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Five steps to buy a house, for first-time home buyers in India

Finance is one of the most fundamental requirements when it comes to purchasing a house, and most of the other factors revolve around this. As property buying is usually a once-in-a-lifetime decision, it is necessary to evaluate your funds accordingly. To get a house, Someone now has to spend their savings and also go for a home loan. The process of getting a loan has also become more straightforward, with a majority of people opting for it. Nevertheless, there are some basic principles that one can follow, to plan your investments for buying a house this year.

  • Pay off all your current debts

You can never spend your net worth if you are debt-laden. Any partial payment towards this debt will visible poorly in your credit ratings, and this may affect the home loan process. Paying off your debts ultimately will help you move ahead in the way of home buying. Except for relieving one's tension, it can help you to properly allot money for your basic needs and your big real estate purchase.

  • Invest in multiple sectors

One should learn about the various financial industries available in the market. This can assist you to spend your money correctly and utilize the returns, to fund the purchase of your house. Financial experts always emphasize on having a mix of various asset classes in one's portfolio, as this will assist you during big-ticket purchases, like property. "Before deciding to purchase a house, one needs to make sure that the present asset allocation is not skewed towards a risky asset category like equities. If that is the case, one should shift a part of those assets to less risky ones that are also liquid. Mutual funds can be an excellent avenue for such temporary or short parking of funds.

  • Track your spending

Real estate is one of the expensive investments. However, with modern customers being exposed to global standards, they refuse to settle for anything. In such a situation, each penny counts. Experts recommend that Someone's monthly budget should be based on the 50/30/20 thumb rule, where one spends 50 percent on necessities, including groceries, utilities, medical expenses, etc., 30 percent for satisfying yourself and your family, while the remaining 20 percent should be saved. This 20 percent will help you in your down payment, receiving home loans and also in case of any other crisis.

  • Standing instructions for automatic transfer of money

Start standing instructions at your bank, for transferring money from your salary account to your savings account, each month. This will help you in checking, and you will only spend how much left after savings. Going forward, when you take a home loan, you can follow the same method, so that monthly EMIs are taken care of, right at the beginning, and you avoid getting into any financial mess.

  • Maintaining a balance between rent and EMIs

Proper planning is especially important when one plans to buy a house while also living in rented accommodation. This will entail an outgo of EMI, as well as the rent for your current home. Once you get a home loan, the EMI starts instantly. This can become troublesome when you are paying it at the same time as the rent for your current place. You should keep a proper balance, between the EMI and the rent, so that once you get the settlement of the new house, you can increase the EMI price and move into your dream home.

Fund management, for purchasing a dream home:

Plan the monthly estimates using the 50/30/20 thumb rule, where you spend 50 percent on basics, 30 percent on luxury and the remaining 20 percent in savings. This will help you to hire a professional Packers and Movers Bangalore or any cities in India. Modify your asset allocation mostly from risky assets to liquid assets, so that when you zero-in on a property, you can directly proceed and not let go of an opportunity because of the lack of funds.

  • Mukesh Panda
  • Jul 11 2019