Buying a home is every individual’s dream. However, following the process involved in turning this dream into a reality takes a lot of guts and a viable financial plan. To be very honest, the actual preparations for buying a home commences way before the date of the transaction. Furthermore, for people taking the plunge for the first time, things are way harder than others. They are highly exposed to possibilities of facing financial issues in succeeding years due to lack of proper budget. Hence, the vitality of having a monetary strategy become more imperative for new individuals buying a home.

If you get it, here are a few pointers I would recommend home buyers to follow:


1. Clarity on requirement

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Not just Delhi, Gurugram, or Mumbai; buying a home has become equally expensive in almost every Indian city. If you are looking for even the least, a 2BHK flat in any Indian city, you must have a budget of Rs 20 – Rs 40 lakh. In that context, buying a home without an effective monetary strategy can put a deep, irreparable hole in your pocket. Therefore, hold on to your desires, take some time and discuss your decision with your elders and your partner.

Plan a budget that can cover all your life-supporting needs and comfortably incorporate the EMI of your home loan. Concurrently, achieve some clarity on your requirements like the size of the house, proximity from public facilities, locality and security. Use the recently introduced RERA list to find legitimate real-estate companies to minimize the possibilities of getting duped.


2. Plan a payment strategy

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When you have the budget in place, the next big decision is to decide how to pay the price. Going according to the golden rule: never pay in cash, not totally. There are two reasons for that: (1) you will end up exhausting your entire budget, (2) you will attract the attention and get on the radar of Income tax department. Always pay according to a ratio: 30%-40% in cash, using your savings and the rest using a housing loan.

Moving further, do some research and take a suitable housing loan from a reputed financial institution. Try to pay one-fourth or half of the total amount in cash, and pay the rest using a home loan. This will also make you eligible to reclaim income tax every year, and build your CIBIL score at the same time.


3. Plan a loan repayment strategy

“Dig a well before you get thirsty” whoever said this quote definitely foresaw the existence of home loans in future. Either you save in small fractions from the very beginning of your employment days to pay for your dream house or plan a repayment to pay for the housing loan EMI. Taking a home loan is undoubtedly a sensible move, but what’s smarter is having a loan repayment strategy in place. Having a repayment strategy automates your finances and allows you to sleep peacefully in your own home, the one that you just bought.

4. Check your eligibility

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We all are aware of the term financial loan and know the significance of eligibility in context of financial loans. Therefore, check the important factors that improve the chances of loan approval: CIBIL score, debt history, debt-to-income ratio, and the documentation. If the situation calls for it, wait and improve your creditworthiness before applying to avoid rejection.

Bottom line: Buying a home is a big decision, arrange a supportive financial arrangement before the decision becomes a burden and breaks your spine.

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