Your home purchase goes to be one among the most important financial commitments in life. Hence, knowing your financial standing and preparing for the expenditures involved would substitute good stead.
Managing the down payment:
If you're getting to buy a home priced at Rs 20 lacs, you've got to rearrange for a minimum of 20 percent of the value of the property as deposit. You ought to either but a minimum of 4-5 years before buying a home or delve into your existing assets. As an example, you'll liquidate some investments including your fixed deposits, ULIPs, mutual funds, and life assurance policies, among others.
Try and avoid withdrawing from your retirement funds like PPF and EPF. However, you'll consider taking a loan against your PPF or life assurance policy. Besides, you'll arrange for a monetary gift from your parents or relatives for the deposit. It’s recommended that you simply avoid taking a private loan to assist the deposit because it comes with an important interest burden.
Availing the proper home loan:
As against the common notion, there are various sorts of home loans available within the market. The sort of home equity credit you decide for should depend upon your financial standing but not limited to your incomes and expenditures.
It is best to possess an in-depth know-how of the lending policies, facts, terms and conditions clarified well beforehand before finalizing a home equity credit affect any lender. Thus, the selection of home equity credit provider (bank or other financial institutions) also becomes an important one. Moreover, you would like to decide if you want a hard and fast or floating rate of interest.
Take note of the extra expenses:
While planning and managing your finances, don't forget the overheads that you simply may encounter within the process of owning a property. These may involve stamp tax and registration charges, transportation cost, brokerage fees, and furnishing of the new property, among others. It’s recommended that you simply calculate these before arriving at the entire cost of ownership.
Have a contingency fund:
Don’t exhaust all of your funds for purchasing a home. You want to have a contingency fund just in case of any unprecedented event. Under any circumstances, you want to a minimum of be ready to pay off your monthly installments alongside taking care of your lifestyle expenses.
Safeguard your home equity credit:
Getting your home loan insured may be a smart move. Just in case of an unforeseen incident or calamity, this is able to ensure financial protection. Under such circumstances, the insurance would look out of the outstanding payments.
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