Buying a house ranks high on the priority list for young couples starting their lives. It’s one of the prime milestones that most of us strive hard to achieve. But buying a home for the first time needs some careful thought and planning. This makes it a stress-free and smooth experience.
To help you achieve just that, here’s a list of five great tips to help young couples buy their first home.
1. Plan Your Budget
The first step is to understand how much you can afford to spend on buying the home. Remember, there might be additional expenses, such as moving all your belonging, small repairs or additions to the home and buying new furniture and other essentials. So, when you plan a budget, keep all this in mind. One of the best ways to move forward is to consider a housing loan. Home loans have become easy to access in India, with the best banks offering very competitive interest rates on current home loans, as low as 6.90% per annum. So, if you are taking a loan, make sure to consider the monthly EMI payments towards the loan in your budget calculations.
2. Buying a House vs. Paying Rent
To make sure you are making the right decision, compare the cost of renting a home to buying one. The amount you are paying as rent might be the same or close to the EMI amount that you would pay on the loan. You can use a housing loan EMI calculator to check this out. Would you prefer to continue to pay that amount as rent that makes someone else rich or would you prefer to use that amount to build your own investment in real estate?
3. Compare Home Loans
Home loans can be a great help in buying a house. However, you should not forget to compare different housing loans. Factors such as current home loan interests are key elements to consider while applying for a house loan. Also, check whether the bank adheres to the MCLR guidelines. The RBI passed the Marginal Cost of Funds-based Lending Rate (MCLR) guideline for banks in 2016, under which these lenders need to pass on the benefits of interest rate cuts to borrowers.
4. Plan Your Down Payment and EMIs
Another important factor while searching for a home is to plan for your down payment and EMIs in advance. Home loans require you to pay an initial amount from your own funds. This is known as down payment. The amount is usually b between 10% to 25% of the total cost of the property. Therefore, it’s advisable to start building a fund for this purpose and consistently add money into the fund. Besides, you can also use an online housing loan EMI calculator in order to calculate the potential installments on your home loan and plan for that too.
5. Work on Your Credit Score
Having a good credit score increases your chances of getting your loan approved. Credit score stands mainly for your debt repayment capability. Therefore, a good credit rating means that you are unlikely to default, which is a good thing for your lender. So, always make your credit card and other loan payments on time to keep your credit score in good shape.
Buying a home may not be easy but it definitely can be made easier with a little planning. The ease of accessing funding has already simplified the process.