Tips to be Financially Ready to Buy Your First Home

Almost all of us grow up with the dream of having a home of our own someday. We make a zillion plans to make this dream come true; still only 50% of us succeed. Why? The essence of buying a dream home lies in the ability to manage your finances. You must be financially fit to afford a home you have always dreamt of. Now you might be thinking that this is what you have been doing for years. Right! But here, we are talking about a smart financial planning.

Tips to be Financially Ready to Buy Your First Home

Given below is a simple guide to being financially-fit:

Know what you can afford- This might sound like the same old advice but it is indeed the most important advice you can ever seek. Being clear on your own affordability needs does not let you wander around in your dream land. Before you enter the property market, you must be realistic about your approach. Limit your choices to what you can actually afford within your budget. If you are not able to decide, visit a few open houses, do some online research. You will get to know what type of property will be available in your budget. Do smart research and then decide on your budget.

Know how much you spend- There is no doubt that if you start seeking home loans in the market, a number of banks will approach you offering deals better than the previous one. But you have to choose the one that is right for you. For this, you must review your finances and expenses. No one can know your spending habits like you do. So plan your home purchase accordingly. You should also keep in mind the other costs related to a property purchase such as stamp duty, parking charges, etc.

Know your savings- Though you can easily get a home loan nowadays, it is not good to rely on the lenders and be financially independent. Open up a savings account and start depositing money now. Because when the right time comes you will not want to stop due to lack of funds. Start cutting down your expenses wherever you can. Get a shared apartment to save money.

Know the importance of a good credit score- There will not be any hurdle in getting a home loan if you maintain a good credit score. Pay all your debts on time, do not pile up those credit card dues, pay the interests on loans on the right time. All this will help you in the long run when you apply for home loan. It will also give you a fair idea about your financial standing.

In some countries, the government helps first time homebuyers by launching a few financial plans. Here in India, the government has come up with affordable housing options. You can go for such homes for initial investment. Make good use of your time to research about the good homes available within your budget. Make a smart choice, be a smart buyer!

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