Home Buying: Chalk Out a Budget Carefully

Aug 19
20:38

2014

Janvi Ahuja

Janvi Ahuja

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Buying your first home while dealing with thee financial limitations and apprehensions can be a tightrope walk. However, it is better to plan ahead and see that you don't land yourself in a financial puddle. The follow-up of the article discusses how you can chalk out a budget for this purchase that is both practical and generous enough to accommodate your fancies and limitations.

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Whether or not you are planning to settle down on the city you are currently in,Home Buying: Chalk Out a Budget Carefully Articles the best thing you could do to have a stable and financially secure life ahead is to buy a home at the soonest. Residential property is an asset, a dream and an emotional cushion; and for most it is so much more than a structure of brick and mortar.
However, ironically, this is the last purchase you would want to make dominated by the right side of your brain. Financially, emotionally and requirement wise: the home should be perfectly viable for you- and choosing it from a myriad of options require some practical brain racking. In this excitement and anxiety, people tend to make a decision in haste that may not be feasible in the long run. Most frequently, you can find people who have made deadly financial mistakes that backfired. So, to avoid similar errors, you should ask yourself the right questions.
Firstly, you need to zero down on the essentials and have a well thought out picture in your mind. Ask yourself if you are financially stable enough. If the current employment opportunity were to go bizarre, will you be able to keep your feet steady. Basis this, you can decide whether now is the right time or you need to do work on your savings before you make a move.
Once you are done with it, move forward to pin your needs modestly and realistically. A pool is great but you can do without it, but small garden area is good for the aesthetics and will keep the place green and healthy- and things like these should be decided. An important tip here could be, instead of starting from nuances such as a master bedroom or a French window, think of the broader aspects first. Foremost, decide the kind of house you want; chose amid studios, flats, bungalows, floors etc. keeping in mind your typical use and the size of your family. The amount you are willing to spend obviously is the ruling factor here.
Next in line is deciding your budget. Chalking out a feasible realistic budget is no joke but it also doesn't require accountancy principles. Remember to be rational enough to foresee the future expenditures and ambitious enough to push a little and buy the best deal you can at the moment, but with the inflation in view, which may soon be out of your reach.
The best way to approach your budget is to check your credit score. Ask a bank official to come and do loan review with you. The best person to know your repayment capacity is someone who will be betting their money on it. Now calculate the EMI's and think. Discuss with your family and see where your earning and expenditures will be in the course of the mortgage.
The simplest way to approach this is by creating a virtual financial abyss for you. Trim down the maximum grantable debt amount by 25 - 30% to know the upper limit of your budget. However, calculate the EMI on the whole thing. Now imagine your monthly budget with this extra expense and say a medical emergency. As long as you are able to pay all your bills and premiums, you are good to go.
Basically, you don't have to be a paranoid and scrap the decision due to apprehensions. But, you should expect the unexpected. This is a delicate balance to strike, but here lies the key to a happy and prosperous life.

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