Buying a home has never been easy as it is the biggest lifetime investment for many people out there. Therefore, it is always important to evaluate the minimum requirements for buying a house to avoid further delays. Purchasing a home is not a single-day task. You will have to pre-plan your dream home for years before entering it. And guess what, evaluating your home-buying affordability has a lot more in common than just identifying the salary needed to buy a house. Not to worry, simply scroll down for a quick checklist of everything you’ll need to get your hands on the keys to your dream home.
Minimum Requirements for Buying a House
Think About the Down payment
You will need to approach lenders once the cost of the house has been determined. But because lenders are lenders, they will not make a loan until they are confident in your ability to repay it. So, there is a down payment. As a down payment, anywhere from 15% to 30% of the price of the home must be paid.
Your down payment would therefore be between Rs 7.5 and Rs 15 lakh for that residence costing Rs 50 lakh. By any metric, it is not a modest sum. It’s a good idea to keep in mind that your down payment will increase proportionately as your loan balance increases.
Consider your options for raising the money required as a loan down payment. For a down payment of Rs 7.5 lakh, savings of Rs 2 lakh per year, invested at a rate of 10% for approximately 3.5 years, would be required (approx.). You can check the amount you would need to invest to raise this amount using the available internet calculators.
You can also take out a personal loan, borrow money, or pledge goods as collateral. These, however, need to be the very last choices. Personal loans have high-interest rates, so you don’t want to have to pay them in addition to your house loan EMI.
Calculate the EMIs
After you have successfully raised the required down payment, you must now deal with the important issues of loan approval and Monthly EMI in Mumbai for example. The highest recommended EMI to net income ratio is 30%. But some lenders also increase this percentage to 40%.
All things considered, whether it’s 30% or 40%, you will be responsible for paying the EMIs, so it’s critical to consider both your current financial situation and the entire loan term. Consider all conceivable situations. Is it likely that your husband won’t be working in the future? Are you looking to leave your work and pursue your own business? Are you hoping to earn a higher education credential? Or a crisis inside the family might arise. Any of the circumstances won’t affect the fact that you still have to pay your EMI.
Always Consider Hidden Costs
Down payments and EMIs are big factors that decide your house’s affordability. However, there are many more factors that also merit some consideration.
They are:
- Pay rent as well as EMI
- Cost of Interiors
- Maintenance Costs
- The cost of illiquid assets
In a nutshell, the above-given is the quickest and mandatory checklist that one needs to mark before buying a home in the dream city of India, i.e., Mumbai be it a 1 BHK apartment in Kalyan, a 2 BHK flat in Andheri or a bungalow in any corner of India,
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