Everyone dreams of having the perfect ‘home sweet home’, but in the end, end up waiting. You could lose the opportunity to buy your dream home if you are waiting for property prices to come down or better days to come to buy that home. “Buyer paralysis” – or, as it is popularly known these days, the ‘wait-and-watch’ syndrome – is one the main reasons today why aspiring homeowners do not make their move. There are various reasons why people prefer to sit on the fence rather than in their dream home,” said Arvind Jain, managing director of Pride Group.
There could be several reasons why people wait for getting their homes. It could vary from person to person regarding expectations, and objectives. But once you get that home, there is a possibility of a reduction of your financial woes. Here are some of the tips which can be followed to get your dream home sooner.
Being financially disciplined: This is the most important factor to be considered. The down payment amount goes from their own pockets, and if they are empty, the dreams will be shattered. A fund should be created especially to pay your down-payment. This could be done by expanding the income portfolio, cutting on debts and extraordinary expenses. The down-payment value can range from anywhere between 10-25% of the property value, and accordingly, the fund should be set up.
Budgeting: Consider this moment of buying your dream home a crisis, and create a budget. Categorize your expenses into useful and non-useful. Follow some rules and try sticking to that budget. There are many ways through which one can improve their budgeting skills. Check out EarlySalary’s blog on tips for adjusting your budget when facing a crisis to help you with your budgeting needs.
Knowing your dream home: Find the exact details about your dream home. Does it have the required bedrooms? Does it have the additional facilities you wish? Is the location of the place suitable? Asking these questions and finding their answers would help in making your decisions very clear about your dream home. This will also help in determining the cost of your house. And the cost should be quite in line with your financial goals; otherwise, one might be troubled with paying EMIs later.
Save and invest: Saving is the primary objective while planning to get something. But just keeping money aside won’t help you reach your goals. It should also be invested. Depending on the type of savings deposit accounts, one may earn from 2-10% of interest on their amount. But on the other hand, investment in other modes like mutual funds can give you 10-15% of interest. Although the risk factor increases, the higher the risk, the higher the gains.
Future EMIs amount: If the amount for future EMIs can be set aside before-hand, it completely eases your shoulders of the financial burden. An EMI calculator will help in determining the amount to be paid at regular intervals. This could be done by channelizing your savings and investments. This will give you an idea of paying your bills soon.
Preparing for other expenses: Expenses like stamp duty, registration cost, title deed changes’ memorandum, water, and electricity connection, furnishing, etc. would naturally occur when you get your dream home. Given the several costs associated, the aggregate amount is not going to below. Although they are difficult to accurately estimate, a certain portion should also be set to prepare for these incoming expenses.
Availing tax benefits: Upto Rs 2 lakh can be claimed as a tax deduction on the interest paid on home loans under Section 24 of the Income Tax Act. And under section 80C, a deduction can be availed up to Rs 1.5 lakh on the principal amount repaid.