Plan To Buy Home In 2018? Here Is What You Should Be Doing Now

Have you been planning to buy home for a long time, but, couldn't take the decision? The coming year is the year you should become a home owner. Property prices are already floating near the bottom, and are likely to bounce back once developers get acclimatised with the Real Estate Regulatory Act (RERA) era.

The uncertainty with respect to delay in project possession and fly-by-night developers will now be ruled out and only the RERA-compliant projects will be offered to public in the market. So, your rights as a property buyer will be secured.

That makes for the biggest reason why you should not keep sitting on the fence anymore. It is a buyers' market for a few more quarters. If you are on board with this perspective, here are the four steps you should take to prepare yourself for your big decision in 2018:

Check your credit scores

As the very first step, you should get your credit report from an agency like CIBIL (Credit Information Bureau India Limited). You can submit an online application on the company's website for this purpose.  

To get a home loan, your credit score should be above 700. However, if your score is in the range of 750-900, banks will approve your home loan application in no time.

Close other loans

Before you think of taking a home loan, which usually counts in millions of rupees and could be the biggest loan you have ever take, try to close the other loans. Generally, people take personal loan and auto loan before reaching a stage to take a home loan.

It is always better to pay these loans first. This enhances your eligibility to take up a bigger loan. Also, a good track record of paying the past loans improves your credit ratings quite substantially.

Check your credit card usage

Credit rating agencies also examine the amount outstanding towards credit card payments. Any defaults in payments or penalties impact your score. Remember that this one of the 'high-impact' criteria for credit rating companies.

Do not buy new credit cards, and limit the number of credit cards so that you can use them carefully and manage the payments in time.

Organise all the documents

When you apply for a home loan, the bank would ask you for certain documents. This include:

• Permanent Account Number (PAN) card
• Form 16 or income tax (IT) returns for the past three financial years
• Bank statement of the past six months
• Salary slips for the past three months
• Appointment letter (optional)
• Address proof; essentially from a government-issued document such a driving license, voter ID card, passport, public sector bank account statement, etc.
• Photo ID card (PAN card, driving license, voter ID card, passport, etc.)
• Thee-four passport size photographs

If you don't have any of the above credentials, start arranging these documents now.

Get a pre-approved loan

A pre-approved home loan can get you in a better position for negotiation with the property seller. You can insist for a better deal in return for a quick disbursal that the seller can expect. Needless to mention, you must have the down payment amount in the range of 10-20 per cent in your hand. The remaining value could be financed through a home loan.