Buying your first home? Here are five things to keep in mind

Supported by stable incomes, rising aspirations, and improved access to home finance, first-time homebuyers are making bold, informed decisions while buying home

Home ownership is always a significant milestone, and the decision carries even greater weight for first-time homebuyers.

Fortunately, these days, the evolving credit market is making homeownership more accessible, with ample financial support from housing financiers, banks, and non-banking finance companies (NBFCs).

Supported by stable incomes, rising aspirations, and improved access to home finance, these buyers are making bold, informed decisions that are reshaping demand in both traditional and emerging urban corridors.

The excitement of owning your first home is unmatched. However, navigating this process requires careful planning and clarity. Whether it is budgeting or location selection and legal checks, every decision counts.

Here are five key things a first time homebuyer should keep in mind:

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Ashish Mishra

Prinicipal Correspondent|moneycontrol

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Rent or Buy?

Renting looks easy and does not put much burden on the pocket. However, in India, buying a home also has an emotional connect, other than just being a real estate investment.

According to data from property consultant ANAROCK, between 2021 and 2024, prices have appreciated faster than rental income in several micro-markets across the top seven cities.

The data finds that capital values in key micro markets of the top seven cities -- Mumbai, Delhi NCR, Bengaluru, Chennai, Hyderabad, Kolkata, and Pune -- have grown significantly between 2021-end and 2024-end, while rental values in many micro markets have appreciated less than the overall capital value growth.

The clear divergence between capital appreciation and rental growth in these areas indicates that homeownership is becoming more lucrative in key markets where property values are rising faster than rental yields.

Location

Vineet Dawar, President (Sales & Strategy), Elan Group, says that instead of traditional city centres, these days the first-time homebuyers are drawn to growth zones driven by infrastructure. Many people are turning to high-yielding micro-markets in each city across the country.

He emphasizes that buying a first home should be driven by key considerations such as the credibility of the developer, location, amenities, functional layouts, construction quality, and investment potential.

Experts say that micro-markets that offer a better balance of affordability, accessibility, better appreciation and smooth connectivity should be considered.

Financial foundation

Before embarking on a home-buying journey, homebuyers should thoroughly assess their current financial standing. This includes income stability, savings, credit score, and capacity for a downpayment. In India, home loans generally finance up to 80 percent of the property value, making a solid savings crucial for the remaining 20 percent and additional expenses, such as registration and stamp duty. Homebuyers should also compare offers from multiple banks and NBFCs, and choose a lender that offers competitive rates with flexible repayment options.

The festive season (October–December) often brings special offers, making it an opportune window for first-time buyers.

Do a thorough legal check and evaluate the builder 

Buyers must confirm the property's clear legal standing prior to making a purchase. This includes confirming encumbrance certificates, RERA (Real Estate Regulatory Authority) registration, title ownership, and approvals for environmental clearances and building plans. To find any potential risks or construction flaws, choose a professional home inspection and, if necessary, consult a property lawyer.

Today's homebuyers are putting design, community, and long-term liveability above price and location. Projects with modern layouts, integrated amenities, and flexibility are more likely to survive for a long time.

Market observers say that first-time homebuyers have clear priorities, i.e. thoughtful design, seamless connectivity, and a strong sense of community. Homebuyers should thoroughly evaluate the developer and the project they are willing to invest. They should also physically check the past projects of the builder to see if those were delivered on time.

Opt for pre-approved or RERA certified projects

The Real Estate (Regulation and Development) Act has made buying under-construction properties more transparent and secure. Opting for a RERA-approved project ensures that homebuyers are protected from delays and price escalations.

To significantly reduce potential risks and avoid the uncertainty of construction delays, prioritise properties that are either ready for possession or part of pre-approved projects. While under-construction properties might initially seem more budget-friendly, the possibility of prolonged delays can create financial pressure, especially if you are managing both rent and Equated Monthly Installments (EMIs) simultaneously.