When you make big financial decisions in life by yourself. Does it leave you doubtful and wished you had a financial advisor? Well, buying a house for you and your loved ones, is a huge financial commitment. For some, it is by far the largest expense they will ever have in their lives, and it is always wise to Plan your budget and assess your revenue, before taking this step. With the right planning you can breeze through the monthly payments and lead the life you want. Read on for sound financial advice on planning your personal budget before buying your dream apartment in Chennai.
Assess your combined income after tax:
Your family might have more than one earning member. Take account of the combined income of all earning members, keeping regular income as the priority. Deduct the tax owed to the government from it. Figure out how much you are left with for your expenses each month, and on an annual basis.
Prepare a monthly expense sheet:
Take down a paper or better prepare an excel sheet that outlines all your regular and recurring expenses. This ranges from your monthly essentials, insurance payments, maintenance, rent, loan payments, phone bills, transport bills etc. Deduct this from the monthly income post tax, calculated in the previous step. This will give you a fair idea of how much disposable income you can afford to invest on a home.
Check where you can cut back:
Sometimes the left over amount may not be enough to cover the payments on your potential home loan. This is where you need to review your monthly expense sheet with a hawk’s eye and see where you can cut back. Noting down these expenses makes us more conscious towards how much we are spending on what. Probably you could cut down on ordering food or stop some magazine subscriptions. Once you start scrutinising your expenses, you will always find one or more areas of improvement.
Try to pay off existing debt:
Getting a home loan has become easy as the government and banks have made the process easier to promote investment in real estate. However you may find it hard to meet the monthly payments, if you are already in the process of closing another loan. If you pay them off first, you are free to manage your mortgage payments. This also improves your credit score, letting the bank approve your home loan without delay.
Start saving to make your deposit:
Most developers require you to make an initial deposit on apartments in Chennai. This is even before your home loan gets approved. The deposit amount can be a fixed lump sum amount decided by the developer, but most times it is 15- 20% of the total sale value. You need to put up this money upfront to book the home in your name. The commitment that you show towards saving this deposit amount and paying it off, helps approve your home loan easily.
Choose within your budget range:
Real estate developers these days are offering quite a lot of amenities and comforts at reasonable rates. So it only requires a fair bit of research to identify the projects that fit within your budget. It is wise to settle within the budget without stretching it too much, as this is a long term commitment and you should be able to meet the payments every month for that period.
Get pre-approved for the loan:
If you are confident about meeting the expenses, you can approach a lender or bank and get yourself pre-approved for the home loan. When you approach a developer, they recognise you as a serious buyer if you have been pre-approved. This way they know they can rely on you to get the monthly payments on time and deliver your home on schedule without any delays.
Check the competition:
Before you settle on any particular projects, check out the other properties around it. Find out if you are getting your money’s worth of value. In a city like Chennai, property values are dependent on locality. Find out what rate the other competitors in the same location are offering and you can use it as a bargaining chip to negotiate a fair price.
We have covered all the basic steps to take when planning to buy a home. Apart from finances, you need to look for quality in aesthetics and technical specifications. At Lifestyle Housing, we have flats in Porur, and apartments in TNagar. Our Sales and site personnel are well versed in the technical and financial aspects of a home, and can give you solid recommendations on the loan processing. We are also partnered with several national banks that you can avail the home loan from. Check in with our experts at lifestyle housing.