Well everyone wants to buy their own house. Every human who starts studying and completes their college degrees vouch for the highest paying job only for one thing that is home, sweet home, a permanent halt, halt for their family members to stay for years.
The house seems to be the biggest financial decision of a person either working or not.
People from all parts of society want to buy themselves houses irrespective of their financial background. Rich people can buy several houses as they have a lot of money in their pockets.
Middle-class people can afford only one home in their lifetime, and they want to put in their best effort to design each brick of their small heaven.
many things need to be considered, reconsidered and checked upon, consulted by experienced people in this niche to land on the most suitable deck for your clan.
Now in this article, we would be telling you basic questions you need to check up on your finances to land into one of the biggest financial decisions which will create a significant impact on your income and life too.
In India or other countries, people mostly dream of buying a house from their teenage and can accomplish it in their late 30s. In most countries, middle-class people comprise 60 to 70%, and they have to go to large lengths to accommodate between saving and being ready for that big-ticket purchase.
This big-ticket purchase is a long-term financial commitment that they have to commit, to buying a house which itself entails a lot of financial, mental, physical, and emotional risk which has to be undergone to finally land your dream home.
What are these financial commitments?
We will be throwing light upon these financial commitments one by one.
so just hold on there will be many financial terms that you will be coming close to. we would introduce you to all this in a short while.
Do you have a stable income?
people usually want to buy a house when they want to settle with their loved ones. for accomplishing that feat.
ask yourself a basic question
what is the actual cash flow in my bank?
for example in the Indian scenario mostly female counterparts try to take a back seat in their career to give a good upbringing to their children most middle-class people are engineers who are not paid up as per their working hours.
you should give a keen look at these aspects of your financial income or financial condition to start saving up for your house .you should see whether both of you are earning well or one person is earning well or both of you are not earning well.
You should make a chart out of it to decide on a budget for the house, and the level of EMI obligation which you or both of you together can pay up.
The chart should comprise expanded income, higher expenses, immediate final requirements, and many more things.
what is expanded income?
expanded income is the amount of money you can draw through various financial investments or short time investments you did to save up for your future. the amount of money you are bringing into the house, the amount of money you are getting by liquidating your investments and structuring your previous loans.
All these things need to be taken care of to decide upon the fact “do you have a stable income to back up all the expenses of your home?”
what are higher expenses?
Higher expenses are all types of spending you do daily which do not actually feel like a lot to spend but when summed up together and piled up will remove a large chunk out of your income monthly or annually.
example, eating out on weekends, going to movies, going to different functional parks, prior loans you have taken for your car, furniture, laptop, student loans, for many other things.
these expenses which will be also accompanied by the home loan are called higher expenses. what is an immediate financial requirement?
the immediate financial requirement is a lump sum down payment which you have to do to start paying EMI from next month or any other time you have decided for the loan to be repaid.
this down payment is 20% of the price which you are willing for the house to be paid. Just ask yourself by seeing this financial table
will you be able to spend that lump sum down payment amount?
will you be able to fuel up the other expenses of your home for example your day-to-day expenses, small earnings, and small spending?
will you be able to float in this ever-changing recession-like situation?
Will you be able to manage the debt?
Decide a budget for your spending and saving habits.
will you be able to commit to this long-term financial commitment that buying a house in tails with itself? will you be able to manage the debt along with the expenses of the house?
barely ask yourself .or
you are not able to decide to consult a financial counselor or a chartered accountant or anybody related to the finances or financial field.
you need to have a clear Ground Zero report over your finances such that you don’t fall short of the money at the time of loan repayment or full payment of the house or while you are handling the house to yourself.
Will you be able to back up your financial payments?
The person in charge who is shouldering all the financial commitments has to be a double-edged sword.
they have to make arrangements from saving and investments that he has made over the years to get the amount.
you need to think that you are a human first you have to be mentally, emotionally, and physically fit to endure the financial suction that money would create at your income plus sharpen up your saving skills.
you have to various stock Market measures like liquidating your investments and investing like a pro to increase the cash flow in your pocket.
don’t just save.
invest because investing will only increase your financial stability.
Do you have money to pay for the emergency fund?
Talking about our house, the actual person who is working day and night to pay up his loans via EMI or any other way you have to take care of.
are you there to be afloat with your emotional, mental, and physical well-being, to endure the financial suction created?
just keep enough bank balance to pay up for hospital fees in case of unwanted, unforeseen circumstances. bad health conditions which are unavoidable need to be taken care of.
do you have that much amount that after paying the EMI, you have money in your bank account to pay the hospital fees?
just take a deep and clear look because if you don’t have that just rethink your buying terns once again.
your hospital fees are equally important and this importance will land you in a mess. both home and home dwellers’ health is important so just keep a backup amount in your treasury.
Do you have enough to add to your home decor?
We as humans cannot live in a house that is a four-walled structure. we need paints, ceilings, types of furniture, bed, bed covers, curtains, sitting space, veranda decor, wall hangings false ceilings, and many more.
house building material, decorations, etc. All this will only add up to your expenses and can be considered extra expenses.
They might take a small chunk one at a time but when summed up, will take a big chunk out of your daily income.
designing the house, parking space all this need to be taken into consideration before landing on some conclusion.
just test the actual waters!!
consult an interior designer who is specialized in this field to get the most budget-friendly design.
well, this does not seem to be a part of the financial stability to buy a house but this is an important part that will eat away at your income if you don’t plan it out.
are you ready for sacrifices?
are you ready to make the sacrifices, to stretch yourself to know each and everything about your dream heaven even before starting
Are you ready to search for good loan terms and s, get a prior loan approval so that you hit on the iron when it is red, and you don’t fall short during the full payment of your house
Are you ready to structure your loan-paying terms to ease your financial burden? ready to be more financially independent and financially literate?
Are you ready to lend your thinking to these small but important aspects of house building? just have a clear report on all these things.
Are you ready to sharpen up your saving skills arranging to save and leaving a frugal life for some years to end up in your dream deck where your clan resides in peace?
Just ponder over this fact to answer our ultimate question
“Are you financially ready to buy a house?”