Buying a home is one of the toughest decisions for the middle-class people in India. This is so because many couples opt to buy a home under the family or peer pressure which is a wrong notion. As a result, you have to suffer and the reason behind this is the ignorance of the most important term which is financial planning.
Also Read: How to Plan to Buy a House
Having a proper financial planning before buying a home will make your life simpler. As wisely said by Benjamin Franklin, ‘A penny saved is a penny earned’.
It is sensible to have backup plans for the unseen circumstances as our life is erratic.
Here are some of the tips which can help you in financial planning for buying a house in India:
Before buying a home on a home loan, it is advised that you should clear of all your current loan amounts. It becomes difficult for middle-class people to serve two loans simultaneously. By doing so, this planning will help you in improving your CIBIL score. Further, it is also suggested that you should increase your down payment (say about 40%) to help you lessen your loan burden.
Word of wisdom: Don’t forget about the registration cost and stamp duty!
It is being noted that people are focused on keeping a lower EMI instead of fixing it. As a result, they easily get lured towards advertisements which offer less EMI plans. But the catch is, the lesser the EMI, the higher is the repayment period. This will only make you pay additional interest. So if the schemes are smart, you have to be smarter!
Word of wisdom: Make sure your payment is less than 30% of the salary you take home.
Decorating your humble abode is a pride and fascination for many. And why not? You earned it!
Here too, a proper planning and spending a good time researching in buying house furnishing items will be of great help. A fixed budget is what you need. Overspending will only give youand your family, unanticipated financial shocks.
Word of wisdom: It is advised not to buy any household articles with customer loan as it may increase your loan amount to about 15%. Make sure you’ve pre-planned your furnishing budget.
It is quite obvious that you should have job stability if you are planning to buy a home. There is a lot you have to think about. Paying your EMIs regularly needs a job stability & security. If instability is a part of your work sectorand recession is anticipated, it is always better to be vigilant about your expenditures and investments.
Word of wisdom: It is advised to keep a 3 months EMI in reserve which can be handy when the financial crisis hit.
Life is unpredictable. Unexpected expenses such as family functions, sickness, education expenses, natural calamities etc. can dawn on you; hence, it is advisable to be prepared with an emergency fund. Your family is your one and only, and no financial crises should make them suffer. Your savings can be cleverly invested in short-term mutual funds or bank FD’s as this is easily liquidated.
Word of wisdom: Focus on protecting existing assets instead of creating new ones.
None of us plan to fail, but we fail to plan…
Before buying a home you are given multifarious suggestions but it’s up to you what you choose and how you plan. Don’t just go with the flow; think then act.
So how do you plan to buy your home? Relax. Experience is at your side.
Avant Infra’s mega-successful residential project Avant Heritage is where your investment will grow multifold. Located in Mumbai’s profitable suburbs, Jogeshwari (E), we offer you plush homes, with great amenities which are no less than a landmark, just under a crore!
If you need any further convincing, read: Why You Need To Invest in Avant Heritage