Plots for sale in Mysore Road Bangalore

The younger lot prefers investing soon in their dream home to save money they give out on rent and have a property for themselves soon. To buy a property, first and foremost, you need to plan out your monthly budget well to save money for the down payment you must pay out of your pocket. Apart from that, a home loan can be availed. Needless to say, if buying a residential property is one of the biggest achievements of your life, you also need to have strong financial discipline in place.

Here are 7 Smart Tips to Buy Your Dream Home planning financially 

1. Be Financially Disciplined

Financial discipline is essential if you want to purchase your dream home. First, you need to pay the down payment on the house from your pocket, which can be between 10% and 25% of the property’s market value. For arranging the down-payment fund, start cost-cutting, avoid wasteful spending, clear your debts, and maybe try to expand your income pool.

2. Stick to Your Budget

Categorize your expenses, determine how you’re spending your money, and then make a budget. In this modern era, you don’t have to plan manually. There are many apps out there to help you set a budget. You can compare your income to expenses and track how you spend your money.

3. Do Proper Market Research

Check out the prevailing real estate market rate of the area where you wish to buy a home. Set a budget for your flat and search for that type of home accordingly. If there is no need for a very spacious home, then you can go for a one or two-BHK home initially. a house in the outskirts costs way less than one in the city for the same square footage. Knowing these details means you’ll know exactly how much to save.

4. Plan Investment

To buy a home, saving money is just not enough; you will also have to invest in getting a higher return smartly. For example, a savings account will earn you a maximum interest of 4% p.a., while a fixed deposit (FD) account will help you get an interest rate starting from 6% p.a before tax. On the other hand, a recurring deposit (RD) account will earn you interest starting from 7%-8% p.a before tax. In contrast, some mutual fund investments can offer between 10% and 15% (or even more), depending on the fund. It is advisable to consider all the risk factors and make a wise investment to get a good return.

5. Set Aside the Money for Future EMIs

Buying a home without a home loan is next to impossible these days. As we all know home loans don’t come cheap. EMIs for every month are likely to be way more than the rent you’re paying currently. It is advisable to use an online EMI calculator to determine how much you will have to set aside each month for your home loan repayment.

6. Maintain Your Credit Score

A good credit score not only makes you eligible for a home loan but also increases your negotiating power for lower interest rates. Unfortunately, because of the long tenure of home loans, you end up paying a lot more as interest – way more than the principal amount. However, if your credit score is bad, you will have to pay even more in interest.

7. Compare Home Loans

Besides researching the type of home you wish to buy, compare home loans from different websites to narrow down your options. Interest rates start from 8%+ per annum and are usually pegged to the bank’s MCLR (Marginal Cost of Funds Lending Rate) if you choose a floating rate loan. Also, consider other aspects such as processing fees (0.25% to 1% of the loan amount), pre-closure charges (up to 5% on fixed-rate loans), and late payment fees. Considering these factors will help you determine the actual cost of borrowing.

It all boils down to this!

Buying a home at an early age is a challenging task; however, it is not impossible. Delaying your plan to buy a home in the future, considering your income will increase later, is not a good idea. As with income, your other financial commitment will also increase as time goes by. However, if you plan well and follow the above-mentioned tips, you can have the keys to your dream home sooner than you think.

In conclusion

purchasing your dream home early in life is indeed a daunting task, but it’s entirely achievable with careful financial planning and discipline. From budgeting effectively to maintaining a good credit score, every step you take brings you closer to your goal. Investing smartly and comparing home loans ensures you make the most informed decisions along the way. Remember, the key is to start planning early and stick to your financial goals.