Owning a house remains the middle class family’s biggest goal. Time was when you couldn’t even dream, of buying a house till you were into your middle age. These were days when years would be spent stashing away money for 4 walls and a roof – No longer. The Market is flush with lenders tripping over each other with offers of loan at competitive rates, which bring your dream house within reach. The best time to buy a house is when you are young, when you have enough time left to enjoy that home and see it grow as an investment, to live at least half your life with the confidence that comes from owing property. And it can be done.
Advantages of owing a home
- Provides a sense of security
- Builds equity
- Provides stability
- Is an asset you can fall back on in times of need buyers
- It is easier to buy property today, owing to stability in prices and tax benefits that can accrue to you by investing in housing
- Real estate fetches an 8-10 per cent annual return. Therefore, appreciation is guaranteed over a period of time.
- Gives you a free hand to make alterations in the property.
- You are not dependent on the landlord to maintain the property.
1 The Budget
- Assess your post tax monthly income, Deduct tax saving contributions. Ditto for other earners in the family.
- Provide for credit card debt and other loan payouts.
- Provide for monthly household expenses
- Now, set aside around 5% for contingencies
- Add up your savings you will need to put down your contribution of 10-15% as Housing Finance Companies will fund only between 85-90% of the property value.
2 The Loan
- Screen lenders on total financing cost and convenience.
- Get pre-approvals from shortlisted lenders.
- Check out property fairs for better rates
- Check if your employer has a tie-up with a lender, corporate discounts can lop off more than 1% in interest alone
- Today, lenders are vying for your custom, so play them hard against each other for the best bargain.
- Get a list of pre-approved properties from lenders. Borrowing will be a breeze if the property you zero in on is on your lender’s list.
3 The Search
- When you go house-hunting, you’d like to consider;
- How far you’d be from work
- How far you’d be from your kids schools
- How far you’d be from reliable medical help
- The quality of civic amenities (water, electricity, waste disposal etc)
- How accessible social amenities like markets, clubs and parks are of course, the ideal in the above terms may not match your budget
- Now you want to match your budget with your requirements and what’s available
- And make the necessary trade-offs
- To know what’s available, you will scour the advertisements ask friends and neighbours, and may want to check out property fairs
- Once you have finalized the projects check the past record of the builder and visit their completed projects.