Financial Planning Guide - 20 to 35 Years
Published On: 06-Jul-2017

Learn how to plan and fulfil your financial goals efficiently.

Buying Your Home

Identify your needs
Determine your housing needs like space, infrastructure and amenities. While choosing a house consider factors like the size of your family, location of the house and its proximity to your workplace, schools, parks, shopping centres, and medical facilities. This will help you narrow down your choices.

Make a budget
Take into consideration five main costs — down payment, home loan repayments, closing costs like registration and stamp duty, property taxes and insurance, and maintenance and operating expenses – while making a budget for your house.

Manage your finances
If you are buying a home loan, your loan amount will depend on how much you can borrow and how much you can pay as down payment. It is important to save money by investing in RDs, balanced and debt funds for down payment 2-3 years beforehand. If you haven’t, you can tap your assets or liquidate investments with lower returns.

Avoid exhausting your funds
It is advisable to not dip into certain funds like – investments with high returns, provident fund, insurance policies, and emergency funds – for your home buying expenses. Also, make sure that you don’t vacuum-clean all your liquid funds from bank savings and fixed deposits.

Be prudent
Borrow not more than 45% of your net take-home pay, if you don’t have other loans. Apply for a loan jointly to maximise tax-breaks. Also, choose a home loan, its interest rate and tenure that suit your needs. Opt for a lender charging zero or the lowest prepayment penalty to reduce cost.

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