Getting a home for you and your family is one of the biggest achievements you could ever boast of and remember for a long time to come. In this respect, it is very important to have a long-term planning and some amount of financial preparedness. Such preparations invariably include saving and accumulating funds not only for the down payment but also for repaying back the home loan that you had taken. So, it is important to keep a few things in mind while intending and planning to buy a new house.
- Research: Conducting research is one of the most important things one can possibly do when it comes to making huge financial decisions, especially when that involves buying a new house. It is essential to know the nitty-gritty of real estate conditions, the fluctuations of real estate prices as well as various home loan schemes. Ideally, when it comes to searching for home loans, you should apply filters to your search with low-interest home loans to give you the best choice to make. You should be aware of the formalities and procedures with which you can apply for a home loan. Given that this is the age of the Internet, it is easier to get a list of housing loans online, as well as relevant information on the real estate scenario at a particular point of time. Usually, banks sanction up to 70-90% of the total amount of buying home. One must decide wisely about the apt loan scheme that fits well in terms of the EMI amount and the tenure of repayment. The effort should be more towards maximizing the payable amount as a down payment from the bank, which will result in minimizing the EMI amount.
- Stash It Up: As per the stats, the Real estate and property prices in most of the Indian cities are on the boom. So, it is best to start saving up money early so that you are able to own the mandatory amount of money by the time you are planning to buy a home. Preferably, emphasize on high growth methods of investments, like equity funds. It is better to compartmentalize your investments as different kinds of investments such as you should keep your investment for buying a new house separate from, say, your financial goal for retirement planning. Once you have got the loan amount in your hands, you would be able to siphon a certain sum for the sole purpose of down payment thereby enabling you to save a hefty sum of money over time. In this manner, not only you are paying off the repayment of your home loan but also you are able to make a very judicious use of the money you have saved and invested for this purpose.
- Consolidate Your Power: However, before you are able to make an actual down payment of your loan amount, it would be highly advisable to move your funds from equity to safer debt instruments. Depending on the amount of time you’d have in your hands, you can opt for either an ultra short-term bond fund or a regular short-term bond fund. This step is important as it becomes easier to transfer the necessary amount in the form of down payment from these funds. Once you start paying your loan repayment amount, you ought to keep a part of your fund for expenses that are related for buying your house, such as registration fees and procuring furniture and other kinds of decor to embellish the interiors of your new home.
Above all, it is very important to remember that you should not empty the contents of your bank account for the sole purpose of buying a new house. It is more than essential to maintain adequate amounts of liquidity (i.e liquid cash) in order to cover any kind of unexpected contingencies or sudden financial events that might come your way. Buying a new house, therefore, involves not only the use of one’s intellect and common sense but also immense patience and careful allocation of financial resources on your part. This makes the house buying experience a smooth and a happy one in the end.
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