Financial Planning For Buying A House In 2024 (Expert’s Advice)

 

Why Right Financial Planning For Buying A House Is A Must?

64% of the population in India was seeking to buy a house in India in 2020. And in the next year, it reached 82%.
If you are also one of them then you are at the right place now. Because inappropriate financial planning for buying a house in India may make you regret it in the future.
If you feel like you have already missed the opportunity then you need to know this fact:

“Between 2023-2028, the Indian real estate market is expected to have a (CAGR) growth rate of 9.2% as per the report”

However, the real estate industry has already hinted with the dramatic changes in the past few years. Eco-friendly development, gated communities, landscape planning, addition of facilities, tax benefits, lower mortgage rates, etc. are some of the latest developments in the real estate sector. So, now is the right time to buy a house with the best financial planning to effortlessly manage the necessary factors.

5 Advice For Financial Planning For Buying A House

Considering the affordable options, doing complete research, knowing your home loan eligibility, ways to save money, other costs, etc. are a few of the advice for financial planning to buy a house.

• Affordability: What Is Your Budget?
  Begin your financial planning for buying a house in India by considering how much you are able to afford.
  To know that you need to sort out the following factors:


• Income
  Consider your monthly income at first.


• Expenses
  List out your monthly expenses like housing, transportation, food, debt, etc.


• Savings
  Check the money you have saved for down payments & unexpected expenses.


• Clarification
  By understanding all the above factors, you can easily calculate the amount to afford for spending on a home.


• 30% Thumb Rule
  Try not to spend more than 30% of your monthly income on the housing costs like property taxes, EMI, homeowners insurance, etc.

Research: Start Searching The House Over knowing your affordability, you can start researching the latest housing market. Begin with considering the prices of houses in other cities & states, and analyze the trend there. While doing so, don’t miss out on the location, size & features of the house because these are the factors that mostly influence the price appreciation in the future.

Financial Support: Know The Home Loan Eligibility Once you find a house that is similar to your preferences then it’s time for you to know your eligibility for a home loan. If you are a salaried individual or in the past few months or years, you are banking with a selective bank then there is a chance of being pre-approved for a home loan. Typically, this lets you know the money you can possibly borrow & what is the monthly payment structure. And this will make your house-buying process effortless.

Savings: Through Monthly Down Payment Once you are planning for buying a house through a home loan then finding a possibility of saving through a down payment is a must.

Higher your down payment amount, lower the monthly EMI would be If you can save a small amount of money each month then it will reach an appreciable amount in the future. Out of multiple ways of saving a down payment, you can opt for creating a fixed deposit account, initiating a recurring deposit monthly & short-term fund investment.

Costs: Other Than Buying A House Other than the house purchasing amount, there are multiple other costs included such as home insurance, property taxes & maintenance. So, it is necessary to consider the following costs in the budget.

Tips: For The Middle-Class Group Of India Being under a middle-class section of people, you have to strategically plan the financial & practical aspects of buying a house in India.

To help you with this, we have listed the tips below to help you buy a desired home

• Choose Tier 2 & Tier 3 cities because the cost of living is comparatively lower here. You can also able to buy a large home for your estimated money.
• Choose a house that is currently in good condition. It shouldn’t require multiple repair works. This helps to save money in the future.
• Prefer buying a house that has a smaller land plot. Because it will help you to save property tax & maintenance costs.
• Buy a house where you want to live in for a longer period.
• Buying a house is one of the best ways of building wealth & security.

3 Precautions : Don’t Miss Out On This

1. Always Search For Grade A Developer Choose Grade A developers – Why? This makes you rest assured that the house you planning to buy is legal & it is constructed to achieve the highest quality standards. Grade A developers in India have access to selective expertise & they always prefer to collaborate with the best ones in the industry. The developer also offers a better customer experience, information at the fingertips, helps through loans & registrations, etc.

2. Don’t Ignore Your Preference For House Make sure that you don’t underestimate your preferences in the search for affordability. Buying a house is a kind of long-term investment, so choosing the right one with consideration of all your preferences & affordability is a must. Real estate market is so diverse, so not even finding a house that doesn’t match your preferences is impossible. So, try to explore the latest real estate trends across the states in India. For ex. start with properties in Mumbai, Bangalore, Chennai, etc. because the following states have shown a better price appreciation YoY.

