Factors To Be Considered Before Buying A Home

1. Factors To Be Considered Before Buying A Home Buying a home is one of the most important decisions we make in life. Especially if it’s a first time home –then the significance couldn’t be more. As more and more families are moving nuclear, young couples and professionals are opting to buy their own homes at a much younger age. However, before buying everyone is in a dilemma whether to buy or rent. While there are various apartments for sale in Bangalore, one must carefully consider his or her options before taking the final call. A typical 1BHK flat in Bangalore can cost anywhere upwards of ₹20 Lakhs while a 2BHK flat in Bangalore could easily cost ₹30 Lakhs and more – in this scenario as it is evident, the financial implication of buying is considerable. One must consider the following factors before taking a call on whether to buy a new home or rent a facility: Current financial strength: Does your current income and savings allow you to make a considerable investment? Financial strength implies the stability of your existing income as well as the projected income. Projected financial situation: Given the fact that a home would most likely be serviced out of a loan, does your future earning capability allow for the regular servicing of EMIs. Rent v EMI: Typically one should look for buying a home for which the EMI is more or less equal to the cost of renting a similar home. The idea is that if you’re EMI is far outweighing your ability to service it, it could be trouble. Ease of Disposability: In the unlikely event of you wanting to dispose the property, it should be attractive enough for probable suitors. The ease of disposability for a property you plan to acquire is vital part of contingency planning. Often first time buyers simply compare the monthly home loan EMI to the rent payable. They conclude that if the EMI is higher than the rent then renting a home is better but if the EMI is lower than the rent then buying is more viable. However, in real life things don’t work out as simple as that. Home buyers must consider various factors such as property tax, utilities, maintenance and other incidentals as well. On the flipside ownership of a home gives you a greater financial standing, credibility and of course it is also a sign of how higher you are on the success ladder. Each of these are intangible factors and cannot be ascertained in definite monetary terms. Therefore, the true cost of both renting and owning a property needs to be accounted in both monetary and emotional terms – after all, a home is much more than just a place to stay. Finally the decision to buy or rent a property should be taken in context to your income, lifestyle and expected expenditure. Buying a home is a long-term commitment and it is greatly advised to invest in it. However, due diligence must be followed in making this commitment lest it can lead to financial trouble.