Planning well and in advance is the key to success especially when it comes to buying a house. Read on to know what are the basics
Buying a house is a huge financial commitment and a dream for many. For many homeowners, a large chunk of their monthly income goes towards home loan repayments. Hence, planning various aspects of the house purchase well in advance can make the process of owing a house a pleasant experience. Planning well ahead helps the prospective home owner beat most of the uncertainties.
WHAT IS AN IDEAL HOME?
Gauge your requirement. Depending on your family size, usage and lifestyle your requirement could vary. Try predicting your space needs for the future. A two bedroom house may be sufficient for you today. However, as your family grows so will your space needs. Your children may want separate rooms and your parents may need a more comfortable bedroom. Factor in future needs for additional space before you buy a house.
Location holds the key to a good investment in property. If you invest in a good location, there is a huge probability of reaping rich rewards. One needs tremendous foresight on the economic topography and demography of the region. Developing localities with well established transportation and communication networks hold tremendous potential for increase in value. Proximity to railway station, metro rail, express toll roads, airport and bus stops is preferred by families where members commute to work or college.
HOW MUCH SHOULD YOU BORROW?
Borrow only so much you can comfortably afford to repay. Borrowing heavily can land you in financial crisis. If you have other savings and assets, consider using the money to make payments towards purchase of the house. A step-up loan is a comfortable repayment option for young borrowers. This helps borrowers who are in the initial years of their careers borrow more than what they are eligible for. Their EMI dues increase as the years roll by. Margin money
Loan seekers must make arrangements for margin money or down payment. This could be 10 to 15 percent of the loan amount you seek. You can take a personal loan to raise this money. However, interest on the borrowed money could be as high as 15 to 20 percent in case of a personal loan.
WHAT IS THE IDEAL TENURE?
Borrowers who intend to pay off their debts as soon as possible choose a short tenure loan. When the tenure of the loan is short, the EMI outflow month after month is huge. Longer tenures are opted for generally to enhance the loan eligibility of the borrower. Longer the tenure of the loan, greater is the cost of borrowing. However, a person close to his retirement years will not be eligible for a long tenure loan, beyond his working years.
Borrowers, who cannot make huge EMI repayments, can take a middle path. Consider a tenure of 8-10 years where you can make comfortable repayments and get rid of the debt.
Courtesy by: ET REALTY Dtd: July 2, 2010
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