This process is broken up to three main sections: budget, home loan and searching for the exact home
This process is broken up to three main sections: budget, home loan and searching for the exact homeWe help you understand the process better:
Section 1: THE BUDGET First of all, assess your post-tax monthly income, deduct tax saving contributions. Similarly, do so for other earners in the family.
Next, provide for credit card debt and other loan payouts, as also provide for monthly household expenses. After this, set aside around five per cent for contingencies.
Add up the savings you will need to put down your contribution of 10-15 per cent as Housing Finance Companies will fund only between 85-90 per cent of the property value.
Now check if you have enough for the EMIs plus maintenance expenses. Don't forget to budget for the tax breaks you get on your loan repayment. Typically, lenders will ensure your EMI's doesn't exceed 50 per cent of your take-home pay, post-taxes and other deductions.
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Section 2: THE HOME LOAN
'u00a0Screen lenders on total financing cost and convenience.
'u00a0Get pre-approvals from short-listed lenders.
'u00a0Check out property fairs for better rates
'u00a0Check if your employer has a tie-up with a lender, corporate discounts can lop off more than 1 per cent in interest alone.
'u00a0Today, lenders are vying for customers, so play them hard against each other for the best bargain.
'u00a0Get 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.
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Step 3: THE SEARCH When you go house-hunting, consider:
'u00a0How far you'd be from place of work.
'u00a0How far the home would be from your kids' school.
'u00a0How far you'd be from reliable medical help.
'u00a0The quality of civic amenities (water, electricity, waste disposal etc).
'u00a0How accessible social amenities like markets, clubs and parks are.
'u00a0Now, the reality of life is that the ideal in the list given above may not match your budget. So, now you need to match your budget with your requirements and what's available - and make the necessary trade-offs.
'u00a0To know what's available, scour advertisements, ask friends and neighbours, and check out property fairs.
'u00a0Once you have a short-list of projects, check the past record of the builder and visit their completed projects.
