ATM :: For homebuyers, 5 top moves to consider

By: CreditVidya | New Delhi | May 6, 2015 10:16 am | Financial Express


The dream of owning a house if not planned well will remain a castle built in air. To ensure your dream turns into a brick and mortar reality, you will not only require time, effort and energy, but lots of money too, either yours or the banks, ideally both, to take you through the entire process of home building or owning.

The challenge of owning a home, whether bought or built, for the first time can be very overwhelming. It might tempt you to go back to your present place of stay or just go with the first house that falls in your price range or worse, just skip the idea altogether.

Here are 5 top things that you should consider:
1. Plan your finances: Buying a house is a big financial decision. But, before doing that you should determine where you stand today financially. Ideally you should plan a year in advance in order to organise your finances. You need to start saving and cutting down on costs. Another factor you need to consider is the price range you can afford to buy, which is in turn linked to the amount of loan you will be applying for as well as the EMI you would be paying every month after purchase. So, to start with, it’s a good idea to create a separate budget assigned for this purpose.
2. Keep your debts in check: If you are already paying a part of your income towards debts, then you may want to pull your sleeve up and speedup the process. Try and find alternate streams of work to generate more income. If not, start paying a little more from your current disposable income towards the repayment. While it may not be possible to be debt free, you might want to be in control of your debts, as the banks will assess your debt to income ratio, before agreeing to sanction your loan.
3. Score well: Your Cibil score should be the number, you should be falling in love with to get the best out of the housing loan. A good Cibil score of 700 or more on your Cibil report can definitely earn you that loan with best interest rates and terms. So, make sure you are consistent with your credit card payments, and pay it on time to boost your credit score.
4. Build a fund for down payment: 10% to 15% of the cost of the house will have to be paid upfront at the time of purchasing the house. So, it is imperative that you start building towards this fund.
5. Define your dream home: Defining the kind of home you are looking for, is another key factor you need to work on. This should be in terms of type of residence, its location, amenities and its surroundings. Clarity in the above factors will get you closer to your dream home.

Owning a house for most of is associated with a sense of pride, ownership and security. Planning to buy a house is the biggest investment decision one takes in life. Therefore, it is important to remove the emotionally tinted glasses and practically assess the pros and cons before purchasing a house. Otherwise, chances are that your dream house will remain just that, a dream!

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