3. Don’t Be Too Hurry To Buy A House With a multitude of housing options available, finding the right one can be daunting. However, rushing into a decision often leads to subpar living conditions due to a lack of consideration. To ensure a quality home purchase, take time to research reputable developers and maintain a checklist of essential features. This includes outdoor space for children to play and desirable amenities.

To Know About Thane Real Estate Development Contact Us at 022 2580 6868

What Are the 8 Effective Tips to Buy a House in India?

 

Consider the following tips for buying a house in India:

1. Assess Your Financial Health.
   Before you proceed to purchase a new home, assess your financial health. This assessment is necessary as you must remain prepared for buying a house and its ongoing expenditures. This assessment will help you to determine whether you are financially ready to invest a lump sum in purchasing a house. Here are some of the ways you can check your financial stability:


• Check Your Savings
  Purchasing a home requires considerable upfront expenses, including closing costs and down payment. You should have funds saved to meet not only these expenditures but also these will serve as emergency funds. Besides, you must keep your savings in an accessible account that provides a regular return so that you can get the funds quickly whenever you require to meet any financial needs.


• Evaluate Your Spending
  Analyse your monthly expenses, which include costs you incur in purchasing utilities, entertainment, food, etc. This evaluation will help you to assess how much you can afford to repay a home loan.


• Check Your Credit History
  You must maintain a healthy credit history and a desirable debt-to-income ratio. Lenders nowadays prefer to restrict housing expenses to 30% of an individual’s total income. Exceeding this figure can be a concern for lenders to sanction a loan. Though, this percentage may vary based on the local real estate market.
  
  Assessing all these pointers will assist you in understanding how much you can afford to buy a home. Depending on the affordability, create a budget that fits your both financial and housing requirements.


2. Check the Location
   It is important to look at the locality and location around the house. It is ideal to purchase a house in an area adjacent to a city’s prime location where the property value is not that high. Avoid buying a house in a location that is yet to be developed with proper infrastructure to avoid inconvenience in the future


3. Determine the Type, Size, and Features of a House
   Determine what kind of housing property you need – a conventional single-family house, a house with two to four units to accommodate multiple family members or other types of houses. Apart from it, ask yourself whether you are buying a house based on size or accommodation. Remain cautious because when you buy a house based on the size, the usable area does not expand in a similar proportion. Finally, you can check on a real estate website to get an idea about the costs and availability of features that are crucial for you, such as bathroom and kitchen layout.


4. Choose a Trusted Builder
   Always choose a reputable builder dealing with the construction and design of your new home. You should not get lured only by the aesthetic component of a housing property. Instead, you must also pay attention to the construction specifications and materials to avoid hassle later.


5. Verify the Resale Value
   Often property buyers do not pay heed to the resale value of a property and solely focus on its price and prime location. If you purchase a property without considering its resale value, then your investment may not be worth it, as your house's selling price will be lower than other homes in the area.


6. Know the Eligibility Criteria to Qualify for a Home Loan
   Purchasing a home requires a considerable investment. Therefore, you may rely on external financial assistance through a home loan. So, before borrowing a home loan, you must check the eligibility criteria with a home loan lender.
   
   The eligibility parameters of a home loan usually depend on your income, repayment capacity, age, and existing debt. However, eligibility criteria may differ with each lender. The loan amount you can borrow also varies with RBI regulations or different banks.


7. Analyse Additional Costs
   When you are planning your budget, you must consider additional expenses. Such costs include your property’s market value and stamp duty charged on it. To know more about them, get in touch with a Ready Reckoner to identify your valuation and sub-zone.
   
   Besides, you need professional assistance to buy a house. For that, you need to bear certain charges imposed by a mortgage broker, real estate agent, lender, land surveyor, home inspector, or lawyer. Apart from these expenses, check the maintenance and parking charges.
   
   if any Additionally, you must also safeguard your investment with property insurance. This will further help you in availing financial protection against issues with property titles, legal problems, or other damages. So, you must also keep aside some funds to purchase the same.


8. Read the Property Documents Carefully
   Another tip for a first-time home buyer is that one must carefully read and understand all clauses, implications, and penalties mentioned in a document. For example, note if there is a penalty clause for delayed EMI payments due to some circumstances, hidden charges, delivery date of the housing property, etc. Verifying all these details before signing the final agreement is essential to avoid problems later.
   
   Several individuals aspire to purchase their dream house. However, often they cannot understand which path to approach. If you are facing similar issues, follow these tips for buying a new home as mentioned above to get a clear idea.

Source: www.godigit.com