting.
The magnificent, spacious residences attract buyers interested in the property market. But why is property investment undeniably expensive in Mumbai?
While housing prices include construction and land costs, the demand and supply also seem to influence the property rates. Since buyers also tend to focus on a plethora of other factors such as easily accessible locations in the suburbs with proximity to educational institutions, medical facilities, markets and grocery stores to facilitate easy living.
Hence, while planning to buy a property in Mumbai, an individual must assess the main reasons for the extravagant purchase. So, how can an individual save money while buying a house in Mumbai?
Given that owning a house, primarily located at the heart of the city, is an amazing feeling, one must bear in mind that there are always several risks attached to investing in the property market. When you plan to own a house in Mumbai, an individual faces two options: purchasing a newly-constructed property directly from the builder or investing in a resale property.
While both these options have benefits of their own, buying a new property directly from the builder could help save some money, owing to payment schemes and low EMI options, quicker possession of the house in most cases, and saving on brokerage rates. Choosing the best builder in Mumbai is also very challenging now a days.
Home loans offer some tax-saving advantages that can benefit buyers, as the interest on a home loan is tax-deductible. There are various types of housing loans, and a few tricks to ensure higher home loans are:
Co-applying for a loan with a woman as the first borrower is a great trick. First, it can lead to a decrease in the buyers’ interest paid.
In the case of a joint application for a loan by employed spouses, the eligibility for the total loan amount increases. Co-applicants are also eligible to apply for a tax deduction of a total of up to Rs. 3L against the principal amount that they will have to repay.
Selecting a Bank with Low-Interest Rates
Home loans have become increasingly beneficial and readily available to individuals, with almost every financial institution offering attractive rates. In addition, research suggests that the number of banks that provide reduced interest rates, varying from 0.01% to 0.15% for 15-25 years, to women seeking loans. It can lead to a substantial amount of savings over the years.
While the original offer from the realtor or builder might seem excessive, it is advisable to inquire about other options, such as the property rates of other apartments in the neighbourhood and building amenities and facilities provided within the property rates. While the original offer can be negotiated, the potential buyer must make sure to quote a reasonable price for negotiation to avoid letting the property slip away.
Investing in Under-Construction Properties
While a ready-to-move-in apartment sounds attractive, fully-constructed properties are higher priced than those still under construction. However, while looking at investing in an under-construction property, buyers must check the RERA registration and the history of the developers to avoid any future hassle.
Effective Financial Planning
Early and adequate property investment planning can help buyers save a considerable amount of money as they have the opportunity to monitor the early down-payment offers that can help avoid dipping into their savings in the future.
Better Financial Planning & Investments
A house can seldom be purchased from a one-source income. Hence, a buyer should be focused on growing the value of money by investing in alternative streams of income such as Mutual Funds, which can help accumulate a higher sum of money for property investments.
Equity Mutual Funds
First, figure out what are the investment options in India that can be beneficial in the long term.
For example, some several investment options such as fixed deposits, stock markets, and post office schemes, buyers can consider investing their money in equity mutual funds. It’s a better option than putting it in a savings bank account to ensure a better investment return.
Assessing the Right Time for Investment
One of the essential tricks to investing in real estate is assessing the right investment time. And studying more on the best ways to start investing in other areas. Buyers must consider their future expenses, including day-to-day expenses, rentals, if any, and interests to pay on property loans. If not budgeted, expenses can skyrocket in an expensive city like Mumbai, which is why buyers must carefully evaluate the property rates for years before they finally decide to invest.
Avoid Risky Investments
While choosing to invest in a house, one of the most common mistakes that buyers tend to make is purchasing a property to sell it later in hopes of enjoying higher profits and paying off interests on housing loans.
While this can work for many individuals, it can get complicated for those who pay monthly interest on their loans and have other expenses to consider.
There is also always an unforeseen chance that the property market might unexpectedly crash. It is, thus, wiser to invest in a property that fits well within budget.
The Bottom Line For Buying A House In Mumbai
The geography, robust infrastructure and constant migration of individuals from other cities have led to a massive increase in the demand for residential properties in Mumbai. This ever-rising demand for property in the city has led to a rise in real estate prices that has caused developers and property sellers to quote higher prices, especially in the suburbs.
Hence, while property investment in a metropolitan city is a dream for most, effective financial planning can help one invest in India’s most expensive housing market. Investing a flat in Mira Road, holds great potential for yielding favorable financial returns in the future, thereby making it a highly valuable investment opportunity.
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