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You are a young professional who has started your journey of independent life. Buying a home is an aspiration that excites you and will motivate you to get a dream home for yourself. A home is much more than an asset, it is a reservoir of value which you want to be a significant part of your life.
Since getting a home for you is an important decision that you would be making in your life, you need to decide on the right time to go for it. Most of us tend to jump into the decision as lot of emotions are related to it. Here are some basic guidelines as to how to know when is the right time to buy a home for yourself.
Get hold of your emotion
Get a home is always an emotional decision, especially for us Indians as we look at it as the house where our family is expected to share moments of our lives. As soon as a young man/woman becomes independent, he/she dreams to own a home for himself/herself. However, try to keep your emotions at bay while taking the decision as it would involve lot of objective rationale and speculations.
Always keep an eye on your personal finance and income and expenditure. First step is to ascertain how much of your cost you can bear and how you plan to manage the rest. Know exactly how much you spend per month and which of those expenses are persistent no matter what. Also, calculate your present income and the growth you expect over the tenure of your loan.
Go for the loan when you know you have enough credit credentials so that your loan will not be discarded by the bank. Know your savings and make a plan realistic enough to keep a ‘rainy day fund’ aside from the amount your equated monthly interest (EMI) payable to the bank.
While deciding on the loan, be sure that you have at least 20% of down payment ready with you. It will bring down your successive cost effectively.
Do your research
Market economies are subject to frequent changes. Prices continue to drop or at least get stabilized in many areas. Keep a track of the changing interest rates and go for the home loan when rates are favourable. Take help from the real estate portals to know about the future prospects in the housing market and act accordingly.
Long term planning
House is a long term investment. Think about 10 years or more down the line. If you are buying the house for own use, i.e. to settle down, then buy it at a time when you know you are ready to make the investment for the coming years. Also, keep in mind the job mobility. If your job is transferable, then you need to rethink about any impulse to go for home immediately.