Dream to possibility
There comes a time in everyone’s life when the prospect of owning a house goes from being a distant dream to a distinct possibility. The allure of ownership is understandably strong; it allows you to dig your financial roots deep and have a place you can call home.
Unlike rented accommodation, one’s own home can bear the mark of your individual spirit, right from the interior decoration to the woodwork to the choice of architecture and design, if you are building an independent house. Ultimately, it feels like checking off an item on the list of things a person must do to ensure they well and truly have succeeded in life. Nevertheless, buying a house is a major decision that changes one’s life completely. The question remains, when do you know if you are ready to take the proverbial leap?
Be prepared for the long innings
A house is a substantial financial investment and one that you will be paying off for more than a decade. A simple misstep or wrong investment has the potential to compound and hang over your head, like a dark cloud, for years to come. Owning a house is replete with responsibilities, potential pitfalls, and requires that you indulge in some careful deliberation about your lifestyle choices and financial situation before going ahead with the decision to buy.
The first thing you need when you are buying a new house is an understanding of the fiscal responsibilities of owning one. You will have to budget carefully hereafter, make sure you never miss an EMI on your housing loan; familiarizing yourself with online budgeting tools like My Money can be extremely helpful in this regard. Another major area one should focus on is ensuring you have enough money to make a down payment. There are many different real estate companies, all of whom take different percentages of the buying price as down payment, but the average across the market is somewhere in the range of 25%. Arranging for this amount could be tricky, you might have to break open any fixed deposits you may have at the bank or liquidate some other assets or even dip into your Provident Fund account. Once the down payment is ready, you are ready to take possession of your new home!
Before you even consider buying a house, you must be willing to get set for a long innings in that location. Since most new house-owners are also new parents, finding good schools near the house is both a necessity and a good investment decision. Projects near good schools are usually a good bet for the simple reason that the value of these houses is only going to increase with time and they have the potential to remain immune to other extraneous factors that can otherwise negatively affect house prices. ICICI Home Search is a very effective online tool that can help you find the perfect project or plot for your own independent house.
Have a sparkling clean credit history
Buying a house requires a lot of thought and even more preparation. The nature of the housing loan you receive from the bank is critical to the entire process and your credit history decides what kind of loan you get. Ensure that your credit history for the previous six months to a year is spotless; a single blemish can end up increasing the rate of interest on the loan which, through compounding interest, could translate to lakhs of rupees over time. Ensure you have a good CIBIL score to make sure that the rate of interest on the loan is low and that you will be eligible to take out a loan in the first place.
Don’t shoot for the moon
Another critical financial aspect involves buying a house you can afford. Sometimes people shoot for the moon and end up falling short by trying to buy a house that is far beyond their financial means. The EMI payments of this kind of house can end up leaving you financially crippled. It is crucial for you to ensure that the house you are buying is within your budget. Make sure your EMIs do not make up more than 25% of your total income. Remember, this does not have to be your final house; you can always sell it after 8-9 years for a profit and buy a better one. You can always apply for a Home Loan easily, quickly, and safely at home, using the with Instant approval facility online from ICICI Bank.
Buying a house is a mix of fiscal prudence and the satiating the human need for shelter. The real estate market can see high appreciation of your home in the coming years and with so many interesting projects to choose from, the quality of homes available to the average Indian is improving rapidly. Buying a house is a very important decision and you should give it a lot of thought before going ahead with it. Once you have the house decided, are sure the EMIs fall within your budget, have a good CIBIL score, and have your ICICI Home Loan approved, your final step is to ensure you enjoy your new home.