The question hounds every home buyer and more so in the current situation when people are struggling to save their Lives & Livelihoods in lieu of the corona pandemic which has brought the world to its knees.
Let us first understand a simple fact that home buying is an emotional – physical need for self – for the family – for social reasons
However, I always advocate that there are certain points which one must keep in mind to check if he is financially ready and has an agreement of the family in one of the most important decisions of life
Please consider these before you make a home-buying decision
- Evaluate whether renting will suffice and satisfy your need for your purpose or whether you and your family would be happy having your own roof since it gives confidence, and a sense of achievement and keeps away from the insecurity of having to vacate at the behest of the landlord.
- Are you financially ready? Have you considered your commitments to ongoing EMIs of an auto loan, education loan, expenses of your wife, your children, and medical expenses of your parents? Does your combined income with your wife leave you with a surplus to take the commitment of home loan EMI? if YES, you surely are ready
- Please zero down on a location which is close to work close to friends and family and has an established social and physical infrastructure
- Please deliberate and finalize the accommodation and size which will fit into your budget and will fulfil your requirement
- Choose a corporate–national developer who will not fall short of a commitment to a product, quality, and delivery.
These are points every home buyer must consider before buying his home
Now the real question “SHOULD I BUY MY FLAT NOW OR WAIT”?
“The answer is first to do a financial fitness check, has the corona pandemic dented your earnings in any form whether by virtue of a salary cut or job loss or by virtue of an increment that you had expected?
Is the financial dent a cause of concern? does it require revisiting your decision of buying your flat which you had decided pre-corona pandemic had shaken the world?”
If YES (the financial dent needs your attention), you may want to keep your decision pending for some time before your finances are settled.
If NO (you are well funded), you definitely should buy your flat now.
In addition to this, I would like to table that the Govt, the developer and the banks all will try and support home buying in the current situation
Let me elaborate
Govt: The Govt needs to drive the economy and real estate industry as the industry contributes 8% towards GDP. The industry gives business to more than 250+ MSMEs. The industry is the second largest employment generator. Hence Govt will give SOPs both on the supply side and demand side
Govt SOPs on the Supply side:
- Liquidity to fund the industry which is struggling with low demand and high debt. Govt has already supported the banks by flushing in money, NBFCs and also NHB so that the industry is supported
- The moratorium for repayment to developers
- Ease in a compliance filing
- Extra time for delivery in lieu of time lost in lockdown
Govt SOPs on the demand side (EXPECTED)
- Reduction on interest rates so that home loan rate is further reduced (The interest rates have already been reduced but a further reduction is expected)
- Reduction in stamp duty for a stipulated period of time
- Re-adjustment in GST so that the cost to the developer is reduced which is further passed to the home buyer
- Benefit by virtue of further rebate on taxation considering interest paid on home loan EMIs
SOPs from the developer:
- The developer wants to offload his inventory to generate cash flow for construction hence will be more flexible and adjust with price, payment plan, and inventory so that a practical solution is made available for the buyer to make a decision
- Prices are not expected to increase in the short term so the home buyer can actually strike a good deal
- The homebuyer will be in a position to buy inventory closer to the city centre in the budget which he had allocated
SOPs from BANKS
- The banks will be proactive in adhering to the RBI guidelines in the reduction of home loan rates.
- The processing fees can be negotiated at this time and banks will be happy to adjust.
- Moratorium available for paying home loan EMIs
All in all, if your finances are in order this is perhaps once in a lifetime opportunity when the Govt the developer and the financial institution all are ready to negotiate and adjust.