10 Tips to save money for your dream flat in Mumbai

Mumbai is the city of dreams but being able to afford your dream home in the city may take some clever financial planning. Here are a few tips to save money even as you buy your perfect apartment:

Fix the budget

One of the most important aspects of planning to buy a house is fixing a budget. It is quite common for home buyers to overshoot their budget and to struggle with finances at a later date. Look for hidden costs (such as the cost of car parking space, building maintenance, registration, etc.) that may not be revealed in the advertisement and factor in furnishing expenses before you commit.

Look for the right project

Patience is one of the key elements when it comes to buying a flat or an apartment. There are numerous housing projects in Mumbai that look attractive. Once you settle on the locale or area that you want to live in, look for projects that fit your budget and needs at the same time. Do not be in a hurry to invest. Studying the market will reveal the perfect buying opportunity (real estate dips) which will save you a lot of money.

Opt for the right home loan

Banks and financial institutions are quite keen on offering home loans these days. You will need to do your research before signing the dotted line. A lending institution will charge you a processing fee, consultation fee, mortgage registration fee, and also may choose to impose a pre-payment penalty. Ask about these before you find out the costs you are likely to bear. Loans come with tax benefits; do avail of these. Be certain if your bank will charge you a fixed or floating rate of interest. Making a wise choice when it comes to the right loan is likely to save you a lot of money.

Pay as project develops

Look for projects that allow you to pay the developer in phases. This will not only make the developer accountable for timely completion, it is also likely to save you a great deal of interest on your loans.

Power in group buying

There is great power in collective buying. This is not only true when it comes to retail buying, but also in case of real estate. You may want to consider joining hands with friends, siblings, or even like-minded colleagues who are looking out to buy apartments. Approaching a developer as a group can get you major slashes in the asking price. The prospect of selling a number of apartments at a go makes the deal lucrative for the developer, who will then be willing to knock off the price (often well below market value).

Value for money

Be it low budget flats in Mumbai or high-end projects, always consider the value for the money you are likely to spend. This may include a number of factors such as resale price, presence of amenities, and location of the project. If, for example, you are a dedicated gym goer, the presence of a gymnasium or swimming pool in the project is likely to save membership costs once you move in. Do consider the proximity of the apartment to your place of work or your child’s school. These are likely to determine commutation costs. Settle for a place which offers great value for your investment.

Avail of government schemes

‘The Pradhan Matri Awas Yojna’ and numerous other schemes subsidise the cost of housing projects. These schemes may be central or state government schemes. Learn more about your eligibility and avail of any schemes that may allow you to breathe easy by lowering your investment cost.

Rent vs. EMI

While this may not be a tip to save money for your dream flat, it is certainly something worth considering before you buy a flat. Work out the rent vs. EMI cost. A property is an investment that will only fetch you profit when you sell. The expenses such as EMI, etc. should be weighed against the rental expenses. Then again, buying a flat is asset creation while rent is a recurrent expense.
Location: Mumbai, Maharashtra, India

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