Buying Home…This is most of our dream. It needs huge of amount of money and it eats most of our savings. However buying home or renting home which is the best option is depends on person to person. We Indians see our own home as emotional attachment. These are the tips before you buying your dream home.
1. Fix your budget for home
As buying home is the biggest purchase we do in our life time, so ensure to keep a budget. Always buy a home which is 4-5 times of your annual salary. If you are earning 10L per annum , then you can look for 40L to 50 L property if you depends only on your salary and assuming you have no passive extra income. Incase you purchase more than that , you must need to have huge amount to pay upfront, if not you need to pay more EIM every month, which is not good for your financial health.
2. Don’t get attracted by offers which builders are pushing us.
We are seeing many advertisements saying that today is the last day to get free modular kitchen if you book flat or get car with flat booking etc. Don’t get attracted by these offers. First decide location which is suitable for you and search for projects . Visit the property shows and try to find out the price in that area many builders. After that visit that builder previous ventures to know the quality of construction which is important than the offers by the builders to push their projects.
Once you decide the venture, visit the banks and compare the interest rates. Also check for processing fees and any penalties on part payment or pre payment charges. Once you deiced the banker , then you can apply for loan which is fixed or floating based on the current situation. As of now interest rated are going to come down . So its better to take floating rate than fixed. So take a call based on market situation.
4. Don’t keep more than 40 % of your salary as an EMI.
Keep in mind that EMI should never cross 40 % of your take home salary. If you are earning 1L then keep 40k as EMI and use the rest of amount for your house monthly expenses and mainly to reach other financial goals like retirement planning and child education and children marriages.
5. Legal verification of your property
This is quite important to verify the property documents by lawyer. These days we are seeing many of building don’t have LRS (Layout regularization )and BRS (Building regularization scheme) paid for them. So if you take that properties , you need to pay extra money from your packet make it regularize legally. So dont believe brokers/agents blindly, it’s always better to take advice from lawyer.
Hope this tips will be helpful for you while buying your dream home.