Buying/Owning a home is everyone’s top dream. People often believe in settling in the life and then going ahead with building/buying a new home. But, this doesn’t hold true these days now. If people plan properly financially, then they can own a home at a very young age as well.
The advantage in buying early is if you have taken the loan, then you can consider the long repayment period. The longer you pay the loan, the longer you can claim deductions under income tax as well.
Below are few tips on buying a home at a very young age:
1. Disciplined saving: Even when the bank is funding the amount to buy the house, the margin money has to be covered. 10-20 % of the margin money has to be invested by the buyer, only the rest will be funded by the bank. So, in order to accumulate the amount of margin money, start cutting the extra expenses. Save as much as possible, stop splurging the money, bring down the monthly expenses gradually.
2. Researching: Research the house that you want to buy. Do not buy in hurry, do not buy the houses that are close to some other place or that looks attractive. Write down the musts that you need. How many bed rooms it should have, should it have a balcony, should it have a bigger living room, and go on finding the house only having answers for all these. People often go ahead and buy without planning and regret later.
Existing Loans/Debts:You should clear all your existing loans or debts like car loan, personal loans etc before buying a house on Home Loan. It is next to impossible to serve 2 loans simultaneously considering huge liability of Home Loan. Secondly by clearing these unsecured loans you will improve your CIBIL score before availing Home Loan.
Six Months EMI as Reserve: Understand the market condition before buying a house. See, if the altering market condition would affect your monthly payment at all. If the answer is yes, then you should postphone the idea of buying the house. You should at least have six months emi in your account ahead of the repayment period. Do not consider moratorium period as easy. I strongly recommend you to credit the amount in it if possible as well.
Budget for Interiors / House Furnishing:Do not over spend on interiors, though we understand that the look and feel would give some satisfaction, it should be a burden on your repayment. You can do the interiors any time after you buy the house, but once the bank loan slips to NPA, it is difficult to come out of the loop of selling from bank.
Buying the house on bank loan:I have seen people buying the house by paying all the amount as well. Do not do this, buy doing this, you pay hefty. Taking loan would help you bring down the tax amount, having emergency fund in account and many other things. Loan is not considered a big liability anymore in the society anymore as much as it was earlier.
Insuring the loan: Always buy a term insurance plan, in the case of an unfortunate death, your family members should not suffer from the repayment or the burden of EMI.
Though I do not believe that the people who have taken loan become default, then the SARFAESI gets initiated by the bank as soon as possible. They take the possession and go and finding the suitable buyer to buy the home. So, it is always good to know how SARFAESI works and how to come out the loop and everything.
Together!!