When you think about buying a property, the first step includes planning a budget. There's one thing that a first-time buyer must remember, i.e., the difference between what you can buy and what you can afford.
Buying a property is a dream of many individuals, of which only a few are able to make it come true. This is because financial planning for home buying is a daunting task that needs to be done before buying a home. In order to bring clarity, we bring you 5 important points you need to consider when planning a budget for home buying.
1. Your monthly household budget
For many people, buying a home is a massive financial stretch. So, when planning to pay for a house, you have to clearly understand your monthly budget to figure out the scope of reducing it. Planning a budget includes a huge sacrifice, more like keeping the expenses of 6 to 12 months aside in order to meet the unfortunate crisis. It tends to take you and your family some time to adjust to the new lifestyle of cutting expenses. Therefore, planning a budget for the home-buying process takes a year and sometimes even more.
2. Calculate the maintenance cost.
When buying a property, you need to calculate the maintenance cost for the property in which you are going to invest. For example, some people prefer to buy an apartment that offers luxury amenities like a swimming pool, gym, etc., which would require extra money to pay for all-year maintenance.
3. Check your CIBIL score.
Your CIBIL score is calculated on your payment history of paying your EMIs on time and your credit mix (secured and unsecured loans). Checking your CIBIL score would give you an idea of how much you can truly afford. The chances of you receiving loans and credit are low if you are just at the beginning of your career.
4. Look for the best home loan provider.
If you are planning on taking a home loan, don't just jump at the first offer. Instead, conduct additional research and compare multiple loan options to land a deal that works best for you in the long run. You have a family, a career, and a life ahead; depending on that, make a wise decision so that you won't regret it later.
5. Check the real estate market and then prepare for EMIs.
Every market has ups and downs, and so does the real estate market. This is why it would be wise of you to make decisions keeping in mind the market conditions. Check for forecasts online and talk to experts so that you don't regret your home buying decision. Once you are assured, you should start preparing for a down payment. Ideally, it would be best if you considered paying 40% of the total property value as a down payment and then have savings for at least 6 months of EMIs so that you can tackle any unforeseen emergencies.
Buying a house involves many steps, out of which the very first and most important step is to plan a budget. While planning a budget, you just can't see the comfort level of yourself but of others too. However, with the right planning, budgeting, and patience, you will be able to make your home-buying dream come true.