Buying a home is easily one of the first things every adult has on top of their checklist. It is undoubtedly a special moment and feeling to buy a house with your own hard-earned money. Gone are the days when buying a home was considered an essential thing only after you had gotten married and settled down.
In fact, millennials, as well as gen-z, now prefer to invest in their home as soon as possible to save the money they would otherwise have to pay in rent. While it is for sure an exciting moment to have your own home, there are several things you must keep in mind before buying it.
5 Tips to Buy Your Dream Home
1. Be Financially Disciplined
We cannot stress this enough. Being financially disciplined is extremely important if you want to buy your dream home. When purchasing a home, you must first pay the down payment. This can be anywhere from 10% to 25% of the property’s market value. And this is only the tip of the iceberg.
You will have to be financially disciplined if you make regular EMI payments. For this, you need to avoid wasteful spending, clear your debts, and even look to expand your income pool.
2. Prepare a Budget and Stick to It
Houses are available at all prices. Therefore, it is essential that you first prepare a budget and then ensure that you strictly adhere to it. To prepare for it, you need to ask yourself questions such as how much money you are willing to shell out. How much loan can you afford to take? And so on.
You would also have to prepare not to get too attached to any property. You may find a home that ticks all your boxes but is out of your budget. Walk away! You will find other ones.
3. Do Thorough Market Research
Figure out what type of apartment you need - whether you need a duplex, two BHKs or one BHK, which amenities you are looking for, etc. Consider the area you are looking for as well. All these factors would affect the price, and knowing them would let you know exactly how much you can save.
Additionally, market research will give you an in-depth understanding of the real estate market, including the current state of the market, market trends, and average home prices. It would also help you have a better understanding of what the homes in your desired area are worth. This will help you avoid overpaying for a property and ensure that you are getting a fair deal.
4. Maintain Your Credit Score
Maintaining a good credit score is recommended as that has multiple benefits. Having a credit score above 750 would make you eligible for a home loan and give you a higher negotiating power for lower interest rates. This is a crucial factor as the long tenure of a home loan would mean you are paying way more as interest.
With a good credit score, you may be eligible for larger loan amounts. This can be especially important if you are looking to buy a more expensive home or want to put less money down.
5. Plan the Investments
When buying a home, saving money is not enough. You would also have to invest it as there are considerably more returns. For example, the interest rate for a savings account is 4%. Similarly, a Recurring Deposit account earns you an interest of 7% to 8% max. In contrast, some mutual fund investments can offer interest at a rate of 10% to 15% or even more.
Buying your dream home can undoubtedly be a challenging task. However, by keeping essential points in mind like the ones mentioned above, the process becomes easier. So, do your research, plan well, and you will soon be able to buy your dream home.
