Financial Aspects to Consider Before Buying a House

Financial Aspects to Consider Before Buying a House

Having a home in your name is a dream come true for many people. In a country like ours, it is a source of pride for many and even a source of income for a few. People tend to invest their life-long earnings in this one decision. Therefore, it is important to be fully prepared before taking such a decision. While buying a home, there are several key financial aspects one must consider before making such a commitment.

PR Estates, having helped over 500 families find their dream home, is well-versed in this area. Keeping Bilaspur real estate in mind, we have compiled a comprehensive list of factors that you must consider:

Budgeting:
Perhaps the most crucial part of buying a property is deciding on a budget. It is easy to get influenced by others, which is why it is important to consider all the practical aspects of buying a property. For this, consider your annual income, savings, family expenses, existing debts, and other obligations. We recommend that, while deciding the budget of your house, it should not cost more than five times your or your family’s annual income.
Interest Rates:
Usually, people are hesitant to apply for home loans, fearing high interest rates and approval formalities. However, it’s better to secure a home loan and resort to paying the interest than borrow money from known individuals at fluctuating interest rates.
Credit score:
Your credit score will indicate to banks if you have a steady cash flow and that you have been steadily repaying borrowed money. It is recommended to keep the credit score above 650, which is generally considered good. A healthy credit score will help you secure a loan not only easily but also at better interest rates.
Down Payment:
The down payment refers to the percentage of the total cost of your home that you pay directly. We suggest that you have at least 20% of the down payment ready. It seems like a heavy price, but 20% of the minimum down payment implies a lower interest rate and a lesser financial burden in the future.
Additional costs:
Apart from the down payment, you should also have the registry fee and stamp duty fee saved with you. In India, every region has a different scheduled fee, so you must confirm the rates and save that money accordingly.
Job stability:
Evaluate your current job status and future career plans to decide how much further you can go in terms of budgeting. A secured job will not only complement your credit score but will eventually ease the financial burden.
Future expenses:
Buying a home should always be done with a long-term vision. This vision should include your future expenses, EMI, home maintenance, and any unexpected expenses you might incur in the future.

“Don’t wait to buy real estate, buy real estate and wait.”

Will Rogers, vaudeville performer and actor

Conclusion:

It is advisable to consult financial advisors and real estate experts to ensure that you have covered all aspects of financing. PR Estates houses a team of in-house real estate professionals well-versed in market trends and banking formalities. You can get in touch with us to get a customised consultation.