HOW & WHEN SHOULD YOU START PLANNING FOR BUYING A HOME?

Buying a home is tricky as you have to work out the payment schemes a couple of years before you actually down pay on property in India. The real estate market has a lot of offers which ease the burden of payment for homes yet you need to think in advance.

There is no fixed age or time as to when you should jump into the property market. If you have the resources, then buying a home is always a good option. Not only does it offer you a sense of belonging and security, but owning multiple homes also acts as an investment avenue. The planning bit is actually more important than simply having the desire to buy a home.

            As soon as you become independent, you should start planning for buying a home. A person’s starting salary is never too high which is why spending it needs to be careful. For instance, if your starting salary is around Rs 25,000 at age 23, then it would take you almost 7 years to be able to buy a house which costs around Rs 50 lakhs or so. To save the amount for down payment, you have three to four years almost.

There are quite a few debt linked savings schemes such as recurring deposits and debt linked mutual funds that are secure and can be pulled out from quite easily. The interest rates offered are healthy and you can save a part of your salary in them. Ideally, you should have 70 to 80 percent of your salary in equity linked mutual funds and have the rest in cash and debt linked plans.

Once you have reached a position to be able to pay the down payment and continue paying the EMI on your home loan, you should start looking around for good home loan schemes. Duration of home loans is usually 20 to 30 years and requires collateral to be deposited with the bank. You can opt for a flexible or fixed interest rate plan depending on the home loan term. The real estate market in India has been modified to the extent that some builders are offering to pay the EMI of your home loan till you possess the property and you should consider such options too. Compare the policies offered by different banks to see which one offers the most competitive interest rate for property in India.

To get your home loan processed quickly, reduce the number of outstanding uncovered loans (personal loans and credit card). Furnishing your CIBIL credit history is a good idea because banks accept it as a sign of a credit worthy customer. If your score is more than 75, then you stand to get swift approval and a good interest rate.

It is better to have a home loan approved in your kitty before you start hunting for properties as it can take a couple of months. Armed with the finances needed, you can start looking for your dream home.