13 DECEMBER, 2021

Often people spend their lifetime arranging for finances to buy their dream home and live in rented homes until then. But, experts opine that the earlier you buy your house, the better. It can help you earn profitable returns with the benefit of capital appreciation and save you from the hassle of paying rent for the rest of your life. However, if you do not have enough savings, it could be challenging to buy your dream home. Thankfully, a home loan can help

If you have been planning to buy a house of your own, here are some tips to help you purchase one as early as possible.

  • Plan your finances

It could be challenging to finance your home with your savings, thanks to high real estate prices. Availing a home loan at a young age can help you get competitive home loan interest rates and higher loan amounts. However, you will have to gather funds to pay for down payment. You would have to pay 15-20% of the house cost as a down payment. Before you avail a home loan, ensure that you save for EMIs and postpone any other major expenditure. Plan your finances and ensure to prioritise expenses to save enough for down payment and EMIs.

  • Stick to a budget

You must buy a house that is within your budget. You must assess your expenses and income to determine your affordability and then prepare a budget. You must also consider your future plans and expenditures that you will need to manage in the coming few years. Once you have prepared the budget, make sure to stick to it. Avoid splurging and do not miss EMI payments. Cut down on your costs and expand your income pool. You will have to pay penalties if you miss EMIs, which can increase your repayment amount. Therefore, you must be financially disciplined and avoid defaults.

  • Be aware

Before you jump on buying your dream home, ensure that you are well aware of all its aspects. You must explore different properties before choosing one for yourself. You must be clear on what you want to buy. Should it be an apartment? What should be the size and location of the house? All the relevant factors should be clear in your mind as they can help you avoid delays in choosing properties. You must choose the lender that offers the best interest rates and has home loan eligibility that you can fulfil. Moreover, it would be best to know about the tax benefits too.

It could be challenging to buy your dream house at a young age. But it's not impossible. While you must manage your finances to pay the EMIs timely, you must be well informed and financially disciplined. Also, you must ensure to do adequate due diligence while buying the home to avoid any nasty shocks in future. So, visit our home loan page and apply for home loan today.

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.