Home Buying Tips: Millions of people in India would like to have a house of their own, where they can live and which they can decorate as per their wish. Many people start doing financial planning for this from the very beginning. However, before you take any step in haste, know whether you are ready to buy a house right now or not. Let us know about those things which you have to take care of while buying a house.
Your Savings
Your savings are the key to buying a house. How much you save every month plays an important role in saving enough for your home. Experts recommend that you should save at least 20-30% of your income every month. When you take a home loan, the financial institution assesses you based on your income and employment and whether you can repay the borrowed amount in future or not.
Fund for a down payment
Apart from the amount received from the Financial Institutions, you have to pay them some amount as a down payment. Before giving any kind of loan, they see how much your ability to repay the money is. Most financial institutions require a down payment from you. This money is 10% to 20% of the cost of the entire property. Understand it in such a way that suppose you want to buy a property worth Rs.30 lakhs, then its 20% down payment will be Rs.6 lakhs. The higher the down payment, the lower will be your EMI and loan.
Can you pay the EMI?
Suppose you have taken a home loan of Rs 50 lakh for 20 years at an interest rate of 9%, then your EMI for this loan will be around Rs 45,000. If you are unable to pay this EMI for 20 years, then there is no point in pursuing the decision to buy a home. Because, if you default or delay your EMIs, your entire budget will come crashing down. Therefore, you should buy a house only when you have enough money apart from regular expenses.
