We’ve got your back with some essential financial aspects to consider.
When you put together years of hard work to buy a home of your choice in the most prime location, whether it is a small cozy 2 BHK or a luxurious 3 BHK apartment, there is an important stage in planning a new home that must not be missed. Undoubtedly it is, creating a well thought out financial plan to buy your dream home. This phase could seem to be the most tedious of all tasks because you’re constantly trying to make one end meet with the other. All the same, it is better to consider every financial aspect before diving into a decision to buy a home. This will even help keep you away from running into debt trying to fulfill your dream! That is why we have listed below a few of the most important thought driving aspects of financial planning you need for a new home.
1. Review is a must!
Good financial planning for buying a new home must always begin with doing a thorough review of all your current financial obligations which include outstanding loans, insurance payments, etc. This will give you a clear idea of your actual income and how much money you can afford to spend towards buying a new home. Also while you review your current financial standing, you will be able to figure out your mode of funding for your dream home.
2. Budget your buy
The ideal way to budget your buy will be by considering your monthly income, savings and your expenses. When it is said that the DI (Debt-to-Income) ratio should only be a maximum of 0.28, it is necessary for you to work out the budget accordingly, based on your income so that the DI ratio does not exceed the mark of 0.28. While preparing the budget for our new home be it a 3 BHK apartment or a luxurious villa in a prime location or a property in theoutskirts, it is extremely important to account for the hidden charges such as registration, stamp duty, maintenance etc.
3. Pick the right location & builder
While picking your favourite location to buy a home, neither should you quickly zero in on a property situated in the outskirts to reduce the cost, while compromising on connectivity, nor should you pick a house located in a prime location with sky rocketing prices that is in the most congested part of the city. The perfect location for your new home will always be one that is well balanced and one which brings together a lot of aspects for a comfortable lifestyle like safety, serenity, proximity to markets, schools, public transport, locality, etc.
Choosing the best builder to invest with must be the one factor you pay maximum attention to. This requires you to do a thorough background check of the builder, their record of successfully completed projects, delivery record, quality of construction, rate of appreciation of previously developed projects, etc. It is also important to ensure that the legal documents associated with the property you wish to buy are in place, without which the sale of the property is incomplete and would result in an utter loss of your hard earned money.
4. Choosing the right loan
Once you understand the mode of financing your new home after a detailed market research, you will arrive at a set of options available for loans. It is important to negotiate well with the banks to attain the lowest interest rate, which will in turn save you a lot of money in the long run.
Some essential parameters in mind while choosing the right loan is, the loan amount you are eligible for, the interest rates, processing of loan with minimal fee, rate of EMI, etc. Also you will have the option to choose between the floating interest rate and the fixed interest rate. Once the loan amount is finalized, you must consider the amount you’re willing to put as down payment. Typically, these range from 15 to 20% of the property value and will offer the bank confidence with regard to your credibility. You can also choose to take a loan with zero down payments, but this will result in an increase in your monthly EMIs which in some cases can go out of hand.
5. Ensure a consistent income
One of the most important factors to ensure especially while deciding to finance your home through a home loan, must be a consistent flow of income. Your income should be sufficient enough to meet the monthly EMs and the overall expenses of your family too.
6. Track your imminent income
It is always important to keep track of incomes that are expected to flow in the coming years which include fixed deposits (FD), recurring deposits (RD), Employees’ Provident Fund (EPF), Public Provident Fund (PPF) or even inflow of money from selling old properties or assets. This could help you take the plunge of buying a home without a second thought.
7. Keep your savings safe!
There is really no point sweeping your savings clean to buy your dream home! When all our lives are riddled with uncertainties, it is always important to be prepared for an uncertain future. This means you must ensure that your savings are kept aside for a rainy day. Especially those who opt to finance their homes with a loan must always have enough savings to back them up in case of an emergency situation. Savings can be in any form, like jewellery, properties like plots/houses which could be mortgaged or sold when financial crises arise.
Behind the coloured walls of your dream home, lies an endless list of financial aspects that you need to consider to make living in your new home absolutely tension free and one that fills your heart with pride. Always ensure to look deeper into every aspect that could possibly help you achieve your dream faster. One thing to always keep in mind is to associate with one of the most trusted builders –Kalyan Developers to make your new home a real dream come true.